Business

Saturday August 29, 2009

A guide to the new global economy

Review by ABBY WONG


The 21st Century Economy:

A Beginner’s Guide

Author: Randy Charles Epping

Publisher: Random House (Vintage)

MY parents bought a house, lived in it and hoped for its value to increase over a period of twenty to thirty years. The appreciation in value was intended as life savings. That was in the 1980s, maybe even the 1970s.

My brother, on the other hand, bought a house, rented it out and hoped for its value to appreciate quickly so that he could sell it for a profit. That was the 1990s.

It was likely that they would make money. All they needed was for the local economy to perform fairly. Though what they did was a form of investment that they had trusted and a property was a common investment by many others, it would be considered as an outdated medium in this modern age and time.

Both my parents and my brother would be awestruck by this fast-changing, capricious era, and would be amazed by the avalanche of innovative products available for them to invest in.

They would be tempted to take the risk and venture into an investment scheme completely beyond their scope of understanding. They would be butchered by the banking behemoth and forced into insanity by the flighty, precarious, profit-taking, profit-making economic and financial environment of the 21st century.

They would very simply, and innocently, go down this path because the economics of our fledgling 21st century has broken away from all that we think we have understood and has expanded beyond borders, imagination and prediction.

With the help of technology and innovation in financial services, economics has taken a new and abysmal meaning. It has become more relevant, but also, more difficult to understand than before. It is this inability to comprehend the new economy that my parents, my brother as well as so many of us, are currently suffering from.

As we rove around the turbulent abyss, feeling penitent and helpless for the financial mess we have recently befallen into, yet unable to make sense of what has happened, Randy Charles Epping comes to our rescue.

It is a timely guide for those of us who want to better understand what is going on in this new global economy and also for those who want to survive financially in this tumultuous time.

With his audience in mind, Epping succinctly covers everything that we need to know about economics and provides plenty of sidebars to aid readers in comprehending fundamental concepts. For people like me who are already familiar with these concepts, Epping makes them clearer by using events that have taken place in the past.

For those who are unfamiliar with, and somewhat intimidated by the science of economics, Epping makes it approachable and interesting, slowly drawing readers into the amazing world of macro and micro-economics, trades, currencies, globalisation, banks, financial markets, subprime, credit crunch, derivatives, hedge funds, corporate governance, and most importantly, the value of money and our pursuit of it.

Block by block, concept after concept, one event to another, Epping builds his explanation in gradations and allows readers to digest what he has to say. In the end, like a puzzle, the plethora of information begins to assemble itself cohesively, enabling readers to see the big picture and make sense of the chaos around us.

Epping does this effortlessly without the use of complicated graphs or formulas, but with his knack of explaining things in the simplest way possible.

Epping cannot stress enough his belief that the economy of the 21st century is not only one that is global, but also one where new energies and forces that we do not understand, interlay with the old, causing a collision that alters our lives in ways we never dreamed of in the past.

He includes lofty subjects that have, in the past, been regarded by economists as irrelevant. Global warming, the green economy, drugs, terrorism, wars, oil, poverty, food crises, migration, slavery, health and pandemics are some of the variables that he believes must be incorporated in economic equations.

He writes in the introduction: “Never before has it been so important for us to become economically literate.” It is with this sensibility and the sympathetic goal for all of us to have some understanding of the nuts and bolts of economics that he wrote this book.

Without a doubt, this book will contribute immensely in helping people to understand the importance of economics and to make sense of the daily news we read and hear about concerning global economy. More importantly, it is a guide for us to know what we are up against in the 21st century in order to plan our future.

My parents would guffaw away at the idea of being granted with a second mortgage on a house that has risen in value. They would find this offer too good to be true because they have not read this book to realise millions of investors have taken the second mortgage and have collectively spun the world out of control in this new global economy Epping called Fusion Economy.

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