Seeing The Elephant Part 8

3 I find Levitt's seminal research into how lower crime rates in the United States were linked to legalized abortion and a reduction in unwanted births inspirational. While several critics have subsequently attacked his a.n.a.lysis, I nonetheless applaud the attempt to understand quantum relations.h.i.+ps in our unbelievably complex world. I find Levitt's seminal research into how lower crime rates in the United States were linked to legalized abortion and a reduction in unwanted births inspirational. While several critics have subsequently attacked his a.n.a.lysis, I nonetheless applaud the attempt to understand quantum relations.h.i.+ps in our unbelievably complex world.

4 This trend has been captured in the canon of "dumb-down" literature beginning with Richard Hofstadter's 1966 cla.s.sic, This trend has been captured in the canon of "dumb-down" literature beginning with Richard Hofstadter's 1966 cla.s.sic, Anti-Intellectualism in American Life Anti-Intellectualism in American Life, and continuing with Harold Bloom's The Closing of the America Mind The Closing of the America Mind (1988), or more recently the Postmans' (1988), or more recently the Postmans' Amusing Ourselves to Death Amusing Ourselves to Death (2005), Al Gore's (2005), Al Gore's The a.s.sault on Reason The a.s.sault on Reason (2007), and Susan Jacoby's (2007), and Susan Jacoby's The Age of American Unreason The Age of American Unreason (2008). (2008).

Chapter 1: Seeing the Elephant in the Twenty-First Century.

1 Henry Thompson, Henry Thompson, International Economics: Global Markets and Compet.i.tion International Economics: Global Markets and Compet.i.tion, 2nd ed. (Hackensack, NJ:World Scientific, 2006), 86.

2 Heita Kawakatsu and A. J. H. Latham, Heita Kawakatsu and A. J. H. Latham, Asia Pacific Dynamism 1550- 2000 Asia Pacific Dynamism 1550- 2000 (London: Routledge, 2000), 26. (London: Routledge, 2000), 26.

3 For a compilation of sources, see "Source List and Detailed Death Tolls for the Twentieth Century Hemoclysm," available at For a compilation of sources, see "Source List and Detailed Death Tolls for the Twentieth Century Hemoclysm," available at http://users.erols.com/mwhite28/warstat1.htm#Second.

4 This is unadjusted for inflation, putting total costs at perhaps $40 trillion to $60 trillion in today's terms. See "Costs of War," This is unadjusted for inflation, putting total costs at perhaps $40 trillion to $60 trillion in today's terms. See "Costs of War," http://abob.libs.uga.edu/bobk/coopc20.html.

5 See See Worldbank.org for historical data on GDP growth rates; for historical data on GDP growth rates; UNDP.org for life expectancy and health indicators. for life expectancy and health indicators.

6 There are numerous books on the subject, including my two previous books, There are numerous books on the subject, including my two previous books, Money Changes Everything Money Changes Everything and and From Third World to First Cla.s.s From Third World to First Cla.s.s, as well as Brink Lindsey's Against the Dead Hand Against the Dead Hand.

7 The Human Development Index (HDI) is a comparative measure of life expectancy, literacy, education, and standard of living for countries worldwide promoted by the United Nations. It is a standard means of measuring well-being, especially child welfare. It is often used to determine and indicate whether a country is a developed, developing, or underdeveloped country and also to measure the impact of economic policies on quality of life. This index takes a variety of indicators-including daily caloric intake, literacy, and life expectancy, among others. The Human Development Index (HDI) is a comparative measure of life expectancy, literacy, education, and standard of living for countries worldwide promoted by the United Nations. It is a standard means of measuring well-being, especially child welfare. It is often used to determine and indicate whether a country is a developed, developing, or underdeveloped country and also to measure the impact of economic policies on quality of life. This index takes a variety of indicators-including daily caloric intake, literacy, and life expectancy, among others.

8 Here, we use the World Bank definition of an emerging market. An emerging market is a transitional economy (moving from a closed to an open system) with low-to-middle per capita income. Most former Soviet and Eastern bloc countries would qualify; although the term is sometimes applied to the Gulf states, it is questionable whether these countries meet either criteria. Here, we use the World Bank definition of an emerging market. An emerging market is a transitional economy (moving from a closed to an open system) with low-to-middle per capita income. Most former Soviet and Eastern bloc countries would qualify; although the term is sometimes applied to the Gulf states, it is questionable whether these countries meet either criteria.

9 Angus Madison, Angus Madison, The World Economy: Historical Statistics The World Economy: Historical Statistics (Paris: Organization for Economic Cooperation and Development, 2004). (Paris: Organization for Economic Cooperation and Development, 2004).

10 Ibid. Ibid.

11 Indeed, Indonesian President Yudhoyono's offer to help with Iran's nuclear negotiations offers a glimpse into a potentially strong new ally. Indeed, Indonesian President Yudhoyono's offer to help with Iran's nuclear negotiations offers a glimpse into a potentially strong new ally.

12 "Mexico," "Mexico," CIA World Factbook CIA World Factbook, https://www.cia.gov/library/publications/the-world-factbook/print/mx.html.

13 My firm, HSBC, has 20,000 offices in 83 countries, employs 300,000 people, and has more than 150 million customers. My firm, HSBC, has 20,000 offices in 83 countries, employs 300,000 people, and has more than 150 million customers.

14 John L. Graham, "Trade Brings Peace," in John L. Graham, "Trade Brings Peace," in War and Reconciliation War and Reconciliation, Joseph Runzo and Nancy M. Martin, eds. (Cambridge: Cambridge University Press, 2006).

15 Consider the exception to the rule, Venezuela's Hugo Chavez. According to the Consider the exception to the rule, Venezuela's Hugo Chavez. According to the International Herald Tribune International Herald Tribune, Chavez's decisions to nationalize oil, steel, cement, and coal scared off many investors. In 1998, the Venezuelan central bank reported foreign investment of approximately $5 billion. By 2007, this figure had fallen to only $646 million. Meanwhile, Chavez's approval rating fell to 51.8 percent in February 2008 from 75.4 percent in June 2006. Matthew Walter, "Chavez's Mixed Blessing for Venezuelan Economy," International Herald Tribune International Herald Tribune, May 26, 2008, http://www.iht.com/articles/2008/05/26/business/control.php.

16 For 1950 numbers, see Angus Madison's For 1950 numbers, see Angus Madison's The World Economy: Historical Statistics The World Economy: Historical Statistics (Paris: OECD, 2004), and see (Paris: OECD, 2004), and see www.worldbank.org for 2005 statistics. for 2005 statistics.

17 Ibid. Ibid.

18 For an excellent primer on economic freedom, see the Heritage Foundation and the For an excellent primer on economic freedom, see the Heritage Foundation and the Wall Street Journal Wall Street Journal's "Economic Freedom Index" methodology, http://www.heritage.org/research/features/index/chapters/pdf/Index2008_Chap4.pdf.

19 See Mueller's excellent book See Mueller's excellent book Capitalism, Democracy, and Ralph's Pretty Good Grocery Capitalism, Democracy, and Ralph's Pretty Good Grocery (Princeton, NJ: Princeton University Press, 2001). (Princeton, NJ: Princeton University Press, 2001).

20 Milton Friedman, Milton Friedman, Capitalism and Freedom Capitalism and Freedom (Chicago: University of Chicago Press, 1962), 8. (Chicago: University of Chicago Press, 1962), 8.

21 "The Changing Face of Global Violence" in "The Changing Face of Global Violence" in The Human Security Report 2005 The Human Security Report 2005, published by the Human Security Centre (www.hsrgroup.org).

22 Ibid. Ibid.

23 Erik Gartzke, "The Capitalist Peace," Erik Gartzke, "The Capitalist Peace," American Journal of Political Science American Journal of Political Science 51, no. 1 (2007): 166-191. 51, no. 1 (2007): 166-191.

24 Dennis K. Berman, "Russians Are Coming, Wallets in Hand," Dennis K. Berman, "Russians Are Coming, Wallets in Hand," Wall Street Journal Wall Street Journal, July 22, 2008, C1.

25 "Sarkozy in Drive to Give EU Global Role," "Sarkozy in Drive to Give EU Global Role," Economist Economist, August 28, 2007.

26 The Chinese renminbi is theoretically pegged to a basket of currencies heavily weighted towards the U.S. dollar. It floats in a narrow band controlled by the government. The Chinese renminbi is theoretically pegged to a basket of currencies heavily weighted towards the U.S. dollar. It floats in a narrow band controlled by the government.

27 IMF International Financial Statistics Database, IMF International Financial Statistics Database, www.imfstatistics.org (last accessed May 29, 2008). (last accessed May 29, 2008).

28 Ibid. Ibid.

29 "Sovereign-Wealth Funds: Keep Your T-Bonds, We'll Take the Bank," "Sovereign-Wealth Funds: Keep Your T-Bonds, We'll Take the Bank," Economist Economist, July 26, 2007.

30 Mangal Goswami, Ceyla Pazarbaioglu, and Jack Ree, "The Changing Face of Investors," Mangal Goswami, Ceyla Pazarbaioglu, and Jack Ree, "The Changing Face of Investors," Finance and Development Finance and Development, March 2007, 6.

31 Ibid. Ibid.

32 "Financial Integration among Developing Countries," 2006 Global Development Finance Report,World Bank (2006). "Financial Integration among Developing Countries," 2006 Global Development Finance Report,World Bank (2006).

33 Ruchita Beri, "China's Rising Profile in Africa," Ruchita Beri, "China's Rising Profile in Africa," China Report China Report 43, no. 3 (2007): 297-308. 43, no. 3 (2007): 297-308.

34 For more, see For more, see http://www.equator-principles.com.

35 Joseph Khan, "China Courts Africa," Joseph Khan, "China Courts Africa," New York Times New York Times, November 3, 2006.

36 Somini Sengupta, "Take Aid from China and Take a Pa.s.s on Human Rights," Somini Sengupta, "Take Aid from China and Take a Pa.s.s on Human Rights," New York Times New York Times, March 9, 2008.

37 Ibid. Ibid.

38 "China Denies Report of Arms Sales to Sudan," Xinhua Newswire, March 14, 2008, "China Denies Report of Arms Sales to Sudan," Xinhua Newswire, March 14, 2008, http://news.xinhuanet.com/english/2008-03/14/content_7792198.htm.

39 Gerhardt Schroeder, speech given at Columbia University, December 11, 2007. Gerhardt Schroeder, speech given at Columbia University, December 11, 2007.

40 Chris Giles, "Globalisation Backlash in Rich Nations," Chris Giles, "Globalisation Backlash in Rich Nations," Financial Times Financial Times, July 22, 2007.

41 Nancy M. Wingfield, "Book Review: The Problem with 'Backwardness': Ivan T. Berend's Central and Eastern Europe in the Nineteenth and Twentieth Centuries," Nancy M. Wingfield, "Book Review: The Problem with 'Backwardness': Ivan T. Berend's Central and Eastern Europe in the Nineteenth and Twentieth Centuries," European History Quarterly European History Quarterly 34, no. 4 (2004): 535-551. 34, no. 4 (2004): 535-551.

42 Glyn Ford, "In the Wake of Xenophobia: The New Racism in Europe," Glyn Ford, "In the Wake of Xenophobia: The New Racism in Europe," UN Chronicle UN Chronicle 44 (2007). 44 (2007).

43 "EU 'Blue Card' to Target Skilled," "EU 'Blue Card' to Target Skilled," BBC News BBC News, October 2007.

44 Joanna McKenna, "Protectionism on the Rise, Warn Global Executives-Annual Global Growth Rates Could Drop by One Percentage Point," Joanna McKenna, "Protectionism on the Rise, Warn Global Executives-Annual Global Growth Rates Could Drop by One Percentage Point," Economist Intelligence Unit Economist Intelligence Unit, press release, November 2006.

45 Lee Hudson Teslik, "Fast-Track Trade Promotion Authority and Its Impact on US Trade Policy," Council on Foreign Relations, June 2007. Lee Hudson Teslik, "Fast-Track Trade Promotion Authority and Its Impact on US Trade Policy," Council on Foreign Relations, June 2007.

46 "Top 7 Political Risks for 2007," Eurasia Group, February 2007, 3. "Top 7 Political Risks for 2007," Eurasia Group, February 2007, 3.

47 Ibid., 4. Ibid., 4.

48 "Financial Integration Among Developing Countries," 2006 Global Development Finance Report,World Bank, 21. "Financial Integration Among Developing Countries," 2006 Global Development Finance Report,World Bank, 21.

49 Robert McMahon and Lee Hudson Teslik, "New Push for Doha Talks," Council on Foreign Relations, February 2007. Robert McMahon and Lee Hudson Teslik, "New Push for Doha Talks," Council on Foreign Relations, February 2007.

50 Jayant Memon, "Bilateral Trade Agreements and the World Trading System," Asian Development Bank Inst.i.tute, November 2006. Jayant Memon, "Bilateral Trade Agreements and the World Trading System," Asian Development Bank Inst.i.tute, November 2006.

51 Applying quantum physics concepts in social science is a nascent, fascinating field. Many of my ideas have been in spired by writings from Dina Zohar and Joseph Fris, among others. Applying quantum physics concepts in social science is a nascent, fascinating field. Many of my ideas have been in spired by writings from Dina Zohar and Joseph Fris, among others.

Chapter 2: Trade and Finance: Money, Money Everywhere.

1 The N-11 countries are Indonesia, Nigeria, South Korea, Mexico, Turkey, Vietnam, Iran, Philippines, Egypt, Pakistan, and Bangladesh. The N-11 countries are Indonesia, Nigeria, South Korea, Mexico, Turkey, Vietnam, Iran, Philippines, Egypt, Pakistan, and Bangladesh.

2 UBS, August 23, 2007. Keep in mind that much of this trade is linked to intermediate processing, which may seem a little like double counting. Nonetheless, it underscores how much more emerging markets countries are connected than in the past. UBS, August 23, 2007. Keep in mind that much of this trade is linked to intermediate processing, which may seem a little like double counting. Nonetheless, it underscores how much more emerging markets countries are connected than in the past.

3 This is an overly simplistic example. There are other costs, such as insurance, tax, and transportation, that would figure into the decision to use overseas production. This is an overly simplistic example. There are other costs, such as insurance, tax, and transportation, that would figure into the decision to use overseas production.

4 David Ricardo's nineteenth-century corollary to free trade holds that countries (that is, those that do not have the absolute advantage) can gain from trade if they exploit cost differentials. David Ricardo's nineteenth-century corollary to free trade holds that countries (that is, those that do not have the absolute advantage) can gain from trade if they exploit cost differentials.

5 There are many overlapping phases in trade. One would rarely find such a neat example when industries simply start and stop, and labor s.h.i.+fts overnight.These phases can last years or even decades. There are many overlapping phases in trade. One would rarely find such a neat example when industries simply start and stop, and labor s.h.i.+fts overnight.These phases can last years or even decades.

6 "The Coming Demographic Deficit: How Aging Populations Will Reduce Global Savings," McKinsey Global Inst.i.tute, December 2004. "The Coming Demographic Deficit: How Aging Populations Will Reduce Global Savings," McKinsey Global Inst.i.tute, December 2004.

7 Ibid. Ibid.

8 Bureau of Economic a.n.a.lysis, s.v.,"U.S. International Transactions, 1960-Present," Bureau of Economic a.n.a.lysis, s.v.,"U.S. International Transactions, 1960-Present," International Economic Accounts International Economic Accounts, http://www.beagov/national/index.htm#gdp. .

9 U.S. Census Bureau, s.v., "Persons Below Poverty Level and Below 125 Percent of Poverty Level by Race and Hispanic Origin: 1959 to 2005," U.S. Census Bureau, s.v., "Persons Below Poverty Level and Below 125 Percent of Poverty Level by Race and Hispanic Origin: 1959 to 2005," 2008 Statistical Abstract 2008 Statistical Abstract, http://www.census.gov/compendia/statab/cats/income_expenditures_poverty_wealth.html 10 U.S. Census Bureau, s.v., "Money Income of Households-Percent Distribution by Income Level, Race, and Hispanic Origin in Constant (2005) Dollars: 1980 to 2005," U.S. Census Bureau, s.v., "Money Income of Households-Percent Distribution by Income Level, Race, and Hispanic Origin in Constant (2005) Dollars: 1980 to 2005," 2008 Statistical Abstract 2008 Statistical Abstract, http://www.census.gov/compendia/statab/cats/income_expenditures_poverty_wealth.html 11 Jim O'Neil et al., "Getting Globalization Right: Meeting the Challenge of the Century," Jim O'Neil et al., "Getting Globalization Right: Meeting the Challenge of the Century," Goldman Sachs Global Economics Paper Goldman Sachs Global Economics Paper 95 (2003). 95 (2003).

12 "Emerging-Market Multinationals: The Challengers," "Emerging-Market Multinationals: The Challengers," Economist Economist, January 10, 2008.

13 Mansoor Dailami, "Globalization of the Corporate Sector in Emerging Markets," lecture presented at the World Bank Conference, Zurich, Switzerland, May 2008. Mansoor Dailami, "Globalization of the Corporate Sector in Emerging Markets," lecture presented at the World Bank Conference, Zurich, Switzerland, May 2008.

14 For example, in May 2008 the Indian telecom operator Bharti made an $18 billion-plus offer to take control of South Africa's MTN, valuing the South African ent.i.ty at more than $35 billion, one of the largest cross-border emerging market deals. Agence France-Presse, "Bharti, MTN Merger Talks Could Wind Up This Weekend," For example, in May 2008 the Indian telecom operator Bharti made an $18 billion-plus offer to take control of South Africa's MTN, valuing the South African ent.i.ty at more than $35 billion, one of the largest cross-border emerging market deals. Agence France-Presse, "Bharti, MTN Merger Talks Could Wind Up This Weekend," Yahoo! News Yahoo! News, May 17, 2008, http://news.yahoo.com/s/afp/20080517/bs_afp/indiasafricasingaporetelecommergercompanybhartimtn.

15 "That Empty Nest Feeling," "That Empty Nest Feeling," Economist Economist, September 6, 2008.

16 The Brady Plan was designed to address the least developed country (LDC) debt crisis of the 1980s. LDCs had more than $700 billion in debt; the high debt loads made them very unstable economically. Under the plan, bank creditors would grant debt relief in exchange for greater a.s.surance of collectability in the form of princ.i.p.al and interest collateral; debt relief needed to be linked to some a.s.surance of economic reform, and the resulting debt should be more highly tradable, to allow creditors to diversify risk more widely throughout the financial and investment community. The Brady Plan was designed to address the least developed country (LDC) debt crisis of the 1980s. LDCs had more than $700 billion in debt; the high debt loads made them very unstable economically. Under the plan, bank creditors would grant debt relief in exchange for greater a.s.surance of collectability in the form of princ.i.p.al and interest collateral; debt relief needed to be linked to some a.s.surance of economic reform, and the resulting debt should be more highly tradable, to allow creditors to diversify risk more widely throughout the financial and investment community.

17 "Economic & Trade Information on Hong Kong," HKTDC, "Economic & Trade Information on Hong Kong," HKTDC, http://www.tdctrade.com/main/economic.htm.

18 John Tagliabue, "Nestle's Aim: New-Market Growth," John Tagliabue, "Nestle's Aim: New-Market Growth," New York Times New York Times, October 15, 1994.

19 Mangal Goswami, Ceyla Pazarbaioglu, and Jack Ree, "The Changing Face of Investors," Mangal Goswami, Ceyla Pazarbaioglu, and Jack Ree, "The Changing Face of Investors," Finance and Development Finance and Development, March 2007, 3.

20 "PEI Fifty," Private Equity International, May 2007, "PEI Fifty," Private Equity International, May 2007, http://www.peimedia.com/resources/Conference/downloads/PEI50_Brochure_final.pdf.

21 To go long refers to holding stock; to short refers to selling stock before owning it (a technique that bets the price of a given stock will fall). Market risk is hedged because the hedge fund portfolio does not necessarily move with the market. To go long refers to holding stock; to short refers to selling stock before owning it (a technique that bets the price of a given stock will fall). Market risk is hedged because the hedge fund portfolio does not necessarily move with the market.

22 Some use excessive leverage, depending on strategies pursued-the infamous Long Term Capital Management in the late 1990s reportedly used leverage of nearly 50:1. Some use excessive leverage, depending on strategies pursued-the infamous Long Term Capital Management in the late 1990s reportedly used leverage of nearly 50:1.

23 a.s.sociated Press, "Former PM Mahathir to Meet Financier George Soros in Malaysia," a.s.sociated Press, "Former PM Mahathir to Meet Financier George Soros in Malaysia," International Herald Tribune International Herald Tribune, December 12, 2006.

24 Simon Johnson, Simon Johnson, Finance and Development IMF Magazine Finance and Development IMF Magazine, September 2007, http://www.imf.org/external/pubs/ft/fandd/2007/09/straight.htm.

25 The first sovereign wealth fund was formed in 1956. British administrators in the Gilbert Islands (now known as Kiribati) attempted to minimize the impact of international price fluctuations on the South Pacific atoll's export-dependent economy. They created the Kiribati Equalization Reserve Fund by levying a tariff on the export of phosphates contained in bird manure-one of their primary exports alongside fish and coconuts. The small country's supply of phosphates was rapidly depleted, but the tariff proceeds have grown into a $520 million portfolio-nearly seven times the nation's annual GDP. The first sovereign wealth fund was formed in 1956. British administrators in the Gilbert Islands (now known as Kiribati) attempted to minimize the impact of international price fluctuations on the South Pacific atoll's export-dependent economy. They created the Kiribati Equalization Reserve Fund by levying a tariff on the export of phosphates contained in bird manure-one of their primary exports alongside fish and coconuts. The small country's supply of phosphates was rapidly depleted, but the tariff proceeds have grown into a $520 million portfolio-nearly seven times the nation's annual GDP.

26 "The Invasion of the Sovereign-Wealth Funds," "The Invasion of the Sovereign-Wealth Funds," Economist Economist, January 17, 2008.

27 One of the only potentially shady SWF political maneuvers to date concerns Singapore's Temasek Holdings, which purchased a stake in the company owned by the prime minister of Thailand, Thaksin s.h.i.+nawatra. This deal contributed to corruption charges against Thaksin and his eventual ouster. One of the only potentially shady SWF political maneuvers to date concerns Singapore's Temasek Holdings, which purchased a stake in the company owned by the prime minister of Thailand, Thaksin s.h.i.+nawatra. This deal contributed to corruption charges against Thaksin and his eventual ouster.

28 See See www.hsh.com for the latest and historical data on U.S. mortgage rates. for the latest and historical data on U.S. mortgage rates.

29 Joe Millman, "Latin America Feels Pain of U.S. Housing Slump," Joe Millman, "Latin America Feels Pain of U.S. Housing Slump," Wall Street Journal Wall Street Journal, April 23, 2007, A2.

30 The Basel group includes 13 countries: Belgium, Canada, France, Germany, Italy, j.a.pan, Luxemburg, Netherlands, Spain, Sweden, Switzerland, United Kingdom, and United States. The Basel group includes 13 countries: Belgium, Canada, France, Germany, Italy, j.a.pan, Luxemburg, Netherlands, Spain, Sweden, Switzerland, United Kingdom, and United States.

31 Walter Molano, "Blame It on Basel," Walter Molano, "Blame It on Basel," Emerging Markets Adviser Emerging Markets Adviser (BCP Securities, Greenwich, CT), February 7, 2008. (BCP Securities, Greenwich, CT), February 7, 2008.

32 Many of these securities were aggressively purchased by collateralized debt obligation (CDO) special purpose companies, another ratings-arbitrage variation of the SIV idea that often had more slices of risk than SIVs. The ultimate b.a.s.t.a.r.dizations of these Wall Street creations were SIVs and CDOs that bought tranches of other SIVs and CDOs, creating a phenomenally intricate web of risk and entanglement. Many of these securities were aggressively purchased by collateralized debt obligation (CDO) special purpose companies, another ratings-arbitrage variation of the SIV idea that often had more slices of risk than SIVs. The ultimate b.a.s.t.a.r.dizations of these Wall Street creations were SIVs and CDOs that bought tranches of other SIVs and CDOs, creating a phenomenally intricate web of risk and entanglement.

33 Ibid. Ibid.

34 See the International Fund for Agricultural Development's web site, See the International Fund for Agricultural Development's web site, www.ifad.org.

35 Mira Kamdar, "The Threat of Global Food Shortages-Part III," Mira Kamdar, "The Threat of Global Food Shortages-Part III," YaleGlobal YaleGlobal, May 7, 2008, http://yaleglobal.yale.edu/display.article?id=10766.

36 As a child in the 1960s I vividly remember hearing discussions and jokes about things "Made in j.a.pan." At that time j.a.panese goods were considered cheap with little quality. How things have changed! As a child in the 1960s I vividly remember hearing discussions and jokes about things "Made in j.a.pan." At that time j.a.panese goods were considered cheap with little quality. How things have changed!

37 Defined as percentage of a country's GDP divided by its World Bank purchase power parity adjusted GDP. Defined as percentage of a country's GDP divided by its World Bank purchase power parity adjusted GDP.

38 Ambrose Evans-Pritchard, "China Threatens 'Nuclear Option of Dollar Sales," Ambrose Evans-Pritchard, "China Threatens 'Nuclear Option of Dollar Sales," Telegraph Telegraph, October 8, 2007, http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/07/bcnchina107a.xml.

39 Ibid. Ibid.

40 Barry Eichengreen, "Global Imbalances and the Lessons of Bretton Woods," Barry Eichengreen, "Global Imbalances and the Lessons of Bretton Woods," National Bureau of Economic Research Working Paper National Bureau of Economic Research Working Paper 10947, May 2004. 10947, May 2004.

41 "Somewhere Over the Rainbow," "Somewhere Over the Rainbow," Economist Economist, Jan 24, 2008.