The World Is Curved
Hidden Dangers to the Global Economy
By: David M. Smick
Published: Sept 4, 2008
ISBN: 9781591842187
Format: Hardcover, 272pp
Publisher: Portfolio
"For the financial markets, the world is curved. We can't see over the horizon. As a result, our sight lines are limited", writes international financial consultant David M. Smick in his important book The World Is Curved: Hidden Dangers to the Global Economy. The author demonstrates how the uncertainty, of seeing and understanding the financial complexities facing an increasingly interdependent globalized economy, makes the world a very dangerous place.
David Smick brings his vast global experience to the study of the effects of globalization of capital markets, and their rapidly shifting vast pools of liquidity. He describes the effect of the global wealth on the growth of economies that benefit from their international movement. At the same time, the lack of complete knowledge of markets and the varying levels of transparency within them, has led to severe financial problems all over the world. The subprime crisis stemmed, in large part, from the creation of non-transparent financial instruments that still confound policy makers and regulators today.
David Smick (photo left) understands the importance of globalization and international free trade are the engines of growth for the entire planet. His fear, expressed eloquently in the book, is a rising tide of protectionism that will stifle global trade but also put a lid on entrepreneurship and innovation. Without the risk taking business class, and the vast pools of financial capital flows, the world economy can slow down almost to a halt. The power of entrepreneurship to build the economy is also under attack by over zealous regulation and punitive taxation in the wake of the global financial crisis. A loss of confidence in capitalism to grow and create jobs and wealth is threatened.
David Smick's takes the reader on a guided tour of the world's leading wealth building countries. By providing a greater understanding of the problems and potential of economies as different as China, Japan, The European Union, and the United States, the author shows how actions taken by individual governments and central banks can result in unexpected negative reactions. David Smick points out that central banks, including the United States Federal Reserve no longer possess the power or ability to control even their domestic markets. Their influence on international markets is even less important.
For me, the power of the book is the author's understanding of how the international financial markets really work. His descriptions of real world meetings in widely disparate locations, from Japan to China to Western Europe to the United States, provide a genuine feel for the uncertainty of decision making in a curved world. When no one is quite certain what is happening elsewhere, disastrous miscalculations can occur in monetary and fiscal policy. In many cases, the wrong policy decisions can deepen a crisis, instead of easing the financial pressure.
I very highly recommend the landmark The World Is Curved: Hidden Dangers to the Global Economy by David M. Smick, to anyone seeking a greater understanding of the deeper causes of the global financial crisis. The author goes beyond the conventional wisdom and provides a much deeper and richer explanation of the current economic woes in a wider global context.
Read the essential The World Is Curved: Hidden Dangers to the Global Economy by David M. Smick, and discover the importance of globalization to the prosperity of every nation, and why protectionism could delay or even destroy a world wide economic recovery.
