Perspectives on the global economic changes

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Austin
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Re: Perspectives on the global economic changes

Postby Austin » 27 Aug 2014 10:37

Keiser Report: End of No-Alternative-To-Dollar Era


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Re: Perspectives on the global economic changes

Postby panduranghari » 27 Aug 2014 14:00

Making inane assumptions is not going to help.

Every country in Eurozone has essentially bought shares in ECB based on the amount of dollars and gold they contributed. The amount of shares bought does not make any difference in the running of the ECB. The ECB is run by a mandate which is a part of the Maastricht treaty.

Maastrict Treaty from the original source

ECONOMIC AND MONETARY UNION

The EMU puts the finishing touches to the single market. Economic policy consists of three components. The Member States must ensure coordination of their economic policies, provide for multilateral surveillance of this coordination, and are subject to financial and budgetary discipline. The objective of monetary policy is to create a single currency and to ensure this currency's stability thanks to price stability and respect for the market economy.

The Treaty provides for the establishment of a single currency in three successive stages:
•the first stage, which liberalises the movement of capital, began on 1 January 1990;
•the second stage began on 1 January 1994 and provides for convergence of the Member States' economic policies;
•the third stage should begin by the latest on 1 January 1999 with the creation of a single currency and the establishment of a Central European Bank (CEB).

Monetary policy is based on the European System of Central Banks (ESCB), consisting of the CEB and the national central banks. These institutions are independent of the national and Community political authorities.


No where does it say that the ECB is in the control of France and Germany. That is the line taken by the western press who are clearly in the Anglo-Saxon camp - the same camp we are hate because they have let this massive Ponzi go on for over 44 years.

Capital Subscriptions in % to ECB from here

Nationale Bank van België/Banque Nationale de Belgique (Belgium)
2.4778% 268,222,025.17

Deutsche Bundesbank (Germany)
17.9973 1,948,208,997.34

Eesti Pank (Estonia)
0.1928 20,870,613.63

Central Bank of Ireland (Ireland)
1.1607 125,645,857.06

Bank of Greece (Greece)
2.0332 220,094,043.74

Banco de España (Spain)
8.8409 957,028,050.02

Banque de France (France)
14.1792 1,534,899,402.41

Banca d'Italia (Italy)
12.3108 1,332,644,970.33

Central Bank of Cyprus (Cyprus)
0.1513 16,378,235.70

Latvijas Banka (Latvia)
0.2821 30,537,344.94

Banque centrale du Luxembourg (Luxembourg)
0.2030 21,974,764.35

Central Bank of Malta (Malta)
0.0648 7,014,604.58

De Nederlandsche Bank (The Netherlands)
4.0035 433,379,158.03

Oesterreichische Nationalbank (Austria)
1.9631 212,505,713.78

Banco de Portugal (Portugal)
1.7434 188,723,173.25

Banka Slovenije (Slovenia)
0.3455 37,400,399.43

Národná banka Slovenska (Slovakia)
0.7725 83,623,179.61

Suomen Pankki – Finlands Bank (Finland)
1.2564 136,005,388.82

Total1
69.9783 7,575,155,922.19


The important bit from
http://www.ecb.europa.eu/ecb/legal/pdf/en_article_5.pdf

The Protocol on the Statute of the European System of Central Banks and of the European Central Bank shall be amended in accordance with the provisions of this Article.
In Article 10, the following paragraph shall be added:
‘10.6 Article 10.2 may be amended by the Council meeting in the composition of the Heads of State or Government, acting unanimously either on a recommendation from the ECB and after consulting the European Parliament and the Commission, or on a recommendation from the Commission and after consulting the European Parliament and the ECB. The Council shall recommend such amendments to the Member States for adoption. These amendments shall enter into force after having been ratified by all the Member States in accordance with their respective constitutional requirements.
A recommendation made by the ECB under this paragraph shall require a decision by the Governing Council acting unanimously


So no where can you PROVE that ECB is controlled by France and Germany.

I said this before and I say it again - ECB has one mandate - to maintain price stability within Eurozone thus keeping inflation below 2% (even 2% inflation every year will reduce the purchasing power to half in 20 years).

Compared to this most other central banks have 2 objectives- the maintain inflation below 2% every year and increase the growth of the economy by all means including increasing jobs. These 2 objectives are like fair weather friends. They become mutually antagonistic in times of turmoil as seen evidently in the west and in many countries in the east.

Again take all this for what its worth.

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Re: Perspectives on the global economic changes

Postby Neshant » 27 Aug 2014 18:31

For all practical purposes, the ecb and euro is the creation of Germany and France. You are wasting your time reading through what the treaty says and does not say. The fact is that in 1 week in 2008, the ecb printed up and currency swapped trillions with the Federal Reserve practically overnight when over leveraged German and French banks ran out of dollar liquidity.

When Greek banks could not repay German banks, a whole lot of so called "stimulus" was launched to make that money appear out of thin air.

The reality is the ecb is controlled by Germany and France no matter what claims of independence is made.

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Re: Perspectives on the global economic changes

Postby panduranghari » 27 Aug 2014 20:21

Make claims with proof. No proof, I will say your claim is BS or even horse manure. If tomorrow the legal tender decree changes and the government says- you shall use cow dung as currency - it becomes so. Because its set in law. Now some may dislike modern law. Then there is common law for you. Don't like that one - there we can use manusmriti. The whole point of this circlejerk argument is - without law the society cannot evolve. And law makes things as they are. Its not a law(treaty) between 2 individuals here nor 2 sovereign nations. Its a law made for Europeans by Europeans. Yes they will **** each other in trying to get their national interests protected. And they have been doing this for a few centuries. That alone was the reason why a few people half a century ago decided enough is enough. That's why they brought a currency system to life which is far different than we as humans are used to. Our collective thinking (helped in no less means by the stupid media) has muddled the whole idea of what a financial system is meant to do.

I, as stated before too, am not here to educate you or anyone. I am giving you a perspective as I see it. And I don't buy into the argument that all central bankers are a bunch of buffoons. Every damned central banker from Bernanke of US to Gideon Gono of Zimbabwe gets it. And only if we can see what they can, our life would be so much better.

There are some incredible resources out there where if you just look, you can start peeking into the minds of central bankers. Its worth the time as time is money and it will save you a lot of money in the long term.

I want you to at least give some proof of your assertion that France-Germany control ECB.

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Re: Perspectives on the global economic changes

Postby svinayak » 28 Aug 2014 04:20

History of unconventional Fed policies
* MBS reinvestment program and Maturity Extension Program (“Operation Twist”) are not net additions to size of Fed’s balance sheet.
** Tentative October conclusion.
Source: Federal Reserve Board and BofAML Global Economics Research.
    Program Announced First Purchase Last Purchase Total Amount
    Quantitative Easing 1 (MBS) 25-Nov-2008 05-Dec-2008 24-Mar-2010 $1450 bn
    Quantitative Easing 1 (Treasuries) 18-Mar-2009 25-Mar-2009 29-Oct-2009 $300 bn
    Reinvest MBS* 10-Aug-2010 17-Aug-2010 on-going
    Quantitative Easing 2 (Treasuries) 03-Nov-2010 08-Nov-2010 30-Jun-2011 $600 bn
    Operation Twist* 21-Sep-2011 03-Oct-2011 29-Jun-2012 $400 bn
    Extend Operation Twist* 20-Jun-2012 02-Jul-2012 31-Dec-2012 $267 bn
    Quantitative Easing 3 (MBS) 13-Sep-2012 14-Sep-2012 ** $843 bn (E) **
    Quantitative Easing 3 (Treasuries) 12-Dec-2012 03-Jan-2013 ** $805 bn (E) **

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Re: Perspectives on the global economic changes

Postby Neshant » 28 Aug 2014 06:03

panduranghari wrote:Make claims with proof. No proof,


I already provided the proof. Trillions of printed up "credit" was swapped between the Federal Reserve and ECB in 1 week in 2008. This is fact not fiction admitted by the Federal Reserve itself. The Greek debt problem was solved through printing aka "stimulus" primarily for the benefit of German banks to whom the Greece govt was owed money.

When it serves the interest of Germany or France, the printing presses at the "independent" ECB magically roll. Just as the printing presses roll when the private banks behind the Federal Reserve need to transfer their losses to the public.

Because its set in law. Now some may dislike modern law.


There is nothing set in law. The whole purpose of paper currency, secrecy and central banking crooks is to subvert any concept of merit and promote crony capitalism.

There is no way France or Germany would ever join a central banking committee unless they had control over the printing press. ECB and other fancy sounding "independent" boards are just there to fool suckers.

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Re: Perspectives on the global economic changes

Postby Yagnasri » 28 Aug 2014 09:08

Gold as currency gurus. That may be the saving thing of non gora nations.

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Re: Perspectives on the global economic changes

Postby panduranghari » 29 Aug 2014 15:32

Neshant wrote: The whole purpose of paper currency, secrecy and central banking crooks is to subvert any concept of merit and promote crony capitalism.


Was it always that way though- crony capitalism?

And without paper currency, how will you satisfy the 'double coincidence of wants'?

Do you really think, the central bankers of eastern countries are doing what they do happily?

Please read this Gideon Gono interview- he is the central banker of Zimbabwe where they printed this-
Image

Your critics blame your monetary policies for Zimbabwe's economic problems. I've been condemned by traditional economists who said that printing money is responsible for inflation. Out of the necessity to exist, to ensure my people survive, I had to find myself printing money. I found myself doing extraordinary things that aren't in the textbooks. Then the IMF asked the U.S. to please print money. I began to see the whole world now in a mode of practicing what they have been saying I should not. I decided that God had been on my side and had come to vindicate me.


Laghav Nyaaya states Never attribute to malice that which is adequately explained by stupidity.

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Re: Perspectives on the global economic changes

Postby Austin » 30 Aug 2014 09:09


Neshant
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Re: Perspectives on the global economic changes

Postby Neshant » 31 Aug 2014 02:44

I notice western countries are trying to provoke Russia on every front - UK especially. Its almost as if they would lose their role as US front man in Europe if they didn't come up with some common enemy to jointly 'fight'. Kind of like a Pakistan.

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Re: Perspectives on the global economic changes

Postby panduranghari » 31 Aug 2014 12:55

UK...is London. And they call London the financial capital of the world based on Ponzi economics.

This chart would be of interest to all here. Perhaps relevant from Indian economic perspective too.

Image

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Re: Perspectives on the global economic changes

Postby panduranghari » 31 Aug 2014 13:23

Now central banks are trading Futures contracts? WTF. Seems retail investors have already left the markets.

Image

Is it because of this?

Shanghai Gold exchange offers futures contracts denominated in Yuan settled in physical gold from next month

The gold contract will be priced and settled in yuan and the infrastructure is in place for trading to start in the third quarter, Xu said in June. The zone will have a vault capable of holding 1,500 metric tons of gold, which can either be imported into China or be in transit to other markets, Xu said.


Effing UPA and MMS govt - Only if we have negotiated hard and got the BRICS bank in India. I hope the puppet and his puppet master goes to jail for crimes against iNDIA

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Re: Perspectives on the global economic changes

Postby Neshant » 31 Aug 2014 13:30

After the LIBOR and EURIBOR rigging came to light with the collusion of the govt itself in the scam, nobody trusts these financial centers anymore when it comes to pricing. Inevitably they play around with the numbers behind the scenes to profit from it.

How many untold hundreds of billions of dollars have flowed into the pockets of those perpetrating this scam is deliberately obscured.

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Re: Perspectives on the global economic changes

Postby Austin » 31 Aug 2014 16:48

Found a write up on high internal debt of Japan and its consequences

Sovereign Debt: Eroding Japan’s National Security

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Re: Perspectives on the global economic changes

Postby Neshant » 02 Sep 2014 06:02


svinayak
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Re: Perspectives on the global economic changes

Postby svinayak » 02 Sep 2014 10:41

Japan's strategy is to try to buffer a sagging economy by printing unlimited Yen, converting it as quickly into much more credible U.S. Dollars and buying interest yielding U.S. treasury notes (created from U.S. quantitative easing). The U.S. encouraged such purchases by Japan and China when the U.S. economy was in a rut, but as the Federal Reserve puts an ax on quantitative easing, the cost to Japan for buying U.S. treasury notes is increasing, which means Kuroda is forced to print even more Yen, further devaluing the Yen. A similar strategy worked for the Weimar Republic, but only temporarily. Fortunately for trees, most of the money printing is in the digital form.

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Re: Perspectives on the global economic changes

Postby Neshant » 02 Sep 2014 11:13


svinayak
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Re: Perspectives on the global economic changes

Postby svinayak » 02 Sep 2014 11:39

Basically the central banks have been creating credit in the form of money and lending the money as loan
The Proof That Banks Create Money

More than 97% of all the money in the economy exists as bank deposits – and banks create these deposits simply by making loans. When people first hear this, they often find it hard to believe. But we don’t want you to take our word for it. The following papers and videos from the Bank of England explain how money is created by commercial banks:

“Where does money come from? In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood. The principal way in which they are created is through commercial banks making loans: whenever a bank makes a loan, it creates a deposit in the borrower’s bank account, thereby creating new money. This description of how money is created differs from the story found in some economics textbooks.” (Bank of England)

Banks aren’t Middlemen between Savers and Borrowers:
There is a common idea – even taught in many economics textbooks and academic papers – that banks are simply middlemen (‘intermediaries’) between savers and borrowers. But this is inaccurate. As the Bank of England describes:

“One common misconception is that banks act simply as intermediaries, lending out the deposits that savers place with them. In this view deposits are typically ‘created’ by the saving decisions of households, and banks then ‘lend out’ those existing deposits to borrowers, for example to companies looking to finance investment or individuals wanting to purchase houses.

“In fact, when households choose to save more money in bank accounts, those deposits come simply at the expense of deposits that would have otherwise gone to companies in payment for goods and services. Saving does not by itself increase the deposits or ‘funds available’ for banks to lend. Indeed, viewing banks simply as intermediaries ignores the fact that, in reality in the modern economy, commercial banks are the creators of deposit money. This article explains how, rather than banks lending out deposits that are placed with them, the act of lending creates deposits — the reverse of the sequence typically described in textbooks.(3)” (Bank of England, Money Creation in the Modern Economy)

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Re: Perspectives on the global economic changes

Postby SK Mody » 02 Sep 2014 16:43

Just found this interesting news site. Has lots of good factoids that could be useful.

http://qz.com/india/

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Re: Perspectives on the global economic changes

Postby svinayak » 02 Sep 2014 19:30

Similar to previous post

The New Depression with Richard Duncan
https://www.youtube.com/watch?v=bal13KPrzTo
Richard seems to think that US will follow Japan and create a deflationary economy and create stagnation

But US economy is the largest in the world and this will collapse the global trading system.
This was never anticipated by the elite when they went on this path.

this is a catch 22 situation

Speech: How Capitalism Died & Where That Leaves Us
http://vimeo.com/user20236372/review/10 ... 54bf993e5d

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Re: Perspectives on the global economic changes

Postby Neshant » 03 Sep 2014 08:20


Austin
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Re: Perspectives on the global economic changes

Postby Austin » 03 Sep 2014 15:36

The Global Competitiveness Report 2014–2015

http://www3.weforum.org/docs/WEF_Global ... 014-15.pdf

Among BRICS Nation Ranking

Brazil 57
Russia 53
India 71
China 28
S Africa 56

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Re: Perspectives on the global economic changes

Postby SK Mody » 04 Sep 2014 01:48

Neshant, Vinayak, Thanks for the very interesting videos.

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Re: Perspectives on the global economic changes

Postby Austin » 04 Sep 2014 13:22

Neshant wrote:


Ok he says that Debt in US can go on to a very high level citing Japan as an example with Debt 250 % of GDP. He cites politics is preventing it.

So what is wrong for US or for that matter any other country in the world to zoom your debt to Japans level i.e 230 % of GDP after all we have Japan as an example ?

He ends up by saying invest 1 Trillion each in xyz program and cites Manhattan project and US Military Dominance in the world as Money Well Spent by Government .....I wonder if he is some supporter of MIC ?

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Re: Perspectives on the global economic changes

Postby panduranghari » 04 Sep 2014 17:42

Just Another Hyperinflation

Deflation OR Hyperinflation

Everything you wanted to ask but did not know whom to, every doubt you had but had no clear understanding of the cause of the doubt will be cleared after reading those 2 posts. Please do read it.

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Re: Perspectives on the global economic changes

Postby Austin » 04 Sep 2014 17:44

what is the significance of this move ?

ECB cuts interest rate to new record low of 0.05%

The European Central Bank unexpectedly cut interest rates to 0.05 percent from 0.15 percent in a strong response to combat deflation. The move comes as the EU is struggling to boost its stagnating economy.

The ECB's main refinancing rate has been cut 10 basis points to 0.05 percent, its marginal lending facility was decreased 10 basis points to 0.3 percent, and its deposit facility decreased 10 basis points to stay in negative territory at -0.2 percent.

Mario Draghi announced the bank has trimmed its GDP forecast for the 18-member eurozone to 0.9 percent in 2014 and 1.6 percent in 2015.

Draghi said that the governing council has agreed to use ‘unconventional’ monetary measures if needed, but a shift towards a US-style quantitative easing program was not announced, and will again be discussed at the next meeting on October 2.

The bank has agreed to start buying non-financial assets.

The benchmark refinancing rate is the amount banks pay the ECB for credit, and the lower the rate, the more customers and businesses are incentivized to borrow, spurring lending and growth.

The Frankfurt-based bank has previously discussed injected €175 billion ($240 billion) into the eurozone economy. Reuters has reported the amount could be as large as $500 billion.


Image

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Re: Perspectives on the global economic changes

Postby member_28714 » 04 Sep 2014 17:52

Austin wrote:what is the significance of this move ?

ECB cuts interest rate to new record low of 0.05%

The European Central Bank unexpectedly cut interest rates to 0.05 percent from 0.15 percent in a strong response to combat deflation. The move comes as the EU is struggling to boost its stagnating economy.

The ECB's main refinancing rate has been cut 10 basis points to 0.05 percent, its marginal lending facility was decreased 10 basis points to 0.3 percent, and its deposit facility decreased 10 basis points to stay in negative territory at -0.2 percent.

Mario Draghi announced the bank has trimmed its GDP forecast for the 18-member eurozone to 0.9 percent in 2014 and 1.6 percent in 2015.

Draghi said that the governing council has agreed to use ‘unconventional’ monetary measures if needed, but a shift towards a US-style quantitative easing program was not announced, and will again be discussed at the next meeting on October 2.

The bank has agreed to start buying non-financial assets.

The benchmark refinancing rate is the amount banks pay the ECB for credit, and the lower the rate, the more customers and businesses are incentivized to borrow, spurring lending and growth.

The Frankfurt-based bank has previously discussed injected €175 billion ($240 billion) into the eurozone economy. Reuters has reported the amount could be as large as $500 billion.


Image


1) more free float money for european financial institutions to pump into higher yield markets (interest arbitrage through debt instruments)

2) increased consumption by consumers who can borrow at a lower rate to spend. retail debt is nothing more than a promissory note where the borrower commits to be more productive so as to service the debt. more productivity reflects on macro economics as higher growth. or at least thats what the ecb is hoping for.

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Re: Perspectives on the global economic changes

Postby SK Mody » 04 Sep 2014 18:13

Austin wrote:
Neshant wrote:


Ok he says that Debt in US can go on to a very high level citing Japan as an example with Debt 250 % of GDP. He cites politics is preventing it.

So what is wrong for US or for that matter any other country in the world to zoom your debt to Japans level i.e 230 % of GDP after all we have Japan as an example ?

He ends up by saying invest 1 Trillion each in xyz program and cites Manhattan project and US Military Dominance in the world as Money Well Spent by Government .....I wonder if he is some supporter of MIC ?


What is between the lines is more interesting than his final "solution". He is saying that Capitalism in its true sense is dead/has been killed off. It is politically impossible to get back to it within any predictable time frame. Since, now, Socialism/Creditism and wasteful spending is the order of the day, the US government shouldn't waste money on mundane social spending, but should waste it on things that are more likely to have large benefits in the very long term, ie: super technologies. That the US will survive long enough to implement such an approach is demonstrated by the survival of the Japanese for so long under such crushing debt. This I think is the overall message.

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Re: Perspectives on the global economic changes

Postby Austin » 04 Sep 2014 18:54

^^ But I think Japan survived that long but lost Yen as reserve currency status , if US increases its debt assuming it does as politician in US would have to increase the debt threshold then USD may also loose its reserve currency status.

I am not certain that a single Japan as example would work for other countries , What does Neshant and panduranghari think about it ?

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Re: Perspectives on the global economic changes

Postby Austin » 05 Sep 2014 17:35

Boom Bust: John Brynjolfsson on European Central Bank & Zady on conscious consumerism

http://rt.com/shows/boom-bust/185212-eu ... nsumerism/

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Re: Perspectives on the global economic changes

Postby amritk » 06 Sep 2014 21:19

SK Mody wrote: the US government shouldn't waste money on mundane social spending, but should waste it on things that are more likely to have large benefits in the very long term, ie: super technologies. That the US will survive long enough to implement such an approach is demonstrated by the survival of the Japanese for so long under such crushing debt. This I think is the overall message.


Yes, and he is thinking along the right lines. However there is another fundamental shift in wealth creation and social evolution that has been happening which he does not address: the fact that high tech industry does not require or employ a lot of people. Apple market cap is same as Argentina GDP, but Apple has only 50k employees (and far fewer at its core). Same with drug companies, etc. But the US has 300M+ people to feed - a large country demographically.

Advantage of government investment in lower tech (infra, skill development, ...) is that it helps people become more productive vs their foreign competitors, which is the immediate problem. This is what Germany (another largish population) has been doing for the last decade or more. Government investment in high tech would only serve to accelerate the takeover of the Machines.

By the way, I regard solar, hybrid vehicles, etc as low tech (i.e. they are low-information, high-labor industries) but high impact because of their influence on energy and independence. I would support government spending in these sectors based on what he is saying. These decisions might be different for a demographically small country like Canada or Scandinavians etc.

FYI for those who followed the Solyndra story (referred to at the end of the video), I have it from good sources that the $500M loan guarantee came with many strings: e.g. that most of the money had to be spent on blue collar type work like construction of the new factory etc. The CEO had the spend the money (even though he knew the solar panel prices were tanking) or refuse it altogether. He chose to spend it.

JMT - would like to know what others think.

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Re: Perspectives on the global economic changes

Postby panduranghari » 07 Sep 2014 04:51

Austin wrote:^^ But I think Japan survived that long but lost Yen as reserve currency status , if US increases its debt assuming it does as politician in US would have to increase the debt threshold then USD may also loose its reserve currency status.

I am not certain that a single Japan as example would work for other countries , What does Neshant and panduranghari think about it ?


Take this for what its worth.

First and foremost is OUR (?) apparent misunderstanding of the differences between money and credit. At times, they may appear to have the same characteristics. At other times they act completely opposite from one another. As an economy is expanding, an increase in the total amount of credit would appear to have the same effect as an increase in physical dollars because credit is widely accepted as an equal to money. In a sense, they are the same. They are both "fiduciary media" (in english they are both a representation of something else, rather than having intrinsic value themselves). But when the economy is contracting, the prospect of default is thrown into the equation. When this happens, money increases in value relative to credit. Money is more valuable than credit because in the event of default, the physical dollar holders are king. Yes, the U.S. treasury could default on it's obligations. Holders of treasury bonds would get a big, fat zero, while holders of physical currency would still have a claim. In effect, they act similar to a preferred share as opposed to common stock. They are a step above in terms of priority.


Image

When we are through with this crisis we will understand the difference between real wealth and perceived wealth.

It was a good interview but it was an American perspective. And in American perspective there is no middle ground. My way-highway stuff is what the world has tolerated of America. The world does not hate America. They do however dislike the exorbitant privilege dollar has given the Americans.

America can never follow Japanese footsteps because they need someone like America to undertake carry trade in trillions on top of the 100 trillion dollar derivative pyramid that is already in place. if you look at the latest (July 2014) industrial output numbers for USA, ITS the lowest in their recorded history. It essentially could mean, even American corporations are not investing anymore in their industry. They truly know the goose is cooked. And where will these 'super technologies' come from?

Truly I am living in a event horizon. Can't be bothered by the outcome either way. It will be good for India and that's what matters.

I also feel the economic crash will give Modi government unassailable powers to control the game. I wont write more about this, but the way I see it, it will be god sent. Currently, the anti-Modi brigade is shriller day by day as their is support coming from overseas. These turn coats wont have anyone to help them, when the noose will tighten. Deservedly so. Until then we wait.

This planning for future with 3 portfolios in a currency destined for dustbin, is plain crazy. Snake oilmen can sell better cures than this.

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:P :P :P :P :P :P :P :P :P :P :P :P

Austin
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Re: Perspectives on the global economic changes

Postby Austin » 07 Sep 2014 22:24

panduranghari , Thanks for the reply , He was mentioning some $600-700 Trillion dollar derivative not sure if i heard that right.

Having said that the economic crisis when ever it comes will be good for us and general economy of the worlds, we been living too long on adulterated steroids


panduranghari
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Re: Perspectives on the global economic changes

Postby panduranghari » 07 Sep 2014 23:54

1000 trillion dollar derivative pyramid. Not 100.

panduranghari
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Re: Perspectives on the global economic changes

Postby panduranghari » 08 Sep 2014 00:02

svinayak wrote:http://moneymorning.com/ext/articles/rickards/secret-bankruptcy.php?iris=252776&utm_source=taboola&utm_medium=referral


Saar, come on now. How can Fed be bankrupt? Ever? They have the mandate from the treasury to create credit at a punch of the button. And how many Americans are lining the streets outside the banks demanding cash? None as far as I am aware.

All this deflationist talk about shortage of physical dollars means the deflationists have not thought it through.

There is something called political will. The political will makes every deficit whole by printing more dollars. In the link a few posts above there is a quote which goes as follows;

"Human nature has followed this path for thousands of years. You know the old joke about outrunning the bear? Well, these lenders will influence our financial policy as such. They will try to get their debt securities liquefied first, spend the fiat and in this process outrun you and I. Leaving anyone they can beat to the mercy of the hyperinflation bear eating their remaining fiat assets…"

"…hyperinflation is the process of saving debt at all costs, even buying it outright for cash… because policy will allow the printing of cash, if necessary, to cover every last bit of debt and dumping it on your front lawn!"


Who are we second guessing?

You know who this guy is?

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Austin
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Re: Perspectives on the global economic changes

Postby Austin » 08 Sep 2014 16:07

panduranghari wrote:1000 trillion dollar derivative pyramid. Not 100.


So all these derivative are from US or funded by US Banks/Corporations ? Or some of it also includes from EU and some other countries ?

vishvak
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Re: Perspectives on the global economic changes

Postby vishvak » 08 Sep 2014 20:53

I think it was TSJones who pointed out that wealth can be generated as also 'absorbed' by some central entity to control excess liquidity.
Some graphs link here about gold as part of overall GDP. Swiss score the highest there! Not sure if the Swiss currency is backed by Gold. USA or Indian currency isn't backed by gold but backed by commodities perhaps.

Austin
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Re: Perspectives on the global economic changes

Postby Austin » 08 Sep 2014 22:36

Indian currency is pegged against dollah , no currency AFAIK is pegged against gold

panduranghari
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Re: Perspectives on the global economic changes

Postby panduranghari » 08 Sep 2014 22:57

http://www.bis.org/publ/otc_hy1405.pdf

OTC derivatives denominated in USD stand at 710 trillion dollars at the end of 2013. The figure for mid 2014 should be available in Nov 2014.

We have not counted the derivative market in other currencies, which we can round off to make the whole worth 1000 trillion USD.


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