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Ever wonder why today's corporate leaders
can't seem to plan for the long term? Why government can't
control inflation? Why the stock market is more volatile
than ever? Why interest rates rise and fall like the tides?
Why economic forecasts never seem to be right? In The
Death of Money, Joel Kurtzman, an economist and business
columnist for The New York Times, brilliantly and
convincingly argues that economic stability and a rapid
rate of growth, once America's hallmarks, have been lost
because the fundamental nature of money has changed.
Money -- in the traditional sense -- died
two decades ago with a single stroke of Richard Nixon's
pen. What followed was twenty years of a new economic disorder
that began with soaring oil, gold, and real estate prices
and continued with an unprecedented consumption binge by
government agencies and the citizenry alike. In the twenty
years of chaos, we've seen the savings and loan industry
collapse, the banking system become weaker, eclipsed by
the economy of finance, and an entirely new global medium
of exchange created that Kurtzman calls "megabyte money."
Most economists, Kurtzman argues, still
don't know what -- or how -- it all happened.
Megabyte money is different from anything
that has preceded it -- and from the money jingling in your
pocket or purse, it is part of an intricate and fragile
electronic system of truly global dimensions and of amazing
complexity. It is a non-stop, seven-day-a-week, 24-hour
network that links tens of thousands of computers in places
as lofty as the Federal Reserve and the Tokyo Stock Exchange
and as lowly as the automated gasoline pump that accepts
credit cards.
Megabyte money has created an entirely new
global economy, one which, Kurtzman warns, is still largely
unregulated, where government agencies, including the Federal
Reserve and the Treasury, have ceded much power to the world's
bankers, speculators, corporate treasurers, financiers,
and computer programmers.
In The Death of Money, Kurtzman vividly
explains how this new megabyte economy enables brokers to
electronically bundle up your home mortgage with dozens
of others, convert them into jumbo securities like a bond,
and sell those securities to investors in Germany or Japan.
In the new megabyte economy, Nobel-Prize winning equations
are programmed into computers at mutual fund companies,
and mathematicians, physicists, and even rocket scientists
are replacing the stock pickers of the past.
In the megabyte economy, money is nothing
more than the "1's" and "0's" of the
computer's code. Moving instantly along electronic highways,
$1.9 trillion changes hands each day in New York alone.
Information -- even wrong or incomplete information -- instantly
affects prices around the world.
The death of money has created a strange
new world most people have little knowledge of. It is a
world that is far more volatile and chaotic than anything
that has preceded it. Though this new world economic order
evolved without a plan, Kurtzman warns that efficient new
mechanisms must now be put into place to bring the economy
under control. If we do so, he says, the vast, productive
resources of our nation can again serve our needs.
Joel Kurtzman, an economist and business
editor at The New York Times, writes the "Business
Diary' column in the Sunday New York Times. His thirteen
other books cover such diverse subjects as international
economics, finance, and the future of biomedical technology.
Kurtzman has testified before Congress on economic matters
and for four years served as a staff economist at the United
Nations, spearheading a global research effort on the new
international economic order. He has lectured on international
economics and the future to business and academic groups
around the world. Kurtzman frequently appears on television
and radio programs to discuss the economy and the future.
He lives in Westport, Connecticut, with his wife and son.
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