The Kinesis system problem is, it is very difficult to achieve both while promoting economic activity, hence the continual desire by central planners to maintain a level of inflation, or in other words a devaluation of currency.
Under the Kinesis system we are able to take the greatest store of value, gold, make it an efficient medium of exchange via blockchain and cryptocurrency technology, then stimulate money velocity and economic activity through a multifaceted incentivizing yield system.
Similarly, today, the adjustment burden is being shifted to others. Advanced countries — including Canada, Japan, and the Euro area — have recently seen sizable appreciations of their currencies.
The net result could be a suboptimal global recovery, in which the adjustment burden in those countries with large imbalances falls largely on domestic prices and wages rather than on nominal exchange rates.
History suggests that this process could take years, repressing global output and welfare in the interim. The first is to reduce overall demand for reserves.
Alternatives include regional reserve pooling mechanisms and enhanced lending and insurance facilities at the IMF.
While there is merit in exploring IMF reforms, their effect on those systemic countries that already appear substantially over insured would likely be marginal. As I will touch on in a moment, the G-20 process may have a greater impact.
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