From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sat Jun 23 2007 - 07:19:59 EDT
I don't agree international bankers, or economists working for banks, or state officials are necessarily spin doctors. Occupationally, they cannot be, and they cannot ignore the data which they themselves publish and work with. It is quite possible to make general quantitative statements about the international credit market without "spin", i.e. there is always a way of telling the truth about who lends how much to whom over what interval, without making investors nervous. The real problem is likely rather different, i.e. it often costs money to get the knowledge out of people, and you have to ask the right questions or dig out the facts.
Mr Bernanke recently commented: "As emphasized by the information-theoretic approach to finance, a central function of banks is to screen and monitor borrowers, thereby overcoming information and incentive problems. By developing expertise in gathering relevant information, as well as by maintaining strong relationships with customers, banks and similar intermediaries develop "informational capital". http://www.bis.org/review/r070621a.pdf This "informational capital" is obviously something you're not likely to get for free unless you get lucky.
It is true, the global credit market has skyrocketed, but that is in good part because global capital markets have expanded enormously. You can now trade in areas where previously you couldn't, i.e. there is global market expansion and market integration. This means among other things you can extend more credit to more people, over a longer interval and with less collateral, and the possibilities for renegotiating credit are greater. Except for Japan, net government debt levels in the rich countries aren't much different though from what they were at the beginning of the 1990s (Japan has a large trade surplus).
The IMF frankly acknowledges "recent financial market nervousness" but claims, with data, the world economy is on track for "robust growth in 2007 and 2008". http://www.imf.org/external/pubs/ft/weo/2007/01/pdf/c1.pdf
It is just that this growth is unequally distributed across countries, and not all of the same kind. In Europe, Japan and America, total production growth by value remains rather low, while property income is growing strongly, whereas in the newly industrialising countries, production growth is very strong (GDP growth less and less reflects true national income or capital growth in the rich countries, precisely because it excludes the circuit of property income from the balances).
In general, in the world economy, the production of tangible material goods is less and less quantitatively significant *as a source of capital accumulation*, i.e. labour-services and the trade in assets of any kind have become more important. As a corollary, the fraction of surplus-values realised as rent and interest increases proportionally compared to industrial profit. Filmer's data are of course based on certain statistical categories (many "services" are not personal services but supply products), but they give some indication:
Table 1: Size and distribution of the world's wage earners, 1995 (thousands of persons)
ECONOMIC SECTOR BY REGION
Agriculture
Industry
Services
Total
East Asia and the Pacific
24,357
60,932
117,194
202,483
Europe and Central Asia
11,097
64,603
71,792
147,492
North America
8,674
87,661
188,654
284,989
Latin America and Caribbean
14,894
30,834
56,012
101,740
Middle East and North Africa
4,803
11,812
21,610
38,225
Sub-Saharan Africa
12,067
7,067
20,039
39,173
South Asia
9,868
19,051
41,836
70,755
World
85,760 (=9.7%)
281,960 (=31.9%)
517,137 (=58.4%)
884,857
Source: calculated from Deon Filmer 1995. http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/1995/07/01/000009265_3961019125009/Rendered/PDF/multi_page.pdf
You can get some longrun data series on the credit markets from: http://www.economagic.com/frbz1.htm
BTW the IMF has an interest in "skilled labour", from another angle: http://www.imf.org/external/pubs/ft/weo/2007/01/pdf/c5.pdf
Jurriaan
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