- The Washington Times - Sunday, August 7, 2011


The debt crisis is likely to be with us for quite a while. And since the TV talking heads speak in gobbledygook, what could be more useful right now than a layman’s glossary? Herewith:

Banks — Safe houses where hardworking individuals and corporations put their savings, supposedly to finance discreetly other people’s worthy projects.

Bonds — Paper representing company or country debt bought and sold with interest paid to owners, whose value peaks when repayment looks more and more unlikely.

Central bank — Each government’s own bank to protect the national prosperity by printing money at a proper level and manipulating it against other currencies.

Correction — When the bottom falls out of the stock market and small investors get caught with their pants down, not knowing whether to hang on and hope or sell at a loss.

Derivatives — Bets on bets on bets hidden in computers until someone punches in the wrong algorithm and all hell breaks loose.

Dollar — The U.S. currency, losing its value in a deteriorating economy, but still the standard for international transactions and the guarantee for other, even weaker currencies.

ECB — The European Central Bank, the euro’s mother bank, which is proving unable to salvage bankrupt Greece, Portugal, Ireland, Spain and perhaps Italy, which can’t pay their bills because they borrowed too much elsewhere.

Euro — The European Union’s common currency, now in deep trouble because 17 different finance ministries are driving their countries’ taxing and spending in 17 different directions.

Financiers — Technocrats who believe they have mastered markets in order to feather their own nests, but who panic in times of crisis, endangering the system by calling for government handouts.

GDP — Gross domestic product, an estimate of all national economic activity, often divided to give a widely used per-person figure not revealing much about you and me.

Geithner, Timothy F. mdash; The U.S. chief financial officer who is looking for a way to get off the Obama ship of state after his government bureaucratic instincts called all the shots wrong.

Gold — A precious (as in “valuable,” not “cute”) metal whose value is considered immutable and therefore a refuge when currencies cheapen, and thus is selling at all-time highs.

IMF — The international money pot, the cavalry that was supposed to come to the rescue when individual donor-members got into trouble before the whole kit and caboodle got too big and complicated.

Inflation — When too much money chases too few goods, causing prices to spin upward and get out of control when governments simply continue printing money to solve the problem.

Intervention — A means by which central banks buy up or sell their own currency in order to stabilize, decrease or raise its value against other currencies, a policy that often doesn’t work and results only in further panic.

Merkel, Angela — Germany’s chief executive, whose training as a physicist in communist East Germany hasn’t taught her the secret on how to keep pumping out exports to countries that can’t pay in order to maintain prosperity in Europe’s largest economy.

Obama, Barack — The American chief executive, the first in the 235-year history of the republic who believes government-directed redistribution of the fruits of its citizens’ labor will ensure stability, prosperity, peace and justice.

Renminbi — Beijing’s currency, usually called the yuan, for which no one knows the value and which is used only in China — except when held by outsiders in the hope that it can eventually be reinvested back into China.

Revenue — The money coming into the government’s coffers — particularly in the U.S. — enhanced only in periods of prosperity created by a government that promotes business and does not exploit its taxpayers.

Stocks — Paper representing bets on the ability of corporations to profit under changing circumstances, swapped among gamblers who think they know more than their trading partners.

Taxes — Money squeezed out of citizens to fund the commonwealth, which when reaching exaggerated heights encourages government profligacy and taxpayer evasion, blocking entrepreneurial talent.

“Terrorists” — What spendthrift liberal politicians call lawmakers who think they ought to stick by 2010 campaign promises to rein in Washington’s 75-year-long spending spree to pay the bills before we all drown in debt.

U.S. Treasurys — American government debt traded and still widely considered, despite all the country’s trials and tribulations, to be the better place to keep one’s money, as the currently low interest paid to buyers indicates.

World Bank — A collection of highly paid, income-tax-free Washington theoreticians who helped reconstruct Europe after World War II but who mistakenly preached that government-to-government lending could modernize backward economies and societies.

Sol Sanders, a veteran international correspondent and analyst, writes weekly on the intersection of politics, business and economics. He can be reached at [email protected]

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