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10-04-2012, 06:29 AM   #1
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Why Polish people are smarter than their government, the EU and the IMF — and the US

–Why Polish people are smarter than their government, the EU and the IMF — and the American people
Enjoy.........


10-04-2012, 06:57 AM   #2
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If this argument is sound, couldn't someone rely on it to make a case for the independence of, say, Montana? Montana could adopt a new currency and devalue it at will...
Euro-bashing is trendy these days, but I still think the Euro is the only long term solution for Europe's competitiveness in a global economy. It makes sense to play the devaluation game to stimulate your exports when you compete with strong neighbors such as Germany and the Scandinavian countries (which aren't doing bad, either), especially in an economic crisis, when everyone's running to their boats. But that's a vision that looks at local competition. Future competition will be global, and one can't devalue enough one's own currency to put up with the Chinese.
10-04-2012, 07:06 AM   #3
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QuoteOriginally posted by causey Quote
If this argument is sound, couldn't someone rely on it to make a case for the independence of, say, Montana? Montana could adopt a new currency and devalue it at will...
Euro-bashing is trendy these days, but I still think the Euro is the only long term solution for Europe's competitiveness in a global economy. It makes sense to play the devaluation game to stimulate your exports when you compete with strong neighbors such as Germany and the Scandinavian countries (which aren't doing bad, either), especially in an economic crisis. But that's a vision that looks at local competition. Future competition will be global, and one can't devalue enough one's own currency to put up with the Chinese.
Our banking system is completely different the the "Euro way"......... UNLESS it becomes the US-of Europe.. no the Euro can't do the job......
They have an even worse hybrid system than the US..and the Fed . Res.

Yes Montana could do that BUT our Fed fiat system is to their advantage more so than a "sovereign Montana" currency would be.. Fed could "bail them out" in a heartbeat as long as they used US dollars..

HR2990 explains the better system and what EU can't do based on their private constraints.............

AND:
http://www.nytimes.com/2012/10/04/business/global/daily-euro-zone-watch.html

QuoteQuote:
There is good reason to bash the euro when it is tied to private banks and the IMF..........
The central bank meeting on Thursday comes as Spain, which is battling to meet demands for fiscal consolidation during a devastating recession, is thought to be preparing to ask its European partners for a bailout. Prime Minister Mariano Rajoy said Wednesday that no bailout request was imminent.

The president of Cyprus, another troubled euro zone economy, said Wednesday that he would not accept a bailout from the troika of international lenders that has already bailed out Greece, Portugal and Ireland, unless the terms of the aid package were improved.
you are now at the mercy of private banks dictating what you ,as a nation, can and can't do.. This is NEVER a good thing.
10-04-2012, 07:23 AM   #4
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QuoteOriginally posted by jeffkrol Quote
Yes Montana could do that BUT our Fed fiat system is to their advantage more so than a "sovereign Montana" currency would be.. Fed could "bail them out" in a heartbeat as long as they used US dollars...
You mean, like Greece is getting bailed out by the EU? The sovereignty argument is regressive: I can think of sovereign cities, etc.
But in the end, larger, better integrated market systems will be more competitive. The U.S. itself is a good example in this respect. The reasons why the Eurozone is not as effective a system (and it might never be) are non-economic, and concern the ways in which people see their identities within Nation States.

Consider, for instance, how we look at the European countries when making an argument: Poles vs. others. Try to think in terms of Alabama vs. others, and we might need to 'equalize' your conclusions, for the sake of consistency.
The answer to the question as to the independence of states (and, indirectly, of market systems) from the whims of the banks is not devaluation, but tighter bank regulation. Devaluation may be an adequate short term tool in various circumstance, but it's not going to assure independence from the craziness of the financial sector. (Rather, one copes with the effects of such craziness by devaluing one's currency. And there are serious costs of a significant devaluation. Ask a few Argentinians.)


Last edited by causey; 10-04-2012 at 07:39 AM.
10-04-2012, 09:28 AM   #5
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QuoteOriginally posted by causey Quote
You mean, like Greece is getting bailed out by the EU? The sovereignty argument is regressive: I can think of sovereign cities, etc.
But in the end, larger, better integrated market systems will be more competitive. The U.S. itself is a good example in this respect. The reasons why the Eurozone is not as effective a system (and it might never be) are non-economic, and concern the ways in which people see their identities within Nation States.

Consider, for instance, how we look at the European countries when making an argument: Poles vs. others. Try to think in terms of Alabama vs. others, and we might need to 'equalize' your conclusions, for the sake of consistency.
The answer to the question as to the independence of states (and, indirectly, of market systems) from the whims of the banks is not devaluation, but tighter bank regulation. Devaluation may be an adequate short term tool in various circumstance, but it's not going to assure independence from the craziness of the financial sector. (Rather, one copes with the effects of such craziness by devaluing one's currency. And there are serious costs of a significant devaluation. Ask a few Argentinians.)
No, your missing the SIGNIFICANT difference between US and the Euro..

QuoteQuote:
The ECB (unlike the Federal Reserve in the United States of America) does not have a second objective to sustain growth and employment.
QuoteQuote:
According to a study on this question, it has "significantly reshaped the European financial system, especially with respect to the securities markets [...] However, the real and policy barriers to integration in the retail and corporate banking sectors remain significant, even if the wholesale end of banking has been largely integrated.
QuoteQuote:
According to the Economist Intelligence Unit in 2011, "[I]f the [euro area] is treated as a single entity, its [economic and fiscal] position looks no worse and in some respects, rather better than that of the US or the UK" and the budget deficit for the euro area as a whole is much lower and the euro area's government debt/GDP ratio of 86% in 2010 was about the same level as that of the US. "Moreover," they write, "private-sector indebtedness across the euro area as a whole is markedly lower than in the highly leveraged Anglo-Saxon economies." The authors conclude that the crisis "is as much political as economic" and the result of the fact that the euro area lacks the support of "institutional paraphernalia (and mutual bonds of solidarity) of a state".[
http://www.ft.com/cms/s/0/73710400-cc1c-11e1-aac1-00144feabdc0.html#ixzz28LetFQdU

QuoteQuote:
The restoration of the confidence and cross-border capital flows essential to a well-functioning currency union will depend on the adoption of reforms discussed at the EU summit. Yet the introduction of a banking union will be anything but easy, precisely because of Europe’s deteriorating economic conditions and the mounting disunity of the eurozone financial system.

It is a European Catch-22. To believe the eurozone can be saved, you must be crazy. But if you don’t try to save it, you are no less crazy – which means you must keep believing something mad.
http://www.npr.org/blogs/money/2012/06/04/154282337/the-crisis-in-europe-explained

to put it simply there is not an "Arkansas T-bill"............

See document pg 13-14 for "the answer"...........
http://www.group30.org/images/PDF/ReportPDFs/OP64.pdf

Last edited by jeffkrol; 10-04-2012 at 09:45 AM.
10-04-2012, 10:54 AM   #6
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QuoteOriginally posted by jeffkrol Quote
No, your missing the SIGNIFICANT difference between US and the Euro..

QuoteQuote:
The ECB (unlike the Federal Reserve in the United States of America) does not have a second objective to sustain growth and employment.
And couldn't this be seen as--or turned into--an argument for better integration in the Eurozone? Namely, that ECB should be given powers similar to those of the Federal Reserve? There's nothing in these bits of texts that affects my argument. The difference btw. ECB and the Fed is contingent. In different circumstances they could be much more similar. Unless you want to say that having a sovereign currency is wise in certain circumstances, although not all the time.

Anyway, it's tiring for me to follow all these quotations you give... Plus, I feel as if you're not talking to me, so...
10-04-2012, 11:50 AM   #7
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QuoteOriginally posted by causey Quote
And couldn't this be seen as--or turned into--an argument for better integration in the Eurozone? Namely, that ECB should be given powers similar to those of the Federal Reserve? There's nothing in these bits of texts that affects my argument. The difference btw. ECB and the Fed is contingent. In different circumstances they could be much more similar. Unless you want to say that having a sovereign currency is wise in certain circumstances, although not all the time.

Anyway, it's tiring for me to follow all these quotations you give... Plus, I feel as if you're not talking to me, so...
I am talking to you.. just using "other peoples words' ..it is expedient...........

IF you actually think europe could form a political "unit" exactly like the US (w/ individual countries basically becoming just "states".. YES the Euro could be "saved".......
The political battle to form this "more perfect union" is equiv to Atlas pushing the boulder up a hill...

If you read HR2990 and understand how hard THAT would be to "sell" in the US .. it is equiv to "selling" the US system to Europe..................

In summary HR2990 forms a better system.. US system is good.. EU not so good.............. as to the most good for the "people".....

The Euro system contains a serious design flaw

The Euro system contains a serious design flaw | Credit Writedowns
QuoteQuote:

In order to preserve the “Union,” the ECB must recognize that the member governments are neither responsible for the debt crisis nor capable of resolving it. The ECB must recognize the design flaw in the Euro system and, like Toyota, inform its users that it will take corrective measures to fix it. My good friend Warren Mosler – an expert in financial markets – has pointed out that it took 10 years for most analysts to discover the flaw in the Euro system but that it would take the ECB only 10 minutes to correct it.

The fundamental problem is that member nations have no safe funding mechanism under the existing system. To fix the problem, the ECB should create the euros that its member governments, as USERS of the currency, cannot. It would do this simply by crediting bank accounts, just like the Federal Reserve does when it transfers money to cash-strapped states in the wake of a national disaster. The funds could go directly into the member governments’ accounts, or they could be routed through the European Parliament, which could distribute them on a per-capita basis to all seventeen members of the Eurozone. Because these are transfer payments – not loans – the ECB would not seek repayment. A back-of-the-envelope calculation suggests that an annual distribution of about 10 percent of Euroland GDP would be sufficient to eliminate the funding risk, reduce borrowing costs, permit the repayment of debt and help to restore growth.

If the ECB refuses to create a safe funding mechanism for its member nations, then there may be no alternative but to abandon the euro and return to the more conventional “One Nation, One Money” arrangement.

DM: Why is currency sovereignty so important?

SK: Because without it you are merely the USER of the currency, no different from an individual state in the US. You have no independent monetary policy and very little control over your budget. You are at the mercy of financial markets, and your only hope is that some other source of demand will emerge and drag you out of the trenches.
whats broke .. how to fix it........... simple yet not simple..... politically

Last edited by jeffkrol; 10-04-2012 at 12:06 PM.
10-04-2012, 01:24 PM   #8
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QuoteOriginally posted by jeffkrol Quote
I am talking to you.. just using "other peoples words' ..it is expedient...........

IF you actually think europe could form a political "unit" exactly like the US (w/ individual countries basically becoming just "states".. YES the Euro could be "saved".......
A better integration is the only solution for the peoples of Europe in the long run. There's no alternative. Even if the Euro collapses now---which I don't think will happen, in spite of the British predictions--talk of a common currency will begin anew. I don't know whether a political unit exactly like the US is feasible; but I can't see how less unity (monetary, and, so political) is going to be better for anyone a few years from now. And yes, ECB should have many more powers than it has now.

10-04-2012, 02:27 PM   #9
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QuoteOriginally posted by causey Quote
A better integration is the only solution for the peoples of Europe in the long run. There's no alternative. Even if the Euro collapses now---which I don't think will happen, in spite of the British predictions--talk of a common currency will begin anew. I don't know whether a political unit exactly like the US is feasible; but I can't see how less unity (monetary, and, so political) is going to be better for anyone a few years from now. And yes, ECB should have many more powers than it has now.
Historically speaking.. the separate currencies seemed to work fine (in retrospect to current conditions) .. The "new currency" seemed to help the haves (i.e. Germany) at the expense of the have nots (i.e Greece) disproportionately.........

German "exports" being in effect subsidized by the common Euro....

QuoteQuote:
Germany is an exceptional case of course, and if we look beyond the country’s significantly short term growth figure, the reasons why are fairly obvious. It is a country that has built up a fabulous reputation for providing the highest standards of engineered goods.

Naturally, these exported goods are made more and more attractive the weaker the euro gets and the cheaper they become. Germans may moan about being part of a monetary union with the bankrupt Greeks and the rest of the periphery, but you could argue (and you’d be right) that the biggest beneficiary of the single currency is in fact Germany.
Currency Watch: German exporters toasting euro weakness

more;
How to run the euro: Fixing Europe's single currency | The Economist

And a correction: Technically there are State bonds like... say... a Greek bond..
10-04-2012, 02:46 PM   #10
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Subsidized? Germans are competitive, that's all. Greeks (and others) need to be more like the Germans. Devaluation is a short term trick--it won't change anything in a culture that's responsible for lack of competitiveness. That is to say, Greeks won't properly speaking become competitive if they resort to the Drachma. Greece will become attractive to foreign investment, but not thanks to the competitive quality of the Greeks.

I'm a Romanian; I know a bit about tax evasion and corruption in that part of the world. I'm glad my country signed the Fiscal Stability Agreement (although the Treaty itself is far from being sufficient).
10-04-2012, 03:02 PM   #11
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QuoteOriginally posted by causey Quote
Subsidized? Germans are competitive, that's all. Greeks (and others) need to be more like the Germans. Devaluation is a short term trick--it won't change anything in a culture that's responsible for lack of competitiveness.
The devaluation the Germans have exploited through the Euro is a long term trick. The Chinese have kept that trick up for quite a while as well.

Nonetheless, I agree that the Germans have a lot of other things going for them. The number one thing is that they make products the world wants and needs, and do so efficiently. The Greeks work a lot more, (40% more than the Germans) but manage to produce less. BBC News - Are Greeks the hardest workers in Europe? I'm not sure that being more like the Germans is something that one just chooses. It requires skill, technology and investment.
10-04-2012, 03:09 PM   #12
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QuoteOriginally posted by GeneV Quote
The devaluation the Germans have exploited through the Euro is a long term trick. The Chinese have kept that trick up for quite a while as well.
I don't understand: the devaluation of what? They haven't devalued the Euro, and if they did, they did it for all, not only for themselves...

As for the Greeks working more... I know, Romanians work even more--some of them actually do, but most of them are absolutely unproductive. "Work" isn't the key word; "productivity" is. "Work" can mean sleeping in a chair, in an office.

My wife is working for the World Bank, and now she's in a program aimed at helping the Kuwaiti government privatize a few State-owned enterprises. Pretty much everything is State-owned in Kuwait. They have a filthy rich country (oil!) and horrible services. The World Bank offers the government various solutions, but, invariably, those solutions involve firing a number of Kuwaiti citizens, which goes against the principles of the State. (My wife tells me that it's a common practice in Kuwait not to show up for work a few weeks, even months, in a row, because you still get your money.) The government literally subsidizes the citizens. This is not sustainable, and they are slowly coming to realize it. Now, are Kuwaitis productive? No. If wells dried out tomorrow, they'll be very poor in very few years. Most of them are incompetent, have no skills etc. Do they work? You bet! Statistics indicate they work a lot.

The situation is different in Romania, where the economy is not yet open to a market integration. The Romanian economy still inherits something of the Socialist planned integration. There are factories in which people actually work to produce stuff nobody needs. The State can't just lay out thousand of workers at once... In other cases, our officials have qualms about privatizing a certain State company X, which survives on subsidies, because another company depends on a by-product of X... And so on...

Last edited by causey; 10-04-2012 at 03:35 PM.
10-04-2012, 03:13 PM   #13
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And don't forget that the Germans have bailed the weaker financial states in Europe out of trouble a good few times.

One thing I think non-europeans find hard to grasp is why the euro largely is there - to prevent yet another one of the catastrophic wars we've had going on for best part of the last millennia and to bind us together as a cohesive financial whole to be able to stand up to the US, China and soon India. I personally feel very strongly that the UK is making a huge mistake by distancing ourselves from our immediate neighbours in favour of the US who, lets face it, have never done anything for us which hasn't directly benefitted themselves financially or in taking control of large swathes of territory. Still, few months more and I'll be living in Berlin and enjoying the security of the eurozone as I sadly watch the UK slip into poverty and decay.
10-04-2012, 03:19 PM   #14
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QuoteOriginally posted by GeneV Quote
I'm not sure that being more like the Germans is something that one just chooses. It requires skill, technology and investment.
You're right. It's not something that one just chooses. As I suggested, it's a matter of culture. (Technology and capital, like political leadership, are the products of certain practices, and not of others.) But changes in culture can be initiated if there is sufficient political will in a population.

Last edited by causey; 10-04-2012 at 03:38 PM.
10-04-2012, 03:50 PM   #15
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QuoteOriginally posted by causey Quote
You're right. It's not something that one just chooses. As I suggested, it's a matter of culture. (Technology and capital, like political leadership, are the products of certain practices, and not of others.) But changes in culture can be initiated if there is sufficient political will in a population.
Well now we are back to the "moral" vs "economic" debate... and yes Kuwait is a "welfare state" who hires (and deports) real workers when it needs them..... caring little for the welfare of non-citizens...

No party, citizen or US political ideology supports a Kuwait type "culture"....... IF you are implying "medicare for all" type programs lead to this , I believe that is a big mistake.. You seem to be proposing the old "stick" method of "if they are starving they will take any job, no matter how poor it is"............... and that is a reverse spiral to what you seem to imply.. You may believe "entitlements" wil spiral down creativity but the reverse.. working for nothing but subsistence will lead to social collapse and is CERTAINLY not conductive to a "Christian" or "Moral" society based on shared sacrifice and resources.. It is just primitive and what we "crawled out of the swamps" to stop.........

more on Germany:
http://online.wsj.com/article/SB10000872396390443545504577563224125222192.html
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