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This book gives an optimistic and disturbing view of the outlook for economic well-being in the world. It argues that a new economic mechanism is at work that is making people everywhere better off. It also argues that improvements in living standards will reach the people who are now the poorest, even if they are living in remote areas. The new economic mechanism is securitization. It works synergistically with other mechanisms driving economic progress, and under the proper circumstances can accelerate economic progress.
1. A New Force and the Race to Harness It.
Securitization. Does Securitization Create Value? National Financial Systems. National Financial Systems as Engines of Growth. Asset Booms Contrasted with Bubbles. A Fully Securitized Country Contrasted with a Completely Unsecuritized Country. Implementing a Finance-Driven Growth Strategy. Competition to Harness the Power of Securitization. Origins of the Pressure to Harness the New Force. Favorable Conditions for the Securitization-Driven Growth Strategy.
A Belief Grounded in Early Experiences. The Campaign to Raise Market Values Gets Underway.
Shining the Spotlight on Financial Infrastructure. Growth Pattern of United States Financial Wealth 1960-1980. Growth of U.S. Financial Wealth Takes Off. 1980-2000. Conclusion.
The Era of Financial Assets Begins. Built to Fall Down. Two Tasks. Deliver Us from Temptation. Transmitting Pressure to Perform. Conclusion.
Yields on U.S. Financial Investments Take Off. Priorities Shift to Raising Returns on Financial Assets. Americans Raise Their Aspirations. The New Mechanism for Creating Wealth in the United States. An Upper Limit to the Financial Wealth-Creation Process in the United States? Breaking the Upper Limit to the Financial Wealth Creation Process. Emerging Countries as Sources of Raw Material for Securitization. Reforming National Financial Systems in the Emerging Countries. Conclusion and Implications.
Recycling Risk-Tolerant Capital. The Nicaraguan Flour Mill. The Blue Jeans Factory. Design Defects. The Philippine Generating Plants. No Design Defects? A Better Design. Potential Gains from Better Design. The Cost of Defective Design. Pressure for Better Design. Conclusion.
The Controversy: Slowdown to Zero Population Growth? Implications of the Population Slowdown. Causes of the Slowdown. Scenarios of Population and Wealth.
Wealth and Demand for Services. Spending from Wealth. Prospects for a U.S. Labor Shortage. The Distribution of Wealth and the Propensity to Spend New Wealth. Spending from Wealth and Job Creation. An Impending Labor Shortage, Or a Mirage? Conclusion.
Improvement in the Distribution of Income. A New Role for Poor People in the World Economy. The New Symbiotic Relationship between Rich Countries and Poor Countries. Details and Difficulties of the Symbiotic Relationship. Implementing the Proposed Solution. The Coming Shortage of Buyers in the Rich Countries. Savers in Poor Countries Rescue Rich Retirees? International Diversification for Everyone. The Main Prosperity Diffusion Scenario. Feasibility of the Main Prosperity Diffusion Scenario. A More Grandiose Prosperity Diffusion Scenario. Conclusion.
Implications for Investors. A Happy Ending.