Groundhog Day

Each morning I rise and shine thinking, hoping, and wishing that the world be better place than the one I left behind the night before. Gosh knows I try to be a better in what ways I can. But why oh why do nation states in general (and to get to the point for this is an economics-related blog of sorts) and the various finance ministries & central banks in particular have such difficulty making it "a better place" and doing the right things for world as a whole?

I am not here to bash "free trade", the benefits of trade, or the imperative of each minister or chief banker to regard the interests of the polity from whence he came above the interests of the world in general. But each day, we seem to diverge further from, rather than converge towards, any medium-term sustainable global equilibrium. And each morning as I scan the headlines and review the figures in detail, I am both both saddened and worried anew. Yes cliched as it is, like Bill Murray in "Groundhog Day".

Just once might I get up and hear: "The head of the BoJ admitted that Japanese interest rates are too low (and have been for too long) and thus effective immediately will be normalizing rates. "He said further that such normalisation will occur "at once", and there will be quote "No pussy-footing around". When questioned about the impact of the move upon the stability of financial markets, he said: "Speculators who have borrowed YEN at near zero to finance investment activities in other parts of the world when economic activity and inflation are so obviously very buoyant must be smoking crack or be severely mentally challenged if they didn't factor in the risk of eventual normalisation of YEN rates into their speculative equations. From Japan's point of view, they deserve whatever financial fate befalls them, not to mention that the Darwinian shakeout will make the world financial markets more efficient in the future.

Or how about: "PBoC Chief Zhou today announced the full scale float of the RMB, effective immediately. In teh same breath, he warned speculators that Chinese Banks have lots of bad debt, Chinese rates while low, are not expected to rise anytime soon, and that inflation is actually much higher than officially admitted, but that the float of the RMB will help the market enforce some much needed discipline..."

And then of course, we would all like to hear: "US lawmakers, feeling the deficit is really rather too large, said today they believe the USA needs to raise Federal revenues, and thus taxes, at least until revenue and expenditure correlate more closely. Speaking for the unanimous bi-partisan coalition, Sen Chaffee said they'll be effecting it by raising marginal inome tax rates by 10% on the dollar in the highest brackets as well as implementing a windfall resource tax, and a hefty nationwide Carbon Tax to both raise revenue and promote efficiency).

One day of course, I would be profoundly gladdened to hear "The entire Bush administration has resigned effective immediately". "New elections will be called for next week..."

Or, in keeping with the main topic of this board, Japanese equities, I would see a better world if: "Masayoshi Son, alledged charismatic and enigmatic founder of the Softbank internet empire was led away by officials from the Tokyo Prosecutors office Financial Crimes Squad as they investigate wrong-doings within the Softbank group of companies. Reporters were told Mr Son admitted to the various counts of fraud and was deeply deeply apologetic to those who as a result of his notoriety and schemes came to believe that wealth could be created in ways other than through the alignment of great prescience and good hard honest work, and of course time...".

I can dream, can't I?