It is no small secret by now that the internet is a formidable and uncontrollable force. It is a tool that is powerful enough to even influence the outcome of the U.S. presidential election. The US$ 25 million Mueller Report that documents the findings and conclusions of Special Counsel Robert Mueller's investigation on how the internet managed to influence the 2016 United States presidential election failed to supply anything concrete. Even with one of the world's most powerful intelligence systems, they were unable to find anything conclusive.
As quantitative easing (QE) has recently became a common economic tool. The result is that there is an abundance of money but there not many good investment projects. Despite this, many large enterprises are willing to invest in such projects because they have the money to do so. In contrast, the middle class is struggling, and money is tight for them. This drives the middle-class to resort to politics to solve their issues, and it is them who elected Donald Trump as the President of the United States.
The rational world has turned upside down.
The global conflicts are also getting increasingly serious. This is especially true in West Asia, with the Palestine-Israel issues are becoming more critical. The mechanism for restricting nuclear weapons have been abandoned, and the modern world post World War II has never been so dangerous. Now, the multilateral trade mechanism and global trade that formed after World War II have been brushed aside. We see the rise of the far-right ideology around the world, and many of their practitioners have become new political stars. Although the world is getting richer, growing insecurity can be felt increasingly in the global capital markets, and the capitalists around the world have never been as shocked as now since the Holocaust was brought about by the Nazis.
The left-wings are attempting to provide their own solutions as well. This is despite that many of them, as it is well-known to many, are mere opportunists. When the world has to choose between such left and right wing, things would not look optimistic in the whole. Speaking about the background of the Era of the Macro Finance, the concept itself is definitely a product of the times.
The main reason for the emergence of the Macro Finance is that, in the current times, governments are often unable to salvage everything. This is exactly what happened in the 2008 Wall Street financial crisis, when the then- U.S. Treasury Secretary Henry Paulson admitted not since everything could be saved, and only the most important institutions could be salvaged. No government in the world would permit its country to fall into chaos, hence it is of no surprise that the state's intervention in the markets has become unprecedentedly stronger and more pronounced. The second reason for the emergence of Macro Finance is that after 2008, the capital, power and prestige of Wall Street are completely transferred from the sellers to the buyers. To put it simply, those elements moved from the investment banks to the asset management.
There is too much money in Macro Finance, and retaining the money is an issue.
Macro Finance is therefore a risk control problem, and it concerns only the control of buyers' risk. This means that in the new world, there should be new measures and a policy support system to match. To understand the future situation, it would be necessary to pay attention on the core matters, which are identifying situations and carrying out situational analysis. Presently, the situation is too complicated. In order to bring clarity to situations, the focus should be on the environment, society, regulation, economic history and technical history. These are the keys to ensuring that the general direction is on track. Regardless what country it is, there should be consistency between the state and the government, and the same is true for the capital market as well. This is what Macro Finance really is.
Final analysis conclusion:
Classic economic theories are now obsolete. The harsh realities of the real world under Macro Finance is either overtaking others or being overtaken. In this time and age, it is more important to not fall into financial traps than earning profits. There are now increasing amounts of passive investors in the global markets, as the governments welcome passive investors to maintain the status quo. Ultimately, the key and fundamental logic of Macro Finance is to maintain consistency with the governments.