What is the purpose to society of the Currency Carry Trade? Individuals borrow money in a country that has a low rate of interest such as Japan or the United States. They then lend in some other place where interests rates are higher as the interest rates go up.
Donald Tsang, chief executive of Hong Kong, and Liu Mingking chairperson of China's Banking Regulatory Commission expressed concern about the low interest rates that the United States Central Bank is targeting.
And the Maverick Economist has been questioning problems when the Central Bank borrows against something other than Treasury bonds and the European Central Bank is facing risk from some of the other banks with which it dealt with. And the Maverick Economist sparked quite a debate by asking whether gold is a bubble as so much is either in vaults or in jewelry. This creates economic costs as cyanide or mercury is used in mining. Sometimes the companies go bankrupt before they clean up the mess; and the executives get paid as well. The Maverick economist says that half of the gold we have mined is available as jewelry and the other half as central stores, but the New York Times says that eighty percent of new gold is going to jewelry, often in China and India. Using figures from the Earth Encyclopaedia and the Wikipedia Article on world Wide Energy consumption, it looks like Gold mining is one tenth of one percent of worldwide energy consumption. And often mining companies do not disclose the environment liabilities to their investors. One of the problems of having a financial system where people can trade stocks before the firm pays the damages. And we should make executives at firms hold on and invest in approved investments and not spend them until we know for sure whether their decisions help either the company or the world in general. And the World Trade Bank has been financing environmentally dangerous gold mines. And often those in the area receive no benefit from the gold mines as they create few jobs and displace far more people.. All investments should get approval from a sortition jury that they perform a real function.
And I just heard that a local restaurant in my town went out of business. It was making its payments, but it was obligated to buy out the land lord after ten years. It did not have the cash. Three Buildings including the restaurant are sitting unused for which the landlord is asking $400,000.00.