THE THIRD WAVE
While all of this is occurring, technology and communications restructure world markets, making transnational production both possible and necessary. And to facilitate such operations, a jet-age money system is taking form. A global electronic banking network— impossible before the computer and satellite—now instantaneously links Hong Kong, Manila, or Singapore with the Bahamas, the Cayman Islands, and New York.
This sprawling network of banks, with its Citibanks and Barclays, its Sumitomos and Narodnys, not to mention Credit Suisse and the National Bank of Abu Dhabi, creates a balloon of “stateless currency”—money and credit outside the control of any individual government—which threatens to blow up in everyone’s face.
The bulk of this stateless currency consists of Eurodollars—dollars outside the United States. In 1975, writing about the accelerated growth of Eurodollars, I warned that this new currency was a wild card in the economic game. “Here the ‘Euros’ contribute to inflation, there they shift the balance of payments, in another place they undermine the currency—as they stampede from place to place” across national boundaries. At that time there were an estimated 180 billion such Eurodollars.
By 1978 a panicky Business Week was reporting on “the , incredible state” of the international finance system and the 180 billion had mushroomed into some 400 billion dollars worth of Eurodollars, Euromarks, Eurofrancs, Euroguilders, and Euroyen. Bankers dealing with the supranational cur- : rency were free to issue unlimited credit and—not being required to hold any cash reserves—were able to lend out at bargain-basement rates. Today’s estimates put the Eurocurrency total as high as a trillion dollars.
The Second Wave economic system in which the corporation grew up was based on national markets, national I currencies, and national governments. This nation-based infra- j structure, however, is utterly unable to regulate or contain the new transnational and electronic “Eurobubble.” The structures designed for a Second Wave world are no longer adequate.
Indeed, the entire global framework that stabilized world trade relations for the giant corporations is rattling and in danger of coming apart. The World Bank, the International Monetary Fund, and the General Agreement on Tariffs and Trade are all under heavy attack. Europeans scramble to bolt j
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