Co wrote with Dr. Fred T. Davies and first appeared in Singularity Hub.
I returned to Europe this week to hear views from the other side of the pond, as US trade policy continues not just to pivot, but to spin. There is no doubt that a major reset of key trading relationships is now underway with implications for currencies worldwide. As the US economy seems to be outpacing growth everywhere except in China and India, will US monetary policy have unintended global spillover effects, especially for emerging markets? And more direct effects from trade policy in developed nations? European PMI figures announced today are down to 2-year lows.
Mexico matters. In addition to being our southern neighbor, Mexico is our third largest trading partner, after China and Canada. It is ranked as the 15th largest economy in the world. On Sunday the country experienced a seismic change in leadership. Fueled by anger at violence and corruption, Andrés Manuel López Obrador, the 64-year old populist center left candidate best known as AMLO, was elected by a clear majority in all but one state and a simple majority in both houses. He had promised to Make Mexico Great Again.
There was a basic flaw in the Vollgeld “sovereign money” proposal rejected by the Swiss in a referendum last Sunday. An arrangement that gives the state or its agencies exclusive power to create money, oversee bank accounts and direct lending to the economy is hostile to capitalism. It cannot produce the assurance needed to allow the process of rational monetary calculation that is the essence of capitalism. This was pointed out by the sociologist Max Weber in 1922. Geoffrey Ingham of Christ’s College Cambridge sums up Weber’s conclusion as follows: