Alexonomic's Outlook for 2013: South America

Yes, the Brazilians are still the centerpiece of South American economic growth, yet there are competitors arising. While Venezuala faces a period of uncertainty with the potential replacement of Hugo Chavez, Argentina offers a renewed challenge to the Falklands under Cristina Fernández de Kirchner.

Alexonomic's Outlook for 2013: Europe

Europe reminds many historians of conditions during the 1930s. Economically depressed countries are embracing extremist political parties with racial divide, riots, and anger as the symptoms. Currently, most of the population is aware of the European debt crisis. Although a serious as the economic crisis is, the side effects of lower economic output can be more serious.

Americans and their Guns

To stray from the Predictions of 2013 series, I did an infographic of the gun control debate raging in the US, along with some statistics. The objectives of Obama gun control rules come plainly from the White House publication on the topic. As one can see, the proposed regulations are quite practical.

Alexonomics' Outlook for 2013: Africa

Egypt has often been the focus of news in Africa as of late. The removal of Mubarak and election of Mohammed Morsi has proven to be an interesting turn of events, but the excitement is far from over. Morsi symbolically removed ties from the Muslim Brotherhood, but that move hardly removes the influence the party has on the President.

A guide to Environmental Economics

Often, articles will be conclusions with a few supporting facts that will often sway the reader. I find this problematic for two reasons. First, the reader does not have the chance to fully understand the topic because no background is given. Secondly, the reader doesn't really have an opportunity to disagree with the writer's conclusion if the reader has little to no knowledge of the topic.

Monday, 16 September 2013

Miss America: Solving the Issue of Ignorance


Hate, ridicule, antagonism, spite, malevolence, resentment.

All these words are relatively nasty little combinations of letters that have been used quite recently to describe the negative reaction of some Americans to the appointment of the new Miss America. It brings to mind the late Christopher Hitchens asking “What is it you most dislike?” and proceeding to answer his own question with “Stupidity, especially in its nastiest forms of racism and superstition”.  
The new Miss America - born and raised American and aspiring to be a doctor.
Hitchens should have followed up.

Yes, stupidity can be quite frustrating.  Comments of terrorism, association to radical Islam, and the geographic faux pas placing India as an Arabic country were all made because the new Miss America has a higher concentration of melanin than some would prefer. Yes, stupidity can accurately describe some of the comments made over social mediums. The quote from Hitchens implies we should hate this kind of stupidity. Dislike it. Fight fire with fire and initiate public shaming to those who make these statements.

However, hate usually doesn’t work.

Public shaming of individuals does little. It brings unwarranted publicity creating unnecessary controversy and anger. Hate does little to address the actual problem that is being displayed from these comments. These ignorant comments are the result, not the cause. To counter this problem, the cause must be addressed.

Aristotle stated that “all human actions have one or more of these seven causes: chance, nature, compulsion, habit, reason, passion and desire”. If Aristotle is correct, the cause of these actions lie within one of these seven words. It is arguable that it is nature. Many of the comments most likely came from individuals who have not been exposed to new surroundings, a different environment, and thus different persons.  Understanding begins with experiencing, and ignorance is the offspring of unfamiliarity.

So instead of initiating a hateful response of ridicule to those who stated such ridiculous comments, a proper response would be to broaden the minds of those of those who cannot understand how one who has a darker pigment can be American. Education of the matter is not enough. Perspicacity can only be accomplished through collaboration and interaction, not through chortling at others mistaken assertions.

The new Miss America has already stated that she will answer the hostility by rising above it. Rather, she may be more successful in engaging those who are ignorant. Challenge those who have not met those who have a different skin colour. Focus on the commonalities that make not just all those born in America, American - but all those born as a human a part of mankind.

As a famous writer once said, “our true nationality is mankind”. 

Monday, 9 September 2013

The Result of Every Nation Abolishing their Debt

Some readers have asked what would occur should every single government in the world just abolish, or default, on their debts. Although the answer may be simple to those who understand the global economy, for most it is quite a real question. If every single country in the world just decided to default on their financial obligations, the following would most likely briefly describe the general result. 
What if this was all eliminated? 

  • First realize that there are different governmental levels. Federal, State (Provincial) or Municipal (city). Each level has debt and obligations in the form of bonds. We’ll assume for the sake of the scenario that each level of government decides to default on their obligations completely wiping out their deficits and budget shortfalls.
  • This would wipe out the bondholders. Who are they exactly? Well institutional banks, international organizations such as the IMF or World Bank, could be another layer of government loaning to another (Federal to State/City does happen), personal investors, or even charities in the form of trying to keep a fund alive.
  • Why do you care? Well, banks invest the savings of their customers. This would completely wipe out the savings of most of the population, and destroy bank’s ability to issue credit. Why is credit needed? For almost everything from beginning a business, to buying a new car on payments, to buying a house with mortgages, you get the point. Bank’s would have a lot less liquidity and would essentially stop loaning.
  • International organizations who have now no fire power to help around the world with problems such as natural disaster to supplying rebels with the ammunition to overthrow their tyrannies would cease to exist. Why? They simply would have no money.
  • Personal Investors and people who invested in the bank or government bonds would see their entire life savings wiped out in most cases. This would flood the job market with anyone who was retired as they would be forced to work again.
  • The job market would be non existent as there would be no liquidity. Credit is used on a daily basis by millions of corporations around the globe to conduct daily business, like manufacturing plants securing parts in to continue production. Without credit this fiat currency based economy does not run. The money multiplier effect would cease to exist. The bank runs that would occur would destroy all banks. 
  • Governments may be debt free, but no one in their right mind would lend them money again. This would cut funding for many programs from Health Care, Welfare, to basic stuff such as police and fire fighter services.
  • With cutting to all these services as the government could not raise money from issuing bonds, the job market destroyed, bank runs causing the destruction of financial institutions, little taxation revenue, chaos would ensue.

    In simple terms, the above would be the answer to the question. The chain reaction should all governments default on their debt would be catastrophic, and most likely reset global economic activity a decade.