0

2021 Hope

EDITOR, The Tribune.

For everything you have missed, you have gained something else, and for everything you gain, you lose something else.” — Ralph Waldo Emerson.

The 21st year in the 21st century will be even more interesting than 2020, the year of perfect vision. This year was a challenging year for The Bahamas with 7871 cases of COVID-19 and 170 deaths, The Bahamas has been transformed by the COVID-19 crisis. The tourism industry earns over 50 percent of the country’s total foreign exchange earnings and provides about one-fourth of all jobs in the Bahamas. Tourism is down more than 50% therefore the Bahamas economic activities have decreased by at least 10%. It appears that a new economic order is materialising with over US $18 trillion debt at negative interest and central banks at negative interest rates and near zero interest rates. The Bahamas interest rate is 4.0%, according to the Central Bank of the Bahamas. Interest rate and money creation are the tools used to manage the economy. Since global debt is at US$ 277 trillion (over 322% of global GDP), money creation will have little effect. Gross domestic product = Money supply x money velocity. Increasing money velocity has been futile because of the fear of job loss, and tough economic times triggered by COVID-19. The most effective vehicle to increase money velocity is employment creation and small businesses. Big businesses are usually subsidiaries of a foreign company. Most of the foreign exchange earned eventually leaves the country. Small businesses are locally owned and therefore the much-needed foreign exchange will stay at home.

According to the Bank of international settlement, as a digital liability of the Central Bank, wholesale CBDCs could become a new instrument for settlement between financial institutions, while retail (or general purpose) CBDCs would be a central bank liability accessible to all. There is also work on policy design frameworks (Davoodalhosseini and Rivadeneyra (2020), Agur et al (2019), Allen et al (2020)), their implications for cross-country payments (Milkau (2019)), implications for the international role of currencies (Ferrari et al (2020) and legal aspects of their issuance (Hess (2020), Duque (2020), Nabilou (2020), Belke and Beretta (2019)).

The US dollar standard started in August 1971 when US President Nixon took the US dollar off the Gold standard; it will be fifty years old. The IMF and the World Economic Forum has called for a new Bretton Woods or a reset. This will happen within the next 10 years because the present system is no longer sustainable. Interest rates near zero because of huge debt. There is no way for interest rates to normalize to around 10 per cent without crashing the economic system. The United States with the World reserve currency and viewed by many as the world’s strongest economy tried to raise interest rates to 2.5% in December 2018 and the stock market crashed. They had to take interest rates to near zero- 0.25 %. It is my view that the end game of the COVID-19 crisis is the central bank digital currency which will likely be backed by contracts. The Federal Deposit Insurance Corporation (FDIC) mandates that banks open digital wallet in January 2021 for all its customers to receive stimulus money, in the US.

“Close scrutiny will show that most ‘crisis situations’ are opportunities to either advance, or stay where you are.” Maxwell Maltz. Things will never get back to the old normal. We call the present situation due to COVID-19 the new normal. I am optimistic because I surmise that human beings will inevitably move to freedom and prosperity, no matter how long it takes. The end of Feudalism, slavery and tyrannical government supports that hypothesis. History illustrates the inexorability of human property.

Happy new year- 2021

Brian Ellis Plummer

Nassau,

December 31, 2020.

Comments

GodSpeed 2 weeks, 5 days ago

I am optimistic because I surmise that human beings will inevitably move to freedom and prosperity, no matter how long it takes. The end of Feudalism, slavery and tyrannical government supports that hypothesis.

Most of human history has been slavery, and now debt slavery. Western civilization is responsible for the end of slavery as a global practice, in Africa blacks are still bought, sold and kept as slaves even today. Now that western civilization is collapsing you can be sure that the future is serfdom. The World Economic Forum has already announced "The Great Reset" and their motto "Build back better" which is also Joe Biden's campaign slogan. The Chinese Communists are on board, the upcoming Socialist USA under Biden is on board. "The Great Reset" can only be described as modern day Serfdom. A world in which you will "own nothing", their words, not mines.

0

Sign in to comment