Last Thursday I attended the conference given by Philip Coggan at “Fundación Rafael del Pino”, where he presented his book “Paper promises: money, debt and the new world order”, with a great speech with the economic crisis as the main point.
When you listen to Philip, you realize why he is the Buttonwood columnist of “The Economist” and worked for “Financial Times” for twenty years. The reason is the easy way he connects with people and his ability to express his ideas. At the beginning of the speech he brings a paper of five pounds and explains that, in the past, you could change it for a real five pounds value of silver or gold but, nowadays, it only gives you the thought or possibility of buying something.
The most important of the conference could be summarized as the following ideas:
– One of the keys of the actual worldwide economic crisis is that government has the unlimited capability of creating and distributing paper money (“switching on the money machine”) under the promise that they have a value.
– The “fight” of debtors against creditors: consumers assume debts with companies to combat their payments, these companies have debts to make their investments, that money comes from the government, which, at the same time, borrowed money to pay officials, politicians, unemployed people… That whole chain finished in the critical situation that started in the year 2007 and that we don´t know when it´s going to finish.
– Philip agrees with the economic experts in the fact that in a relative short future, China is going to be the first worldwide economic country. This will cause a change in the economic scene, in the economic politics and in the relation between debtors and creditors, we couldn´t forgot that China is a communist land.
Share your comments about Philip Coggan perspective.
Hoping you enjoy it,
Iago García Vaquero