WHAT IS INFLUENCING YOU IN THIS SEASON?

People often ask, ”So what good books have you read recently”.

When someone asks that question they are interested in knowing what is influencing your thinking and what is having an impact on shaping ones life in real space and time. For me I currently have two sources that are having maybe the most significant impact on shaping my perspectives in this season of my life and they are not books but two people. Tyler Ward and Jared Black. (Ana Lee & Steph very much appreciated as well). We spend a lot of time together and we talk a lot, about life, the kingdom and just we’re we are at in the small scheme of things.

To a certain degree I understand the grid I’m working with but a true understanding of the data of life is even more crucial. I am dated and they are freshly current so I constantly hear gems of wisdom or insight or perspective that realign my pursuit of True North. To me they are brilliant friends and deep wells to draw from and I always carry my bucket. My bucket is made up of questions, pursuits, ponderings and a quest for life and to share life. I think they like the bucket because we so often are all gleefully surprised when we see what comes up out of them, from within the halls of their personhood. They make Jesus’ words ring true “for the kingdom of God is within you”. They are my books and true friends having a big impact on my world my life and my future.

Thanks guys.

An Ode To Franklin 2009

An Ode to Franklin

For me the best of cities,

A city set upon a hill shining brightly for all to see;

Of all cities in our land your foundations have been laid in righteousness

And the Godly works of man have built your walls.

“On earth as it is in heaven” is destiny’s invitation beckoning us forward.

And yet a city settled, too settled for me--

the magic and the mystery have faded.

All is understood, tomorrow will be as today

And goodness will prosper by rote and routine.

No mountains to climb, simply masses to manage;

No seas to cross, merely spiritual goods to distribute;

No vistas, only endless pews to arrange.

Acute attention to the vertical or visitation has produced transformation,

And transformation rightly demands attention to the horizontal.

In settling the land we have become settled

A city where the accommodations are comfortable,

the demons cultured,

possessions eclipse passion

and those who dwell therein are at ease.

And while life is lived above lukewarmness

not much is truly hot or cold.

I came to change you and you changed

But now twenty years later I am finding myself the one changed;

I came to “lose my Life” and yet I have gained it.

So my heart is restless,

pilgrimage is tugging at my soul

the highway of Zion summons me on.

My journey may be outward and take me afar

or it may leave me right here to scale new heights within,

either way for a season be it in body or merely in soul,

be it in location or in altitude alone

I now know afresh

I was made for the vista, to see beyond what man can build.

So I’m looking for another city,

one whose architect and builder is God;

And maybe as I am changed once again, I can return and begin anew

to Franklin not just a city set upon a hill

but to my city, my dearest friends and my family.

US BANKS WARN OBAMA ON SOARING DEBT

df This is not going to happen but it highlights the high wire balancing act that must be maintained on our debt. We must continue to borrow to survive

Published: Wednesday, 27 Apr 2011 | 1:59 AM ET

By: James Politi, Financial Times

A group of the largest US banks and fund managers stepped up the pressure on Congress and the Obama administration to reach a deal to increase the country’s debt limit, saying that even a short default could be devastating for the financial markets and economy.

The warning over the debt limit is the strongest yet to come from Wall Street, highlighting growing nervousness among investors about the US political system’s ability to forge a consensus on fiscal policy. The most pressing budgetary issue confronting Congress and the Obama administration is the need to raise the US debt ceiling, which stands at $14,300 billion.

That threshold will be reached by May 16 and the Treasury department has said that in the absence of congressional action, the world’s largest economy could default by early July. Although such a scenario is still likely to be avoided, the looming deadline is stoking concerns within the financial industry.

“Any delay in making an interest or principal payment by Treasury even for a very short period of time would put the US Treasury and overall financial markets in uncharted territory and could trigger another catastrophic financial crisis,” said Matthew Zames, a JPMorgan executive, in a letter to Tim Geithner, the Treasury secretary, this week.

Mr. Zames was writing as chairman of the Treasury Borrowing Advisory Committee, which includes some of the largest investors in US government bonds, such as Bank of America Goldman Sachs Morgan Stanley, Pimco, RBS, Tudor and Soros Fund Management.

In the letter, Mr. Zames outlined several consequences of a default – or even an extended delay in raising the debt limit – that are causing jitters on Wall Street.

These included the dumping of US government debt by foreign holders !!!

and the downgrade of the US triple-A credit rating,

following last week’s move by Standard & Poor’s

to change its outlook on the US from “stable” to “negative”

for the first time in 70 years.

Other effects were a “run on money market funds”, such as the one that followed the collapse of Lehman Brothers in 2008, and a wave of “acute deleveraging”.

“Because Treasuries have historically been viewed as the world’s safest asset, they are the most widely used collateral in the world and underpin large parts of the financial markets. A default could trigger a wave of margin calls and widening of haircuts on collateral, which in turn could lead to deleveraging and a sharp drop in lending,” Mr. Zames said.

The letter was released 10 days before the launch of a new round of high-stakes fiscal negotiations to be led by Joe Biden, US vice-president.

Senior administration officials have said they have received assurances from Republican leaders that they understood the high stakes involved in the discussion on raising the debt ceiling and would avoid pushing the US towards default.

But Republicans remain adamant that they want to take advantage of the need to raise the debt limit in order to extract additional budget cuts – and stringent fiscal rules on government spending over the long term.

“If the president doesn’t get serious about the need to address our fiscal nightmare, there’s a chance [a debt ceiling vote] could not happen,” John Boehner, the Republican Speaker of the House, told Politico on Monday.

“But that’s not my goal.” “The world is watching, and while America must pay its bills, if we ask for more credit, we must prove worthy of it,” a spokeswoman for Eric Cantor, the House majority leader, told the Financial Times.

“That’s why President Obama, vice-president Biden and the leaders of their party are obligated to ensure that any debt limit increase is accompanied by serious reforms that immediately reduce federal spending and reverse the culture of debt hovering over Washington.”

Some budget analysts in Washington believe that a short-term extension of the debt limit, as long as it is worth less than $1,000 billion, could ultimately be agreed in order to give lawmakers a few more months to hash out a more lasting deal. But House Republicans – even amid mounting pressure from Wall Street – may well resist, depending on the details.

IMF BOMBSHELL: AGE OF AMERICA NEARS END

This is pretty amazing. Most people aren’t prepared for this. They aren’t even aware it’s that close.

By Brett Arends, MarketWatch

April 25, 2011, 6:31 p.m. EDT

The International Monetary Fund has just dropped a bombshell, and nobody noticed.

For the first time, the international organization has set a date for the moment when the “Age of America” will end and the U.S. economy will be overtaken by that of China.

According to the latest IMF official forecasts, China’s economy will surpass that of America in real terms in 2016 — just five years from now. And it’s a lot closer than you may think.

Put that in your calendar.

It provides a painful context for the budget wrangling taking place in Washington right now. It raises enormous questions about what the international security system is going to look like in just a handful of years. And it casts a deepening cloud over both the U.S. dollar and the giant Treasury market, which have been propped up for decades by their privileged status as the liabilities of the world’s hegemonic power.

According to the IMF forecast, whomever is elected U.S. president next year — Obama? Mitt Romney? Donald Trump? — will be the last to preside over the world’s largest economy.

Most people aren’t prepared for this. They aren’t even aware it’s that close.

Listen to experts of various stripes, and they will tell you this moment is decades away.

The most bearish will put the figure in the mid-2020s.

China’s economy will be the world’s largest within five years or so.

But they’re miscounting. They’re only comparing the gross domestic products of the two countries using current exchange rates.

That’s a largely meaningless comparison in real terms. Exchange rates change quickly. And China’s exchange rates are phony. China artificially undervalues its currency, the renminbi, through massive intervention in the markets.

The comparison that really matters

The IMF in its analysis looks beyond exchange rates to the true, real terms picture of the economies using “purchasing power parities.” That compares what people earn and spend in real terms in their domestic economies.

Under PPP, the Chinese economy will expand from $11.2 trillion this year to $19 trillion in 2016. Meanwhile the size of the U.S. economy will rise from $15.2 trillion to $18.8 trillion. That would take America’s share of the world output down to 17.7%, the lowest in modern times. China’s would reach 18%, and rising.

Just 10 years ago, the U.S. economy was three times the size of China’s.

Naturally, all forecasts are fallible. Time and chance happen to them all. The actual date when China surpasses the U.S. might come even earlier than the IMF predicts, or somewhat later. If the great Chinese juggernaut blows a tire, as a growing number fear it might, it could even delay things by several years. But the outcome is scarcely in doubt.

We have lived in a world dominated by the U.S. for so long that there is no longer anyone alive who remembers anything else. America overtook Great Britain as the world’s leading economic power in the 1890s and never looked back.This is more than a statistical story. It is the end of the Age of America. As a bond strategist in Europe told me two weeks ago, “We are witnessing the end of America’s economic hegemony.”

And both those countries live under very similar rules of constitutional government, respect for civil liberties and the rights of property. China has none of those. The Age of China will feel very different.

WILL THE AGE OF AMERICA END IN 2016?

From Peter Shadbolt for CNN

April 26, 2011 2:41 a.m.

Is the Age of America drawing to a close? According to the International Monetary Fund (IMF), its demise as the leading economic power is five years away and the next president of the United States will preside over an economy that plays second fiddle to China's.

The lender posted data on its World Economic Outlook that puts 2016 as Year Zero for China as the world's dominant economic power -- the year when China's growth trajectory intersects the decline of the U.S.'s share of world gross domestic product in terms of purchasing price parity.

According to the figures, the Chinese economy would grow from $11.2 trillion in 2011 to $19 trillion in 2016. Over the same period, the U.S. economy will rise from a dominant $15.2 trillion to a trailing $18.8 trillion.

But, as the saying goes, statistics are often used like a drunken man uses a lamp-post -- for support rather than illumination. An analyst at the IMF said in a statement much hinges on whether economic size is measured by purchasing power parity -- what your money can actually buy on the ground in any given economy, the basis of the famous "Big Mac" index -- or GDP at market rates -- which is measured by converting the national currency into a common currency (normally the U.S. dollar) and measuring how much is flowing through the economy.

The IMF projects U.S. GDP in dollars will be $15.2 trillion this year while China's will be $6.5 trillion, rising to $18.8 trillion and $11.2 trillion respectively by 2016. Under this measure, the US looks likely to stay the world's No. 1 economy if current growth rates are maintained.

"The IMF considers that GDP in purchase-power-parity (PPP) terms is not the most appropriate measure for comparing the relative size of countries to the global economy, because PPP price levels are influenced by non-traded services, which are more relevant domestically than globally," the IMF said.

"The Fund believes that GDP at market rates is a more relevant comparison. Under this metric, the U.S. is currently 130% bigger than China, and will still be 70% larger by 2016."

Nevertheless, the PPP index still has its fans, with some contending that China could be even stronger than it appears on paper thanks to the current artificially suppressed level of its currency.

"China actively suppresses the renminbi on the currency markets through massive dollar purchases. As a result the renminbi is deeply undervalued on the foreign-exchange markets. Just comparing the economies on their exchange rates misses that altogether," said MarketWatch columnist Brett Arends.

"Purchasing power parity is not a perfect measure. None exists. But it measures the output of economies in terms of real goods and services, not just paper money. That's why it's widely used to compare economies. The IMF publishes PPP data. So does the Organisation for Economic Co-operation and Development (OECD). Many economists rely on them," he said.

While the slope of the graph is declining for the U.S. and rising for China, reports of the death of the U.S. economy look certain to be greatly exaggerated and could still be many decades away.

Other measures such as per capita income as a proportion of GDP still sees the United States many years ahead of China and other readings that measure social and structural problems could still see the Chinese juggernaut blow a tire yet.

WHY THE DOLLAR'S REIGN IS NEAR AND END

For decades the dollar has served as the world's main reserve currency, but, argues Barry Eichengreen, it will soon have to share that role. Here's why—and what it will mean for international markets and companies.

Wall Street Journal's David Wessel sits down with three senior experts in international finance - Edwin M. Truman, Joseph E. Gagnon and Eswar Prasad - for a discussion on the major issues facing currencies and the global economy.

The single most astonishing fact about foreign exchange is not the high volume of transactions, as incredible as that growth has been. Nor is it the volatility of currency rates, as wild as the markets are these days. Instead, it's the extent to which the market remains dollar-centric.

The greenback, in other words, is not just America's currency. It's the world's. But as astonishing as that is, what may be even more astonishing is this: The dollar's reign is coming to an end. I believe that over the next 10 years, we're going to see a profound shift toward a world in which several currencies compete for dominance.

The impact of such a shift will be equally profound, with implications for, among other things, the stability of exchange rates, the stability of financial markets, the ease with which the U.S. will be able to finance budget and current-account deficits, and whether the Fed can follow a policy of benign neglect toward the dollar.

The Three Pillars

How could this be? How could the dollar's longtime most-favored-currency status be in jeopardy?

First, its allure reflects the singular depth of markets in dollar-denominated debt securities. The sheer scale of those markets allows dealers to offer low bid-ask spreads. This makes the dollar the most convenient currency in which to do business for corporations, central banks and governments alike.

Second, there is the fact that the dollar is the world's safe haven. In crises, investors instinctively flock to it, as they did following the 2008 failure of Lehman Brothers. This tendency reflects the exceptional liquidity of markets in dollar instruments, liquidity being the most precious of all commodities in a crisis. It is a product of the fact that U.S. Treasury securities, the single most important asset bought and sold by international investors, have long had a reputation for stability.

Finally, the dollar benefits from a dearth of alternatives. Other countries that have long enjoyed a reputation for stability, such as Switzerland, or that have recently acquired one, like Australia, are too small for their currencies to account for more than a tiny fraction of international financial transactions.

What's Changing

First, changes in technology are undermining the dollar's monopoly. Not so long ago, there may have been room in the world for only one true international currency. Given the difficulty of comparing prices in different currencies, it made sense for exporters, importers and bond issuers all to quote their prices and invoice their transactions in dollars, if only to avoid confusing their customers. Now, however, nearly everyone carries hand-held devices that can be used to compare prices in different currencies in real time.

Second, the dollar is about to have real rivals in the international sphere for the first time in 50 years. There will soon be two viable alternatives, in the form of the euro and China's yuan.

Americans especially tend to discount the staying power of the euro, but it isn't going anywhere. Contrary to some predictions, European governments have not abandoned it. Nor will they. They will proceed with long-term deficit reduction, something about which they have shown more resolve than the U.S. And they will issue "e-bonds"—bonds backed by the full faith and credit of euro-area governments as a group—as a step in solving their crisis. This will lay the groundwork for the kind of integrated European bond market needed to create an alternative to U.S. Treasurys as a form in which to hold central-bank reserves.

China, meanwhile, is moving rapidly to internationalize the yuan, also known as the renminbi. The last year has seen a quadrupling of the share of bank deposits in Hong Kong denominated in yuan. Seventy thousand Chinese companies are now doing their cross-border settlements in yuan. Dozens of foreign companies have issued yuan-denominated "dim sum" bonds in Hong Kong. In January the Bank of China began offering yuan-deposit accounts in New York insured by the Federal Deposit Insurance Corp.

Admittedly, China has a long way to go in building liquid markets and making its financial instruments attractive to international investors. We Westerners have underestimated China before. We should not make the same mistake again.

Finally, there is the danger that the dollar's safe-haven status will be lost. Foreign investors—private and official alike—hold dollars not simply because they are liquid but because they are secure. The U.S. government has a history of honoring its obligations, and it has always had the fiscal capacity to do so.

But now, mainly as a result of the financial crisis, federal debt is approaching 75% of U.S. gross domestic product. Trillion-dollar deficits stretch as far as the eye can see. And as the burden of debt service grows heavier, questions will be asked about whether the U.S. intends to maintain the value of its debts or might resort to inflating them away.

U.S. Impact

In this new monetary world, moreover, the U.S. government will not be able to finance its budget deficits so cheaply, since there will no longer be as big an appetite for U.S. Treasury securities on the part of foreign central banks.

Nor will the U.S. be able to run such large trade and current-account deficits, since financing them will become more expensive. On the other hand, the next time the U.S. has a real-estate bubble, we won't have the Chinese helping us blow it.

Dr. Eichengreen is the George C. Pardee and Helen N. Pardee professor of economics and political science at the University of California, Berkeley. His new book is "Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System." He can be reached at reports@wsj.com.

GOLD IS THE FINAL REFUGE AGAINST CURRENCY DEBASEMENT

States accounting for two-thirds of the global economy are either holding down their exchange rates by direct intervention or steering currencies lower in an attempt to shift problems on to somebody else, each with their own plausible justification. Nothing like this has been seen since the 1930s.

By Ambrose Evans-Pritchard Published: 6:01PM BST 26 Sep 2010

“We live in an amazing world. Everybody has big budget deficits and big easy money but somehow the world as a whole cannot fully employ itself,” said former Fed chair Paul Volcker in Chris Whalen’s new book Inflated: How Money and Debt Built the American Dream.

“It is a serious question. We are no longer talking about a single country having a big depression but the entire world.”

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The US and Britain are debasing coinage to alleviate the pain of debt-busts, and to revive their export industries: China is debasing to off-load its manufacturing overcapacity on to the rest of the world, though it has a trade surplus with the US of $20bn (£12.6bn) a month.

Premier Wen Jiabao confesses that China’s ability to maintain social order depends on a suppressed currency. A 20pc revaluation would be unbearable. “I can’t imagine how many Chinese factories will go bankrupt, how many Chinese workers will lose their jobs,” he said.

Plead he might, but tempers in Washington are rising. Congress will vote next week on the Currency Reform for Fair Trade Act, intended to make it much harder for the Commerce Department to avoid imposing “remedial tariffs” on Chinese goods deemed to be receiving “benefit” from an unduly weak currency.

Japan has intervened to stop the strong yen tipping the country into a deflation death spiral, though it too has a trade surplus. There is suspicion in Tokyo that Beijing’s record purchase of Japanese debt in June, July, and August was not entirely friendly, intended to secure yuan-yen advantage and perhaps to damage Japan’s industry at a time of escalating strategic tensions in the Pacific region.

Brazil dived into the markets on Friday to weaken the real. The Swiss have been doing it for months, accumulating reserves equal to 40pc of GDP in a forlorn attempt to stem capital flight from Euroland. Like the Chinese and Japanese, they too are battling to stop the rest of the world taking away their structural surplus.

The exception is Germany, which protects its surplus ($179bn, or 5.2pc of GDP) by means of an undervalued exchange rate within EMU. The global game of pass the unemployment parcel has to end somewhere. It ends in Greece, Portugal, Spain, Ireland, parts of Eastern Europe, and will end in France and Italy too, at least until their democracies object.

It is no mystery why so many states around the world are trying to steal a march on others by debasement, or to stop debasers stealing a march on them. The three pillars of global demand at the height of the credit bubble in 2007 were – by deficits – the US ($793bn), Spain ($126bn), UK ($87bn). These have shrunk to $431bn, $75bn, and $33bn respectively as we sinners tighten our belts in the aftermath of debt bubbles.. The Brazils and Indias of the world are replacing some of this half trillion lost juice, but not all.

East Asia’s surplus states seem structurally incapable of compensating for austerity in the West, whether because of the Confucian saving ethic, or the habits of mercantilist practice, or in China’s case by the lack of a welfare net. Their export models rely on the willingness of Anglo-PIGS to bankrupt themselves.

So we have an early 1930s world where surplus states are hoarding money, instead of recycling it. A solution of sorts in the Great Depression was for each deficit country to devalue, breaking out of the trap (then enforced by the Gold Standard). This turned the deflation tables on the surplus powers – France and the US from 1929-1931 – forcing them to reflate as well (the US in 1933) or collapse (France in 1936). Contrary to myth, beggar-thy-neighbour policy was the global cure.

A variant of this may now occur. If China continues to hold down its currency, the country will import excess US liquidity, overheat, and lose wage competitiveness. This is the default cure if all else fails, and I believe it is well under way.

The latest Fed minutes are remarkable. They add a new doctrine, that a fresh monetary blitz – or QE2 – will be used to stop inflation falling much below 1.5pc. Surely the Fed has not become so reckless that it really aims to use emergency measures to create inflation, rather preventing deflation? This must be a cover-story. Ben Bernanke’s real purpose – as he aired in his November 2002 speech on deflation – is to weaken the dollar.

If so, he has succeeded. The Swiss franc smashed through parity last week as investors digested the message. But the swissie is an over-rated refuge. The franc cannot go much further without destabilizing Switzerland itself.

Gold has no such limits. It hit $1300 an ounce last week, still well shy of the $2,200-2,400 range reached in the late Medieval era of the 14th and 15th Centuries.

This is not to say that gold has any particular "intrinsic value"’. It is subject to supply and demand like everything else. It crashed after the gold discoveries of Spain’s Conquistadores in the New World, and slid further after finds in Australia and South Africa. It ultimately lost 90pc of its value – hitting rock-bottom a decade ago when central banks succumbed to fiat hubris and began to sell their bullion. Gold hit a millennium-low on the day that Gordon Brown auctioned the first tranche of Britain’s gold. It has risen five-fold since then.

We have a new world order where China and India are buying gold on every dip, where the West faces an ageing crisis, and where the sovereign states of the US, Japan, and most of Western Europe have public debt trajectories near or beyond the point of no return.

The managers of all four reserve currencies are playing fast and loose: the Fed is clipping the dollar; the Bank of England is clipping sterling; the European Central Bank is buying the bonds of EMU debtors to stave off insolvency, something it vowed never to do just months ago; and the Bank of Japan has just carried out two trillion yen of “unsterilized” intervention.

Of course, gold can go higher.