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Brave New Wealthy World: Winning the Struggle for World Prosperity

Book Description

Brave New Wealthy World demonstrates how today's international financial arrangements arespreading prosperity and well-being more widely than ever before—and what it'll take to spreadthe wealth to virtually every corner of the Earth.

John C. Edmunds proposes a new symbiotic relationship between rich and poor countries thatoffers powerful benefits to both. He demonstrates why "first world" investors will increasinglydepend upon growth in emerging economies to achieve the returns they need and offers a blueprintfor transforming emerging nations' financial systems into powerful drivers of economic growth.

This book cuts through the conventional wisdom and ideologies that hide the true implicationsof globalization—and reveals a pragmatic path to a hopeful future.

  • The long-term forecast: prosperity spreading worldwide

    The middle class grows—by billions

  • Financial assets: the new catalysts of world prosperity

    Securitization: unleashing the power of emerging economies

  • Why "rich" countries will increasingly depend on investments in emerging economies

    A new symbiosis between rich and poor

  • Proven policies for promoting the investments that supercharge growth

    Overcoming the obstacles to investment in emerging economies

  • Powerful lessons from three recent boom/bust cycles

    A tale of three booms

  • Population trends and their surprising implications

    Demographics and economic destiny

  • Accelerating the economic revolution that's bringing new prosperity to billions

    "Professor Edmunds does an outstanding job in explaining—in great detail and with examplesdrawn from concrete experience—why liquidity matters and why financial services make all thedifference if wealth is to be created. Extremely useful insight into the process of adding valuethrough securitization."

    —Hernando de Soto, author of The Mystery of Capital
    and President of the Institute for Liberty and Democracy (ILD)

    "I learned more about economics talking to Edmunds than I ever did in graduate school. Heshows that capitalism works. It can even work in developing countries. Capitalism is alreadyequalizing the distribution of income and bringing prosperity to many third world places.Capitalism can and will work if governments do not get in its way."

    —Peter T. Paul, Chairman, Sequoia National Bank, California

    "A provocative book with rich insights gleaned from the author's extensive professionalexperiences in developing countries."

    —James E. Austin
    Snider Professor of Business Administration, Harvard Business School

    "Edmunds has attracted attention here in Chile with ideas about faster growth than we haveexperienced recently. This book is provocative and will be controversial."

    —Alvaro Clarke, Chief Executive
    Superintendencia de Valores y Seguros, Santiago, Chile

    "The argument that leveraging real assets through creation of financial 'titles' is veryattractive, and the book makes a good case for it. The idea that securitization can helpemerging markets to leverage their true wealth is a solid one."

    —Professor Robert Grosse, Thunderbird
    The American Graduate School of International Management

    This book identifies key mechanisms that can maximize the benefits of globalization, especiallysecuritization: the transformation of illiquid assets into securities that can be traded at willanywhere on Earth. Edmunds offers new insights into the impact of changing demographics oneconomies worldwide and reveals opportunities for enhanced rates of return on cross-borderinvestment in emerging markets.

    Table of Contents

    1. Copyright
      1. Dedication
    2. Financial Times Prentice Hall
    3. Financial Times Prentice Hall Books
    4. Preface
    5. 1. A New Force and the Race to Harness It
      1. Securitization
      2. Does Securitization Create Value?
      3. National Financial Systems
      4. National Financial Systems as Engines of Growth
      5. Asset Booms Contrasted with Bubbles
      6. A Fully Securitized Country Contrasted with a Completely Unsecuritized Country
      7. Implementing a Finance-Driven Growth Strategy
      8. Competition to Harness the Power of Securitization
      9. Origins of the Pressure to Harness the New Force
      10. Favorable Conditions for the Securitization-Driven Growth Strategy
    6. 2. An Idea Germinates
      1. A Belief Grounded in Early Experiences
      2. The Campaign to Raise Market Values Gets Underway
      3. Endnotes
    7. 3. Three Booms and How They Ended
      1. Endnotes
    8. 4. Financial Assets: Catalysts of World Prosperity
      1. Shining the Spotlight on Financial Infrastructure
      2. Growth Pattern of United States Financial Wealth 1960–1980
      3. Growth of U.S. Financial Wealth Takes Off 1980–2000
      4. Conclusion
      5. Endnotes
    9. 5. Three Defective National Financial Systems and Attributes of a Better One
      1. The Era of Financial Assets Begins
      2. Built to Fall Down
      3. Two Tasks
        1. Two Defects
      4. Deliver Us from Temptation
      5. Transmitting Pressure to Perform
      6. Conclusion
      7. Endnotes
    10. 6. Is It Workable for Everyone to Invest in the United States?
      1. Yields on U.S. Financial Investments Take Off
      2. Priorities Shift to Raising Returns on Financial Assets
      3. Americans Raise Their Aspirations
      4. The New Mechanism for Creating Wealth in the United States
      5. An Upper Limit to the Financial Wealth-Creation Process in the United States?
      6. Breaking the Upper Limit to the Financial Wealth-Creation Process
      7. Emerging Countries as Sources of Raw Material for Securitization
      8. Reforming National Financial Systems in the Emerging Countries
      9. Conclusion and Implications
      10. Endnotes
    11. 7. Structuring Viable Ways to Invest in Poor Countries
      1. Recycling Risk-Tolerant Capital
      2. The Nicaraguan Flour Mill[1]
      3. The Blue Jeans Factory
      4. Design Defects
      5. The Philippine Generating Plants
      6. No Design Defects?
      7. A Better Design
      8. Potential Gains from Better Design
      9. The Cost of Defective Design
      10. Pressure for Better Design
      11. Conclusion
      12. Endnotes
    12. 8. Population and Wealth
      1. The Controversy: Slowdown to Zero Population Growth?
      2. Implications of the Population Slowdown
      3. Causes of the Slowdown
      4. Scenarios of Population and Wealth
      5. Endnotes
    13. 9. Rising Wealth and the Impending Labor Shortage
      1. Wealth and Demand for Services
      2. Spending from Wealth
      3. Prospects for a U.S. Labor Shortage
      4. The Distribution of Wealth and the Propensity to Spend New Wealth
      5. Spending from Wealth and Job Creation
      6. An Impending Labor Shortage, Or a Mirage?
      7. Conclusion
      8. Endnotes
    14. 10. Wealth Concentration and Diffusion
      1. Improvement in the Distribution of Income
      2. A New Role for Poor People in the World Economy
      3. The New Symbiotic Relationship between Rich Countries and Poor Countries
      4. Details and Difficulties of the Symbiotic Relationship
      5. Implementing the Proposed Solution
      6. The Coming Shortage of Buyers in the Rich Countries
      7. Savers in Poor Countries Rescue Rich Retirees?
      8. International Diversification for Everyone
      9. The Main Prosperity Diffusion Scenario
      10. Feasibility of the Main Prosperity Diffusion Scenario
      11. A More Grandiose Prosperity Diffusion Scenario
      12. Conclusion
      13. Endnotes
    15. 11. Conclusion and Implications
      1. Implications for Investors
      2. A Happy Ending