5 min read ⌚
Risk in the Twenty-First Century
Over the course of thousands of years, people did everything in their power to minimize the risks.
Consciously or unconsciously, we strive to create a better living space, in which we can then indulge in leisure activities.
To do so, you have to take every potential financial threat into account.
Acting with caution is what this book summary is all about – Read on!
Who Should Read “The New Financial Order”? And Why?
We often hear about the New World Order, but is there a new financial one? Let’s find out. Indeed, having an alternative for every possible scenario is impossible.
“The New Financial Order” targets a new set of audience, which realize that risks are everywhere and hiding from them is easier said than done. We recommend it for people who have at least basic knowledge in economic processes and inconsistencies.
About Robert J. Shiller
Robert James Shiller is one of America’s finest economists and authors. Currently, he is an economics professor at Yale University.
Robert is the author of several books including Irrational Exuberance.
“The New Financial Order PDF Summary”
Economic risks in the new age are treated as harmless voice, whose impact is widely disregarded. Politicians don’t seem to be stressed out about the influences which may affect the country’s GDP and global economy.
We are accustomed to stability, which is fragile even after WW2. The progress and the endless opportunities have made the everyday person feel like – there’s nothing significant to make a fuss about!
90% of these low-profile risks are perceivable only in the long-run, thereby making it impossible to spot an early threat. Due to such occurrences, politicians, the general public, and the media take them for granted.
For instance, having life or property insurance is the central defense mechanism most people embrace to safeguard their interest. Nonetheless, have you given any thoughts on the risks deriving from business twists, such as – What if Global Warming instigates chaos in your industry? Or, what if the new administration affects the currency that you are highly dependent on?
You don’t need us telling you that such precautions are non-existing, and insurance policies can’t cover similar eventualities. So, what can at least minimize the risk? Companies and organizations are compelled to manage present-day threats triggered by cutting-edge technology and here’s how:
- Gradual replacement of human resources with more-advanced technological machinery and gear.
- To find lucrative opportunities for you to leverage by using globalization as your main weapon.
- The prowess on the “battlefield” which allows a few prominent individuals to absorb the lion’s share of incomes and eventually profits.
- The ability to allocate resources to focus on building highly-advanced military equipment.
Fluctuation in currency values occurs mainly due to external influences such as in the event of war, change of foreign policy, and others. This never-ending economic issue can be put under control by pressing into service the indexed units of an account.
People are aware of the growing economic concern, which may one day leave them on the brink of financial collapse. In addition, people buy insurance policies to ensure that after some unpleasant event in the future, they’ll have a backup plan to cover their losses.
However, the society falls short in delivering highly needed offers to deal with two prevailing economic risks:
- The potential risk of not being able to sustain the earning power.
- The potential risk of a drop-off in terms of property value.
How the process goes? Similar to other insurance policies, the idea is to pass the buck over to investors who would then manage to diversify the portfolio to control the risks:
Let’s say that a company may face a potential bankruptcy, and the workers are in a real threat of ending up penniless. So, what do we do? To bottom line is, the insurance companies must find a way to put all skills and specialists into one basket. By stretching the net wide, students will not be reluctant to choose a risky profession instead of going for something mediocre.
Home Equity Insurance
In the late 70s, the idea of this type of insurance came to light. Coming directly from the Chicago suburbs, the movement was launched to stem “white flight.” Nowadays, when we have all the available technology and data in home price indexes, people can create better policies.
How far is the stock market obliged to go? We often take it as an indicator of the economic performance of a single country or region. It’s critical for you to realize that only a tiny portion of country’s financial capabilities can be gauged in the same manner.
If you are in pursuit of a better proxy-indicator – you might want to take into account the macro markets, in which potential investors could have a look at the country’s GDP.
Not being able to trade securities in similar eventualities could inflict a major blow in the country’s economic display on the global arena. This market exchange allows the investors to bet on the future values of incomes or properties!
Finding common ground with all parties is vital for keeping the morale up and ensuring that the poorer countries are gradually escaping the circle of stagnation.
Key Lessons from “The New Financial Order”
1. Currency values are at risk
2. Global awareness and understanding
3. The power of a deal
Currency values are at risk
Most people don’t know that currency as a way of evaluating someone’s wealth is declining in popularity.
According to recent financial analysis, less than 5$ of U.S. household financial capabilities are “guarded” in bank vaults. A significant chunk of the daily transactions including electronic money transfer are not cashed.
Global awareness and understanding
To stabilize the market, you need global contribution. Wealthier nations should bear the cost of low GDP in economically-weak regions, by lending money in the Third-World.
In addition, expecting a compensation when the country exceeds the GDP-expectations in the foreseeable future.
The power of a deal
The potential progressive problems can be subsided if agreements are made. The amounts paid as a foreign aid are targeting to improve the well-being of the global community.
Directing these economic resources to newly-formed or transition countries can lead to relieving the plight of those living in poverty.
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“The New Financial Order Quotes”History shows that much of financial innovation, even that which appears in the private sector, occurred only after some government initiative to improve financial markets. Click To Tweet Concerns about privacy should not lead us to try to stop progress in identification systems tied to databases. The challenge is to design these systems correctly. Click To Tweet Inequality insurance is not a Robin Hood plot to take money from the rich and give it to the poor. Like other risk management devices, it focuses only on protecting all of us from future risks. Click To Tweet Investors around the world are perfectly capable of handling the risks of Bulgaria, or of any other country, by putting it into a diversified portfolio. Click To Tweet The new information technology puts economics today roughly where astronomy was when the telescope was invented. Click To Tweet
Our Critical Review
Every book designed around the objective of improving the reader’s financial status deserves our praises.
This is not a “How-to-get-rich-quickly” Guide but how to stay wealthy.
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