The transition to the unknown made his work

At the rate where as monetary and financial situation (of this talking less) is degraded, and given "stupor" that it causes among the holders of power (Governments and central banks) and knowledge ("economists"), it is taken as Vertigo. The Western world would it not be embedded in a long process where the duration of the crisis not to count more in quarters but in years three, four, seven...

Could it be a crisis in 1929, where the world spent very quickly from the abyssal deflation of financial assets found more buyers to the deep economic depression, the United States, a scathing relapse in 1937, that collective and selective memory preferred to forget The world has changed since then, it's true. But there repeated not nor every morning. At the dawn of the 1930s, the first areas affected by the depression in the United States were the construction and automotive.

Or will well be more or less long and murky period of transition towards the unknown, such as the one which spanned between 1971 and 1982 The return at the beginning of this period at the floating exchange rates of the interwar period, to which it is was sworn at Bretton Woods in July 1944 never to return, has removed any organic link between different currency areas.

Since then, the volatility of the dollar and the divergence of interest between North America and Western Europe rates have not only grow until the absurd. The same is true of the endless flow of "liquidity" (on back on this metaphor, one of the completely blurs the ideas). Their origin has not changed: massive purchases of dollars by a small number of central banks (during the 1970s, it was the Bundesbank and the Bank of the Japan) and their accumulation by them (today, China, the Russia, Brazil, etc.) as the US Treasury debt. US public debt, it is the very basis (such as once gold) any credit distributed around the world by the banking system and assimilated. Thirty-five years, this base was multiplied by 200, and with every dollar that a Bank holds the Central Bank, it supports the less credit in the United States... $ 40 and 50 in Europe (against 15 to 20 of the time of "papa" in 1968). And as everyone knows, the expansion of credit, and its counterpart the debt, is also and especially by other pathways (derivatives markets) on a scale which was set up to the sky.

The transition to the unknown made his work. The new world that she gave birth a name and is a reality: the almost complete "financialization" of economic activity. Unnoticed consequence: central banks spent power of monetary regulation in financial markets. It is that the currency, it has become almost not found here. The treasurers of all business, financial or "non financial" (industrial, commercial), have a duty to "place" all supplies that they bring the money. But at the same time, they regardless lose their quality of liquidity in the absolute sense of the term. This is not a simple matter if, to increase somewhat the "return" so-called liquid, it has placed them in funds somewhat doped by a few drops of "subprime".

Traditionally, when it was still living under a regime of visibility, only banks invested ("placed") in the short term liquid assets. They did in Treasury bills to one to three months: no risk, but a low pay. It is the price that the entire system kept the confidence of the public. That is why the drama playing the market "interbank", still called "market monetary" is potentially a case of exceptional gravity. If it was that of a loss of confidence affecting the relations among the bankers, it would be in the presence of a somewhat repulsive scandal, but step a threat on the entire economy. After all, a good portion of the loans that the banks agreed between them were used to fund short-term speculative operations at high risk. As noted by John Kay in the "Financial Times", this is no more evil that they are prevented. What is hardly admissible is that central banks, in their zeal, help them to continue. Thus, this summer has been fueled indirectly speculation on the rise of oil on futures markets.

The lack of visibility all markets and for reasons related to their organization under the reign of finance on economic activity. How much is worth Alcatel Société Générale Total That is a barrel of oil A tonne of aluminium Cut-off price, in one way and another, are of such magnitude that they blur the concept of value. We know the standard answer of theorists that repeat the lesson learned of such American Nobel Prize: at each moment, the course of the market "integrates" all the information. Under what, the continuous rating on the model of Wall Street was introduced around the world. Incentive permanent in handling. Large operators occur at off-peak hours. They are the "alleged" market price. Investors are not fooled. Where Warren Buffett draws its prescience A very simple thing: it continues to rely on the reasoning based on facts, of course. The public investors don't know that the reasoning is banished from the modern city. It is his idea on the value of things. This is what it gets "when was value for money". The concept was a good English name "fair value" (fair value), as long in any case that the religion of the instant course ("marked to market") is imposed by the new accounting standards "an initiative that indirectly is the so-called European Commission".

Let us remember that the Soviet economy collapsed due to his inability to fix the exchange value of the goods produced.