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ECON 401: International Economics (Part 1 of 3) Commanding Heights: Battle of Ideas



May 24, 2008 – Comments (3) | RELATED TICKERS: GLD , DRYS

“It was surreal. When someone asked why he was doing the deal, here–now, he actually said, basically, ‘Because Americans are the dumbest investors around, and there’s lots of liquidity in this market.’”

CEO Dryship, George Economou

As the Oracle of Omaha, boards his plane and flys around the world looking for new investments, it is important for fools to understand why the second most wealthy person in the US, Warren Buffett might prefer investments outside of the US, at this moment in time. Why did the Oracle short the US dollar? Why is shorting the US dollar the most crowded trade in the world?

To be a successful investor for the Long Term it helps to follow and have a basic understanding of the Global Economy, basic terms, economic theories and market history. Terms such as stagflation, recession, hyperinflation, depression have occured in the US before. As an investor it is important that you be able to define these terms well enough to make an investment that most matches your future expectation.  Example: If you think the US is going into a depression or a recession or hyperinflation or renewed growth where would you invest your money? Gold? Oil? Swiss Franks? FXI?

The Commanding Heights is a FREE video series you can watch thru the internet from PBS. It provides a complete netcast of the six-hour television program as originally broadcast -- in three two-hour episodes. The episodes are subdivided into chapters, captioned, and enhanced with additional interactive content not available on television.

The Series is OUTSTANDING AND FREE!!!!!!!!!!!!!!!! Here

1. Click here 

2. Click  watch episode one

3. Take test if you want

4. If you get 80% or better I will give you a Rec, even if I hate you. DON'T CHEAT FOOLS! 

Chapter 2 The Old Order Fails [8:18]

State Planning vs Free Market

John Keynes (Consequences of the Peace) vs Friedrich von Hayek (Austrian WW1 Veteran, Retreat and Defeat) student of Ludwig von Mises

World War 1 Destroys Global Economy for  80 Years

1. Who created the idea/term Commanding Heights?  

2. Capitalist Collapse and Hyperinflation, 32 Trillion dollar shoes and billion dollar beer 

Chapter 4 Capitalism Collapses [8:48]

3. Americans could not get enough of the stock market, the number one glamour stock_______ goes from $.50 to $600 a share. 

4.  No ability to earn, no ability to re pay, no ability spend, no ability to consume. Everything went down. Where? 

5. Failure of Capitalism brings about __________________ in Italy.

Chapter 5 Global Depression [5:26]

6. __________________ created the New Deal, and a host of new agencies to stabilize markets and stop business cycle.

7. __________________ most influential economist of the age. Government should spend during depression and tighten during excess.

Chapter 6 World War II [7:00]

8. ______________________ wrote the Road to Serfdom. Rejected any government intervention in the market, as it can reduce the freedom of the people.

9. The World Bank and International Monetary Fund came out of this meeting _______________.

Chapter 7 Planning the Peace [6:47]

10. Socialist Britain suffered 50 years of horrible dental care after this hero and free market leader lost re-election _____________. England got a welfare state, union rights, womb to tomb protection. "this is better then to let a bunch of gamblers to run the economy."

Chapter 8 Pilgrim Mountain [3:42]

11. "You are all a bunch of Socialist!" said _____________ and he stomped out of the room.

Chapter 9  Germany's Bold Move [5:47]

12. In this situation a black market formed _____________ were used for currency and ______________ was used for large transactions.

Chapter 10 India's Way [3:51]

13. ______________ wants Soviet Planning and state control.  

Chapter 11 Chicago against the Tides [2:32]

Milton Friedman, George Schultz,  Al Harberger, John Kennedy choose Keynes

Chapter 12 The Specter of Stagflation 

USA, 1971 - American economy was going no where. 5 time draft dodger is an aid to Nixon.

14. President _______________ declares "War on Prices!" sets prices controls he is re-elected in a landslide! Rancher stop sending cattle to market, farmers drown their chickens and prices kept on rising.  

Chapter 13 A Mixed Economy Flounders [8:36]

15. This country state run economy would decide level of charges plumbers, taxi driver’s rates, hair dressers etc.... We were the sick man of Europe. "in 2000 the lowest standard of living will be shared in Europe by __________ and Albania."

___________ father had been a grocer, she read Road to Serfdom and changed England back to a capitalist country.   

Chapter 14 Deregulation Takes Off [7:28]

Airline industry deregulates. WOW! Incredible, just watch it! "We regulated the size of meals!"

Chapter 15 Thatcher Takes Helm [3:50]

Thatcher saves England!  JUST WATCH!

Chapter 16 Regan Rides In [8:17]

Oils strike, Carter was the high point of Keynesian, OMG! GANDALF THE WHITE!

16. ________________!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Gandalf saves the US!!!!!!!!!!!!!!!!!! 

"WE CAN GET GOVERNMENT OFF OUR BACKS!" "If not now when? If not us, who?" President Regan!!!! Unemployment hits 10%, interest rates 18-20%!!!! It took THREE YEARS, but by 1982, inflation had been slain!!!!

17. ________nomics: 

1. Sound money

2. Deregulation 

3.  Modest tax rates

4. Limited government spending (sounds like Ron Paul)

Chapter 17 War in Atlantic [1:41]

Before the war she was unpopular, after the war she was popular. She was able to complete her economic changes.  

Chapter 18 The Heights Go Up For Sale [8:08]

19. England makes right after leading everyone else wrong. _____% of British coal mines were losing money. Socialist vs Capitalists! Leads to Violence! MOST POWER UNION, WITH MOST MILITANT LEADER HAD FAILED! From 70k miners to 3k today!

Britain goes for sale! Water, coal, trains 2/3 of British state owned business sold

Chapter 19  The Battle Decided [3:26]

20. _____________ changes much of the WORLD!!!!!!!!!!!!!!!!!!!!!! Stops Socialism (mostly)

3 Comments – Post Your Own

#1) On May 25, 2008 at 2:05 PM, ATWDLimited (< 20) wrote:

Great Videos, and great recap of the Global economy. the one thing I think it overlooks is how most of these powers got their industries to be global economic big whigs. Government blocks/tariffs grew infant industries fro Germany, US, England, China, Soviet Union and many others, MOst economic powers Use the government as jump starts, before globalizing, so it is still somewhat government centered, especially emerging economies, but for the established ones, it is set as a cog in the global markets.

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#2) On May 25, 2008 at 2:26 PM, ATWDLimited (< 20) wrote:

This inspired me to write about the first true capitalist/free market economist with clout, Adam Smith. Come check it out.

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#3) On May 25, 2008 at 6:56 PM, abitare (29.47) wrote:


Thank you for the reply. Concur. There is a book about what you are saying called the Bad Samaritian.

I will come take a look.


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