The World is Not Flat–But Connected in Real-Time

Posted by Dr. James Canton on August 23, 2007 under Uncategorized | Be the First to Comment

The Fed must lower rates and continue to inject funds into the global marketplace, or face the consequences of more defaults of their customers and ultimately consumers. Consumer buying accounts for 75% of GDP. So you either have confidence or not, if not you do not buy, that is not good. Liquidity infusing is part of the drill. Other central banks must follow to stop the slide in their geographic areas. All markets are connected now–capital, equity and retail, to name a few. The world is not flat, it is connected, and the next generation of always-on pervasive connectivity, Web 2.0-Internet 2, will create even more dynamic real-time connected markets–all markets.

Capitalism is an economic game that likes to find ways to create wealth and manage risk. But, as we all witnessed in 2000, the tech bubble was the same trend outcome. Values were exaggerated and the self-healing marketplace–capitalism’s remote control–self-corrected the market. Same deal here. This is the best of honest economics at work. Not just supply and demand, but value and rise equilibrium. By the way, we have been here before the tech bubble.

Long Term Credit and Capital, the pre-hedge fund private equity company that almost brought down the US capital markets had to be saved by the large banks and Fed, when a similar scenario as the sub-prime debacle played out badly. We have also seen numerous commodities traders bet wrong and deep six their companies.