U.S. Financial World War: Bernanke defends QE2


I thought that this story may have a bit of life in it! Particularly if you subscribe to the view contained in the original article (Why (and how) the U.S. Has Launched a New Financial World War ) rather than naively go along with what is pushed out from Bernanke and the usual media channels.

Below is the word from the Beeb but I was also very interested to read this piece

The truth is, Quantitative Easing will not reduce unemployment, narrow the output gap, or increase aggregate demand. At best, it will lower long-term interest rates (slightly) and buoy asset prices. That may be good for the stock market, but it won’t lay the groundwork for a strong recovery. In fact, it might not even be enough to keep the economy from slipping back into recession.

BBC News:

Germany, China, Brazil and South Africa have criticised the US plan, with the German Finance Minister Wolfgang Schaeuble saying it was “clueless” and would create “extra problems for the world”.

China’s Central Bank head Zhou Xiaochuan has urged global currency reforms, while South Africa said developing countries would suffer most.

South Africa’s finance minister Pravin Gordhan warned that “developing countries, including South Africa, would bear the brunt of the US decision to open its flood gates without due consideration of the consequences for other nations.”

The US policy “undermines the spirit of multilateral co-operation that G20 leaders have fought so hard to maintain during the current crisis,” he said.

The heads of state and government of the G20 group of the world’s leading nations is due to meet in a week in South Korea, with currencies and trade imbalances high on the agenda.

via BBC News – Fed\’s Bernanke defends new economic recovery plan.

Complexity: “Cholesterol for business”


I have used this analogy before but it is certainly worth repeating as the similarities are apparent and potential impact “alarming”…

Business systems suffer from their own version of cholesterol…it’s called…COMPLEXITY. If you don’t test for it you don’t know if it is doing damage to the vital inter-connections upon which your system is dependent!

By the time the outward signs show themselves irreparable damage is done. Sufficiently fit and able to carry out the day-to-day tasks that sustain you but “found wanting” and unable to perform when put under stress e.g. confronted with a physical challenge, fighting a disease, adapting to a change of circumstance. We don’t know what the future holds but we can say that it is more uncertain now than at any time in (at least) a generation!

We are learning more lessons from nature than at any time in our history since “The Origin of Species”.

A business is a system, like the human body. It is reliant upon its component parts and its ecosystem (marketplace, supply chain, etc.) communicating, working efficiently and interdependently to enable it to perform and sustain itself and its stakeholders.

Unlike our bodies a business does have the ability to renew its structure and to thrive again BUT SURVIVAL IS NOT GUARANTEED! A business needs to have sufficient “reserves” and the means to re-generate.

A business that was once fit enough to survive in a familiar environment – like a stable, buoyant, economy – is, not necessarily adequately equipped to do so when the environment changes – a turbulent and unpredictable economy – where, what sustains it is in shorter supply or harder to come by. The business matures (ages) and can lose some of the skills or agility that were once its mainstays. Read more of this post

Complex Systems: Business Risk Management


How often do we challenge what we “know” to ensure that our particular “belief system” is based upon the most up-to-date knowledge? Too many of us (I know for I have seen plenty!) are content to get on and do rather than to question and to propose alternative processes or solutions.

This is even more in evidence during the kind of tough times that we are all currently experiencing. The larger the organisation the more likely that questions could and should be asked. But it can be difficult to get a good enough view from your own particular “silo” AND the greater the pressure to keep your head down to just get on and do. Is this why interdependence – working, together, toward the common goal – struggles to survive in such environments?

In some organisations people can go through their entire careers without gaining a better perspective. Those that do, can soar within the company but the fear of being treated like some kind of heretic, insurgent or whistle-blower can stifle initiative and progress, thus perpetuating belief systems that may have been superseded. In “more open” organisations the ability to create, measure, manage and adapt is fundamental.

Operational interdependence IS NO LONGER intangible. Here is an extract and link to a recent Ontonix blog. Please read it and question your individual or business belief system!

What are intangibles? Is it is possible to actually measure them? How can you possibly measure something that cannot be grasped or touched and does not have a physical presence.

The most “popular” intangibles of interest are, for example, know-how, relationships, expertise, knowledge, morale, ethics, justice, collaboration, intellectual capital, etc. Human perceptions and feelings are also intangible but our lives hinge on how we deal with, for example, fear, love, anger, happiness, jealousy, greed, stress, beauty, satisfaction, desire, etc., etc.

If you can’t measure something you can’t really manage it. All you can do is simply “deal with it”. Management implies control and that, in turn, requires a measure. Science gets serious when you begin to measure.

via Ontonix – Complex Systems Management, Business Risk Management.