Macro-Economics of the Delta of the Nvrin

Macro-‐Economics of the DELTA of the NVRIN

© North Delta College 2015

Mathema'cs applied to Business Theory 1

THE DEFENSE OF A MODERN UTOPIA

INTRODUCTION We want to present here the MacroEconomics of a fascinaFng Delta region. The only point is that this Delta is not the Delta of the Mississippi nor the Nile Delta but the Delta of the Nvrin. The Nvrin exists as a trend, a mental breaker. Its existence in mathemaFcal terms must be seen as an inducFve limit of all posiFve forces in the current world economy, as the crystallisaFon of a perfect economic system.


Picture of the Delta

The Americas of the Great Expansion defended the pursuit of Wealth as a value in itself. A spiritual value. The Originality of the Nvrin is to be even more vocal and precise: Spending money is a value in itself, the ulFmate spiritual value. So, please, discover in the following slides the breath of a different civilisaFon. With different values, different social and societal norms. The Delta of the Nvrin region. A region that will convince you the Ancient Greece is sFll somewhere out there.

SUMMARY


I)  Culture II)  Money Supply III)  Economic Model IV)  GDP and GDP Growth V)  Demographics VI)  Disposable Income VII)   Unemployment VIII)   Banking System IX)  Fiscal Policy X)  Monetary Policy XI) InternaFonal Trade XII)  Government / PoliFcs

Conclusion

CULTURE

People of the Delta put a great emphasis on an acFve lifestyle generated by personal wealth. It is a truism to say Wealth generates its own lifestyle. However, the most fundamental reversal in the Nvrin is to put the lifestyle first and the wealth generaFon as a mean. To the puritan American of old, striving to accumulate a fortune and barely enjoying it, the Nvrin says “Buy a new wristwatch first!!” New status, new Fming, new you. This very specific mindset has generated a populaFon very different from other regions and explains the specificity of its economic principles which we will describe in the subsequent slides


The High Place of a different CivilisaFon

Picture 2: The Nvrin in History

AMERICA: 1865 è 1929

EMERGING MARKETS: 21st Century

DELTA OF THE NVRIN ECONOMIC PLATFORM: Dates ???

The Acceptance of Highs and Lows

The key concept regarding money supply is related to the boom and bust period of each economic cycles. It is accepted in the Nvrin that Economies go through cycles starFng with a boom where suddenly there is a reemergence of economical growth ager a period of decay and when precisely money is pumped into the economy by the banks, thus developing flourishing firms. The boom period is followed by a bust period where the economy collapses and firms have to struggle for their survival.

This is the Nvrin principle of Wealth creaFon.


MONEY SUPPLY

Picture 3: Money InjecFon during Boom and Bust

Boom Bust

ECONOMY Money InjecFon in

the Economy by the Banks

Fabulous GDP Growth

Wealth CreaFon

Predominance of “Defensive” Business Models

ECONOMY

GDP StagnaFng

Survival of the Fijest


An Economy run by SMEs

The Economic model of the Nvrin is an ulFmate form of capitalism. The most fundamental unit of the Economical system remains the SME. No MulFnaFonals, no public sector. The Delta is The pinnacle of the private enterprise, of individual iniFaFve, of the entrepreneurial spirit.

This unique economical ecosystem creates an economy marked by innovaFon before profit, a dynamic and wholesome spirit of compeFFon between firms and a workforce ready to go the extra mile as they don’t sink into the giganFsm of the tradiFonal corporate world.

The complete deregulaFon and non-‐intervenFon of the state regarding regular business pracFces allows firms to take iniFaFve and convinces them there is reward behind calculated risks. This in return generates a vibrant economy promoFng a true spirit of conquest in its leaders and which avoids mega-‐crashes as the financial markets serve the SMEs and not the reverse.

ECONOMIC MODEL

Picture 4: A network of compeFng SMEs

THE ECONOMY

The key point here is that Wealth creaFon starts from creaFng needs in the populaFon that didn’t exist yesterday. And not merely by saFsfying exisFng needs in society. How does one create needs? Technology? Technology is one vector of wealth creaFon, one of its supports. But the answer here is not enough. UlFmately, new needs come from firms who have developed not only a new product, but moreover a new concept, a new channel of “Sein-‐RealisaFon”. And then went into a long phase of Brand DefiniFon to create a new Brand IdenFty in the mind of the potenFal client who iniFally was even unaware the niche need was there.


The Perpetual Quest of CreaFng new Needs

ECONOMIC MODEL

A FronFer Economy

One might ask how this is possible but one has to remember the Nvrin is and remains on a permanent basis a FronFer Market in all economic sectors. And this because there is no insFtuFonalisaFon of any form of economic achievements. In some sense, it is a Wild West, but with regulaFve laws prevenFng the whole system to overheat. What is not tolerated are horizontal monopolies which ends up creaFng new rules of law inside the economic system. Every firm has its class of goods and in order to produce different products you need a new separate, legal enFty. Furthermore there is absolute separaFon between the economic, judicial and legislaFve power with no possible collusion. An economic firm is therefore only a money making exercise. If laws have to be created ager new technological breakthrough, it is only the privilege of the government and parliament who make sure The Nvrin Principles are respected. Mathema'cs applied to Business Theory 8

ECONOMIC MODEL

The Essence of the Nvrin

Gross DomesFc Product (or GDP) is mainly the result of 4 principal acFviFes: 1) Banking Sector 2) Retailing 3) Industries linked with the Sea: Fishing, Sea Products, Minor Tourism 4) Mining and Natural resources exploitaFon

The first 3 are all belonging to the private sector, The last one is exclusively governmental. Due to the extreme compeFFveness in each sector the GDP per Capita is indeed very high. The GDP growth is a more touchy subject as it encompasses the essence of the Nvrin Economy. During bullish phases of the Economic cycles, the GDP increases fabulously, like in an emerging market. On the contrary when the environment becomes bearish, GDP stagnates, pupng all the firms and workforce at stress. That is the dark side of the Nvrin civilisaFon. Superior returns during booms and superior slaps during recessions when every economic agent becomes defensive.


GDP & GDP GROWTH

A vibrant working MelFng Pot

The Delta of the Nvrin is at the JuncFon point of several migraFng flows. The first one is South American and brought with it its exuberance and sense of enjoying the here and now first. The second influx of populaFon comes from Central parts of Africa, characterised by the unquenchable willpower to transform the Delta region into the promised land. The Third and last influence is the East-‐Med region which can be traced in the food habits and the Mediterranean feel of the Nvrin for newcomers.

Highly educated, the populaFon of the Delta has its preference for American or English UniversiFes and is a vocal proponent for business innovaFon, pracFcal knowledge, and pragmaFsm with Life’s challenges. They form therefore a very skilled workforce blending excellent intellectual calibre with the most purposeful professional intenFons.


DEMOGRAPHICS

Picture 5: The Nvrin melFng pot

DELTA OF THE NVRIN

LaFn American Influences

East-‐Med Feel

African roots

A growing dynamic PopulaFon

The Nvrin populaFon is extremely mobile and firmly believes in individual risk-‐taking. It is a young populaFon with surpluses of Energy re-‐invested in taking iniFaFves and being enterprising.

The natural growth is also very high without menFoning immigraFon. The increase in populaFon during the Golden years is therefore very strong and maintained due to excepFonal infrastructure, health care and EducaFonal Services supporFng the families.

Although a mature region, the age pyramid of the Nvrin shows a demographic distribuFon of an emerging naFon, with a youth well versed in Economics rather than abstract frameworks, in love with Maths and Technology rather than the usual Engineering and preferring having an impact in this world rather than sipng and dreaming behind a computer screen.


DEMOGRAPHICS

Picture 6: Age Pyramid

High Private Spending

As the salaries are indeed very compeFFve and the income tax at 0, there is lot of disposable income in the Delta among the elite as well as the middle class. Private spending is therefore remarkable and gives one reason why all businesses are thriving as the demand in the main industries is insaFable. It is the lifestyle ajached to high spending which defines the Nvrin. Earning money only makes sense if you spend it. Not necessarily in luxury items with a sedentary bias in them, but more towards a profound statement towards your own youth: using money to explore, to meet, to change, to saFsfy your self-‐actualizaFon needs and your will to power and not just sipng in a yacht doing nothing. The proximity of the Sea, the omnipresence of water and money is not an excuse for self-‐indulgence but rather a jusFficaFon for a radical transfiguraFon of all human values.


DISPOSABLE INCOME

A Different Work Ethic


Unemployment has always been low in the Nvrin. First there is no social security or benefits making it unajracFve to remain unemployed. Second, as the workforce is skilled, job prospects are always there and people are willing to seize them. However there is a culture in the Nvrin of starFng new ventures similar to the one found in the Silicon Valley except it is not restricted to new technologies. There is a real, deep venture capital market in the Delta allowing new businesses to develop and prosper. Hence the number of Self-‐employed or freelance people is very high making the noFon of unemployment very blurry. Furthermore, in the Nvrin, Employment is seen as nothing more than a disguised form of modern slavery, at best forced labour. The free-‐spirited soul is therefore his own boss and master of his own desFny and very important he is the decision-‐maker in his trade.

UNEMPLOYMENT

Banking System in the Rest of the World

In the tradiFonal Banking System, there are 3 kinds of Banks: i)  Central Banks who establish the Banking Policies in the country, print the

currency and take control of other forms of centralised banking tasks ii)  Different types of Retail Banking starFng from Microfinance at one end and

Private Banking at the other end, and with regular consumer banking in the middle, precisely for Middle class incomes. The role of this type of Banking is to cater to the Banking needs of the individuals in the populaFon.

iii)  Investment Banking who answers the needs of the corporate world: IPO; M&A; Capital Raising


BANKING SYSTEM

Picture 7: Different levels of Banking: Individuals, Firms & The State The State Firms

XXX X

Individuals

Investment Banks Retail Banks Central Banks

The ParFcularity of the Nvrin Banking System


In the Nvrin, there is only one type of Bank: the Private Bank. The Economical reasons behind this choice are 4-‐fold: i)  Prevent wealth evasion through proper signalling to the economical elite of the Nvrin that

the Nvrin remains the best place to make money whether at the individual level or the firm level.

ii)  The belief that behind any major project there is someone or a group of people ready to fund the project and whom the Entrepreneur will have to connect to, through the Venture Capitalist. Furthermore, These funders’ relaFon with the Entrepreneur pertains more to being like a patron and are thus closer to a “private banking” need on the side of the funders.

iii)  The fact there is no stock market in the Nvrin very much limits the needs of an Investment Banking system. Furthermore, financial markets have to support innovaFon and generate tangible wealth and avoid those speculaFons which do not contribute to these last two types of investment.

iv)  The state indeed prints the money and controls the money supply. But its role almost stops there and all the rest is at the hand of the firms in how they deal with it. There is therefore very lijle control and thus no central banks. It is the law of supply and demand in its purest form which controls pricing.

BANKING SYSTEM

No Income Tax, No VAT The Fiscal Policy in the Nvrin is very straighuorward: No Income Tax, No VAT. Strangely enough it starts with a Keynesian principle to increase disposable income in the families, therefore benefiFng the Economy as a whole.

The loss of revenue for the Government coming from the complete disappearance of any form of Tax is compensated from the opportunity of having the mining and natural resources of the country at their enFre disposal and therefore making money out of it as a regular business.

Government operates therefore as any other business in order to generate revenues as the tax Pandora box is closed. This model, tried before in the GCC (Gulf CooperaFon Council), is a key aspect of the Nvrin, and the root cause of its mass appeal to its supporters.


FISCAL POLICY

Picture 8: Revenues and Expenditures of the State

GOVERNMENT OF THE NVRIN

EXPENDITURES REVENUES

-‐  Pre-‐University EducaFon -‐  Health Care -‐  Armed Forces -‐  Infrastructure -‐  Government Personnel

Profit generated as a Regular Business from

exploitaFon of the Natural Resources of the Land


Price DeregulaFon

There is also total price deregulaFon in the Nvrin and it is the natural forces of supply and demand which fixes the prices of goods and commodiFes. There is thus, no control too over inflaFon or deflaFon and interest rates are leg to the individual banks, leaving these to deal with clients on basis of offer and demand. Thus state intervenFon is absolutely minimal on monetary affairs besides prinFng the money and pupng it into circulaFon.

MONETARY POLICY

Picture 9: Laws of Supply and Demand

Price

QuanFty

Demand Supply

Absolute Free Trade

There is a belief in the Nvrin for an absolute form of Free Trade. There is therefore no restricFons on the movement of goods, people and ideas. For this reason, the Nvrin economy benefits from sourcing its supplies wherever they want to purchase from, thus boosFng profits for all firms. The same applies for labour and intellectual property. The Nvrin advocates have jusFfied absolute freedom of movement as one of the reasons for higher living standards in the region.


INTERNATIONAL TRADE

Picture 10: Effect of Free Trade on Supply Chains

MercanFlism Free Trade

No lever to reduce the price

A whole Network of choices

Business Minded PoliFcs

The poliFcal regime in the Nvrin is the one of a secular parliamentary democracy. Everybody can cast his vote but because the resulFng government has to handle its own finances as a business itself (making an income out of the natural resources of the country and spending agerwards where needed), there tends to be an inclinaFon to elect only entrepreneurial or business-‐minded governants.


GOVERNMENT / POLITICS

Picture 11: The governing body of the Nvrin

Business Leaders Government

Wise-‐Men Counsel

Parliaments

People

Governs over

Elects

Chooses Is responsible in front of

Forms and Advises

Can get promoted to

The New Greece

The Delta of the Nvrin is one place in the World where the populaFon has understood that without a flourishing Economy there is no CivilisaFon at all. The Economy serves the people but people in return are mindful of its needs and the true raison d’être of any monetary transacFon. They have also understood that too much state centralisaFon hinders economic growth and therefore believe in pockets of compeFFon whether between individuals, or firms/organisaFons or even ciFes themselves. It is therefore truly the breath of Ancient Greece which blows through the whole Delta and with only one objecFve for the enFre populaFon: “Taking humankind one more step ahead.”


CONCLUSION

Date post:	06-Aug-2015
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