THE ALTKUZNETS RESOLUTION TO WARS

 

 The AltKuznets Resolution to Wars

Prasad Rao, PhD

Director

 

 

Disclaimer

AltKuznets is a Sustainability Advisory & Consulting firm. By the nature of its business, it must confront issues that are socially-abhorrent, Sovereign-sensitive & Biz-risky. Its designs, in such contexts, are limited by various constraints, whether political, diplomatic or financial. These designs are meant to be tentative & exploratory, and seeking of public reactions and interests. AltKuznets does not intend to manipulate Financial markets or exacerbate War risks & its fallouts. It’ll not be responsible or obligated to any public or private entity, in any manner whatsoever, for any unintended impacts or outcomes, for any reason.

  

Wars are as common as droughts. And there have been many over the decades and centuries. The causes that underlie Wars are varied. Though Territorial Wars are the most common, Wars have been fought over Religious hatred, Natural Resources – rights to Land, Water & Minerals, exacerbations of Competition in the global Nominal economy, Trade Passage rights, Political conflicts, even Racial/Parochial superiority. Contemporary Wars that extend over Land and Oceans, often have far-reaching impacts on neighbouring and distant economies. These externalities are both pecuniary and non-pecuniary and affect Trade, Migration, Aviation, and Exchange rates beyond Diplomatic ties. Wars cause lasting, even irreparable damage to the economies of one or both sides, dampen financial markets and damage societies across generations, often irreparably. Though Diplomacy, whether bilateral or if mediated by the UN, could obtain a truce, their records are patchy at best. Alternative War resolutions are the need of the day.

AltKuznets offers a finance-mediated strategy with potential to resolve many, if not all Wars. Our Strategy leverages a Sponsor group that issues an ‘Armament Private War Collateral-Space Public FV Gold’, that on application of an OE Fractal, obtains transferable Peace Equities in proportion global NGDP growth. These Peace Equities could be issued privately to the group of Armament firms in proportion a variable constructed from the Global Armament Technology Hierarchical Rank, GATHR--weighted aggregate Sales. All else equal, the GATHR index would reward frontier Armament firms with more Peace Equities that Firms that sell ammunition and other low-sophistication armament. Armament Firms could issue a variable share of their transferable Peace Equity stash to favoured Sovereign nations or other entities. A tranche of Equities, in the mirror of that issued the Armament firms, could be placed in the Global Commons of Sovereign Nations. In turn, Sovereign entities could have the Administrator re-direct those public Peace Equity shares to inimical Nations or Terrorist Entities.  

AltKuznets, realizing the ethical conflicts involved in pricing and trading these Peace Equities in the markets by their Sales & Revenue Growth, suggests a strategy that outwardly mimics the market, but which radically differs in how the EPS & PE – multiplicative components of the price of Peace Equities - are computed. Our Strategy, motivated by an intent to reveal and attenuate War risks, proposes Deemed EPS, DEPS, & Deemed PE, DPE, as substitutes for EPS & PE. These components are computed with a lag and made available publicly. Whereas the DEPS would fall in the price of War Hedges (traded at the ‘NGDP Bond Mirror-Bullion Mirror ZS’ on such variables as Political Divergence, Religious Divergence, GDP & FX differentials, & Terrorism Participation Index), in the lagged Price of Gold and its inflation in recent periods, the DPE would relate to many variables, but principally correlate with Terrorism Participation Index, TPI, (0 Bad; 10 Good) and with the length of period characterized by absence of military hostilities, PEACEYR. Thus conceived, the Price of War Hedges, that rise with the probability of War, would cause Gold prices to inflate, and induce both, the DEPS & DPE to fall. Prices of Peace Equities would fall dramatically, revealing regional war risks. Peace Equities, issued as globally transferable & tradable Equities, would trade at various regional discounts reflecting the price of regional War Hedges. Income Funds, that trade for EPS, would short Peace Equities in anticipation, as would Wealth Funds that seek robust PE. Income Funds would seek Peace Equities in those regions where DEPS rose with falling War risks. Wealth Funds would seek Peace Equities from those Sovereign nations characterized by multi-decadal Peace and high TPIs. Our strategy also offers Sovereign & Armament firms the tantalizing opportunity to convert their Peace Equities to Space Sector IPO Precinct Follow Equities, albeit post a War-free decade characterized by rising DEPS & DPE.

Our Market-based Strategy leverages the anticipation of the Bullion Hedge and the foresight of the NGDP Bond to price Peace Equities ahead of Sovereign War intrigue, and thus not only issues a signal to the financial markets, but also an opportunity to resolve irritants and attenuate War risks. It offers Armament firms and Sovereign entities a significant ‘Space incentive’ to seek risk-averting policies & strategies, thus attenuating War risks globally. 

The complexity of the global markets, in particular the various financial strategies extending to Derivatives, complicates easy & simple predictions, and poses a risk to intended outcomes. However,  the conception could be modified and upgraded toward a robust strategy that obtains Global Peace and a pareto Space economy.

AltKuznets has applied for a copyright (4803/2023-CO/L) for this Finance-based Strategy.