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| If It's Idiot Season, Why Can't I Shoot Them? (Eu in forum [Market-Ticker]
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Crzymorse
Posts: 1189
Incept: 2010-06-25
Maryland
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Italian demographics don't support this article or the Euroland for that matter. But I have a sense that a coordinated rotational devaluation; Japan, USA, Europe is in play.
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Genesis
Posts: 130699
Incept: 2007-06-26
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The problem with such a move is that it doesn't DO anything.
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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
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Crzymorse
Posts: 1189
Incept: 2010-06-25
Maryland
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A global monkey ****.
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Savingsaretheway
Posts: 118
Incept: 2011-12-16
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Everyone seems so focused on the risk of a collapse of a major French or German bank that they seem to be oblivious to the ultimate tail risk pertaining to an abrupt and disorderly collapse of the European currency itself.
The perception seems to be that as long as a default is averted, the Euro will survive, but it seems to me all this liquidity that is being pumped in with rate cuts and indirect QE to support the sovereign debt is actually accelerating the demise of the Euro, which is recently being reflected in the FX. I do not think the Euro is depreciating. I think it's collapsing.
Unlike the Fed with its ZIRP and QE, the ECB is not working with the world reserve currency and the margin of error that comes with it. They probably could pump enough liquidity into the system to cover the debt of Italy and Spain, but once they're done, the Euro will probably be so devauled that it may as well be done away with.
Also, I believe a declining Euro drives up the dollar funding costs of European banks. Quite the predicament.
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Crzymorse
Posts: 1189
Incept: 2010-06-25
Maryland
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Saving,
The problem with pushing on a water ballon.
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Trades50
Posts: 4214
Incept: 2007-10-30
Land of Tax and Spend
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Quote: How long will it be before we -- and "news organizations" like Bloomberg -- start demanding that the writers of columns in their rags deal with basic arithmetic The readers of the NY Times rag should be asking Krugman this question.
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When the people fear the government, there is tyranny. When the government fears the people, there is liberty. - Thomas Jefferson
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Mannfm11
Posts: 3537
Incept: 2009-02-28
DFW, Tx
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I have watched this go on since they took the gold backing from the dollar and I have never seen it work. Not once. Contrary to popular belief, it isn't working for China. They just need money worse than Americans.
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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
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Drjerry
Posts: 584
Incept: 2007-11-06
Seattle
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What year do they start teaching exponents in schools in USA? I learned in about fifth year (grade). Or is Fed run by eight year olds?
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Mannfm11
Posts: 3537
Incept: 2009-02-28
DFW, Tx
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The Fed is run by bankers. The only concern of bankers is to create inflation,which they keep.
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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
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Leicestersq
Posts: 221
Incept: 2009-10-12
UK
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Devaluing money isnt a bad thing if you are a deficit nation, especially if you have unemployment and low inflation, and a trading partner that doesnt want to do anything other than run a surplus. You can print money, use it to put people to work. The people will use a lot of that money to buy imports, and you will run a big deficit, but it shouldnt prove to be inflationary as your trading partner wont return the favour, and suck up all that newly printed money. You get their production as well as your own, and they get the inflation.
The problem comes when your trading partner decides that they have had enough of being dumb, and want to let trade balance and consume as much as they produce. Well they owe you a lot of expenditure, and when they start to spend that accumulated surplus, the terms of the trade change, and your prices move up as all that extra demand comes in. At that point, you need to reverse policy, destroy money rather than create, run a government surplus rather than a deficit, allowing people to be employed by export demand rather than government spending.
I never understand why surplus nations want to give so much of the people's labour away. Sure, having a bit of a financial buffer always helps, but for some nations it has become a bit silly how much cash they have. And if they spend it, they end up devaluing that same cash.
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Moog
Posts: 8
Incept: 2010-05-01
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I don't think it's a matter of choosing...
An example: Let's say a guy in Switzerland is in a mood for a new car and he's been eyeing that US made Cadillac. But since Euro has depreciated quite a lot, that Italian made Alfa Romeo has become available for quite attractive price. He then chooses to buy Alfa Romeo instead of Cadillac.
Italy wins, US loses but not by a choice of their own.
This is what happens all the time when currency valuations change.
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Bertdilbert
Posts: 2656
Incept: 2008-12-22
CA
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Quote:Who's going to choose to lose?
Well, let's look at what "lose" means. It means, primarily, larger budget deficits and more debt accumulation. Ok, so who can afford that among those nations who are trading with Europe, and who would volunteer for it?
Not the United States. Not Switzerland. Not Russia. And neither India or China. It would appear that the US has volunteered for quite some time. Congress has shown no desire to change course other than a dog and pony show come deficit ceiling time.
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Dear Euroland: Relax, Germany has a plan for your money!
Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
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Rjazz117
Posts: 17786
Incept: 2007-09-11
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Drjerry wrote..What year do they start teaching exponents in schools in USA? I learned in about fifth year (grade). Or is Fed run by eight year olds? My son is learning exponents now. He's doing 4th grade equivalent work...almost done with it, actually.
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 “To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.” Thomas Jefferson |
Flappingeagle
Posts: 1227
Incept: 2011-04-14
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FX is a zero sum game. What a true statement that is never mentioned when our (and their) politicians talk to boosting exports to help the economy.
I'm to lazy to even try and look this up so I'm hoping one of you knows the answer. The great depression is partially blamed on the Smoot-Hawley Tarriffs. My question is though, since FX worldwide is a zero sum game, is how did the collapse of trade have that big of an effect? The only reason I can come up with off the top of my head is that he same building of excessive debt that is going on now was going on then. When the debt juice was stopped the economies collapsed because they were fueled by debt.
What do you guys know/think?
Flap
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Here are my predictions for everyone to see:
S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu.
"You can't build a house of cards on a shaking table." - Tony Johns
The January 2015 AMZN put at $130 (cost $4.25) will be a winner.
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Mannfm11
Posts: 3537
Incept: 2009-02-28
DFW, Tx
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Whose credit? You can't continue to consume like there is no tomorrow without credit. They will never balance trade by cramming more money of a certain type into the system to devalue. It absolutely doesn't work, because more money is what causes the inbalance in the first place. The Euro is in decline, yet the capacity to consume in Europe is collapsing. It is in decline because the ECB is destroying the currency, more so than Bernanke, by buying junk debt of Italy, Spain, Portugal and Greece. The American trade deficit is made right in NYC and Washington DC. As long as the US economic policy is directed toward keeping consumption at a certain level, keeping government wages high and banking allowing high degrees of credit to consumers, we are going to have a trade deficit. Despite being socialist, there isn't a FSA in China to the degree there is here. Even their medicine is less socialized than ours and as long as health care has a blank check here, demand will exist. I believe Ludwig von Mises knew as much about money as anyone who ever lived. He made a statement that every economy already had as much money as they needed and when an economy has more money than it needs, it goes somewhere else. World wide central banking has allowed for countries to take in dollars, buy US bonds and use the bonds as backing for domestic money around the world. There is no international debt anchor for the yuan, not to the degree that their money supply, which is about $14 trillion, exists. There aren't deep capital markets in China, thus they need dollars to run trade. The idea the Chinese would dump their bonds is ongoing nonsense. Dump them for what? 
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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
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Sushihorn
Posts: 7802
Incept: 2007-10-22
Arlington, TX
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Flapping
What you were taught is a lie, designed to scapegoat a policy the globalists HATE. The US industrial economy rose to world leadership under a heavy tariff barrier. During that incredible boom, the tariff generally varied in the 30-45% range. The tariff increases of 1930 placed the levy at just over 19%. In other words, this supposed killer tariff was roughly have the average during the greatest econmic boom in American history and a third lower than the LOWEST levels of that period.
Smoot-Hawley had little to do with the Great Depression. Keep in mind that the Depression had enveloped most of the world since the EARLY 1920s - long before S-H was ever dreamed up. The US was the LAST country to be affected since it was the destination for much of the capital flight that contributed to depression elsewhere. S-H can hardly be blamed for a depression that began a decade earlier in much of the world. It is the coincidence of timing with the arrival of depression in the US ONLY that gave the propagandists the opportunity to blame S-H for the crisis that the credit bubble made inevitable.
Even then, GD 1.0 in the US began in 1929.
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