Greed will shrink the Gap

ARTICLE: Euro displaces dollar in bond markets, By David Oakley and Gillian Tett, Financial Times.com, January 14 2007

An interesting development that reflects the EU's aging (demographics) as much as its rise (growing liquidity enabled by single currency and greater reliance on bonds versus banks.

Scary to some (U.S. dominance challenged), but it signals a more efficient and agile global financial market (euros as alternative to dollar as circumstances demand).

As Asia's needs for more efficient financial markets grows (that great infrastructural build-out alone), watch the logic emerge for an Asian-wide single currency (built around pillars SK, Japan and China/India) that gives that part of the world the same options the EU is discovering, if only for the same social dynamic rapidly emerging there in due time (aging demographics means governments want to float more debt).

For now, rising Asia is useful to the aging West, because they'll buy our debts and assets as our Boomers retire in droves, cashing out of markets (for every seller there needs to be a buyer).

But take the next step, noting--for example--China's rapid aging (no demographic sweet spot lasts forever--notes the increasingly balding, middle-age-spreading Barnett) and ask yourself this question, "Who buys out the Chinese?"

That, my friends, is why the Gap will be shrunk.

Greed, for lack of a better word, is good.

It's also the most powerful social force in human history, dwarfing religious fervor by a huge margin.

Thanks to Terry Collier for sending this in.

Comments

[James Miller]

The point is, ladies and gentleman, that 'greed' -- for lack of a better word -- is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind. - Gordon Gekko

[Bill C.]

Would this mean that the logic of "too much money to be made" can only be overcome by circumstances/scenerios that force the logic of "too much money to to be lost?" Thanks.

[Thomas Barnett]

I like that notion a lot, Bill.

Very clever.

[Bob]

Growing liquidity does not help us, it only increases inflation which in turn robs all of us of our wealth.