Important talks
The prime minister will be pushing his vision of a "global new deal" at the White House today. One thing we can say for sure: he's given the a lot more thought than the president.
That's no reflection on Mr Obama. He has quite a lot else to do these days, and unlike Gordon Brown, he hasn't spent a large chunk of his life thinking about, say, the finer workings of the World Bank.
Usually the US president would be able to count on his Treasury Department to do his international economic thinking for him. But it is what you might call short-staffed. The two senior international posts in the department haven't been filled yet, and there's no-one on the immediate horizon.
The upshot is that many of the key summit negotiations are having to be handled by the Treasury secretary himself.
Tim Geithner is no slouch when it comes to the ins and outs of the international financial system. Among other things, he used to run part of the IMF. But he also has quite a lot on his plate (today it was launching a new $1tr lending facility with the Fed).
The same applies to Larry Summers, the president's key economic advisor, who will also be in part of today's meeting and knows the territory well.
It all makes today's meetings with the president and senior officials a lot more important than they would usually be. The British officials need to get the Americans to focus now, because they know they may not get a better chance.
PS In the next few weeks you're going to hear and read plenty about the issues facing the London Summiteers. I've just written an article for the on one key issue that's taking up a lot of the sherpas' time: beefing up the IMF. You can read it .
Comment number 1.
At 3rd Mar 2009, WerringtonSilent wrote:So what is Brown's plan? His micromanagement must be directed towards something other than keeping the books close to his chest for a 13th year. We know he has not left himself a lot of room for maneuvre. What do you think is left on the table?
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Comment number 2.
At 3rd Mar 2009, MrTweedy wrote:Mike Shedlock writes:
"Dear Mr. President, I read your New Era $3.6 Trillion Budget Proposal. I also listened to your speech Tuesday night. You made a great campaign speech. However, the campaign is over. You won. And the reason you won is you offered hope as well as a promise of change.
With all due respect Mr. President, Tim Geithner and Ben Bernanke are offering the same policies as President Bush and Secretary Paulson. Those policies are to bail out banks regardless of cost to taxpayers. Mr. President, it's hard enough to overlook Geithner's tax indiscretions.
Mr. President, it is harder still, if not impossible, to ignore the fact that neither Geithner nor Bernanke saw this coming. Yet amazingly they are both **** sure of the solution. Even more amazing is the fact that solution changes every day.
With all due respect Mr President, Geithner and Bernanke are a huge part of the problem, and not part of the solution, and the sooner you realize that the better off this nation will be.
With all due respect Mr. President, your budget proposal is the same big government spending as we saw under President Bush. The only difference is you promised more spending and bigger government, while President Bush promised less government and less spending and failed to deliver on either count.
With all due respect Mr. President, it is impossible to spend one's way out of a problem, when the problem is reckless spending."
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Comment number 3.
At 3rd Mar 2009, Benito wrote:I gather the $tr lending facility is the 'TALF'
"The TALF is designed to catalyse the securitisation markets by providing financing to investors to support their purchases of certain AAA-rated asset-backed securities," the Fed and Treasury Department said in a joint statement.
from
Stephanie, I don't suppose you might explain TALF to us with the same clarity you explained QE?
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Comment number 4.
At 3rd Mar 2009, foredeckdave wrote:It's quite simple really. They are only going through the usual executive/political gavotte - they are having a meeting about having a meeting
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Comment number 5.
At 3rd Mar 2009, MrTweedy wrote:No. 4 foredeckdave
They're having a meeting to find out why no work's getting done.
(No work's getting done because everyone is in a meeting).....
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Comment number 6.
At 3rd Mar 2009, thatotherguy2 wrote:He can push all he wants Steph, but he better be fast about it. Obviously you've missed the news that Rupert Murdoch has had enough of Mr Brown and that he will be leaving the political stage before the summer is done. Tisk. Tisk. You really should keep up Steph!
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Comment number 7.
At 3rd Mar 2009, newsjock wrote:With a world-wide recession prevading the planet, will there be much on the financial front to talk about at a G20 summit ?
The G20 can be looked on as a navel flotilla, the individual nations as individual vessels.
Every captain will be doing his utmost to keep his/her vessel afloat (no guarantees there).
Until national lolly is again stable, any other discussions are little more than fashionable wallpaper.
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Comment number 8.
At 3rd Mar 2009, LibertarianKurt wrote:MrTweedy # 2
Interesting that you have quoted Mike Shedlock whose economic thinking is similar to mine. In fact, Mike has, in the past, contributed to the LVMI.
Like him, I am of the firm opinion that "big" governments are the root problem of and not the solution to all economic crises.
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Comment number 9.
At 3rd Mar 2009, LibertarianKurt wrote:Ah, the "global new deal"! Is this the new New Deal that is going to be the same as the old New Deal - you know, the one that actually prolonged The Great Depression instead of ending it?
And if the new New Deal doesn't work, we can all have a big war (and build a few Pyramids too!) to end the depression - just like Keynes suggested.
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Comment number 10.
At 3rd Mar 2009, Straightalk wrote:This would be the same Larry Summers who according to Bloomberg has cost Harvard a few pennies:
"The trouble started a few years ago, when Lawrence Summers, then Harvard鈥檚 president and now director of President Barack Obama鈥檚 National Economic Council, presided over the purchase of so-called interest-rate swaps to protect the school against rates going up. Instead, the swaps backfired as rates fell, forcing Harvard to search for more cash in the bond market late last year just as credit dried up."
If guys like Summers can mess up so big when the market was relatively stable, think what havoc they can create in these uncertain times. But then the same can be said for Brown in his role as Chancellor and Tim Geitner who was pretty central to a lot of the mess in Wall Street in his previous role as NYC Federal Reserve champion.
Bring on the clowns!!!
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Comment number 11.
At 3rd Mar 2009, strategycall wrote:After coming away from his 30 minute meeting with Obama, Brown announced his latest list of 'unconventional unconventionals' to kick start the UK economy, as follows
- 6 more Bridges to be built over the Tyne whether they want them or not
- War to be declared on the Isle of Man as it is a lot closer then the Middle East and is therefore a rational choice to save money
- Rules for the game of Monopoly to be rewritten so that first one to lose all their money wins the game ...and gets a government handout
- Car parking fees to be introduced for stockpiled cars
- Cass and LSE Economics Depts to be closed down immediately as that is where Merv gets his wackiest ideas from
- each household to be issued with a bag of self adhesive Zeros to be added to the face value of banknotes when mega inflation occurs
( zeros to be attached diagonally)
-----
Brown announced that Obama fully supported his Uk and World saving plan by agreeing with the 'whatever it takes' approach
'when I told my special relationship friend Barak, of my latest plan to save firstly the UK and then the world economy by 'whatever it takes', he was so excited by my plans that he forgot my name.'
'In fact he said'
'Yeah whatever dude...gotta go to meet the Scouts'
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Comment number 12.
At 3rd Mar 2009, Oblivion wrote:"Usually the US president would be able to count on his Treasury Department to do his international economic thinking for him. But it is what you might call short-staffed. The two senior international posts in the department haven't been filled yet, and there's no-one on the immediate horizon."
Nonsense. People like George Soros funded, backed, found, groomed, raised and PUT Obama where he is. They saw this crisis coming 20 years ago and found the right man. They don't need economic reps, and Obama doesn't need economic thinkers.
I was reading books 5 years ago about this crisis and the coming changes to the world bank, to the IMF, the coming evolution of world government, the need for global regulation of global finance and so on. These thinkers saw 5's, 10's of years ago the things that are happening now that you and people like you can barely make sense of.
The situation is clear: diminishing private sector, strengthening of the state, evolution of supranational and global government. Long term credit contraction, public spending on tech and infrastructure. That's it in a nutshell. Economics discussion over. Go back to work/sleep. Morons.
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Comment number 13.
At 3rd Mar 2009, Straightalk wrote:Brown's "Global Vision" is myopic, being tied to the usual mantra of returning the economy to healthy growth.
The truth is that anyone with Global Vision would realise that the globe is rapidly warming up. Latest results as reported in New Scientist (28 Feb 2009), suggest that the rise in avearage global termperature by 4 degrees C could happen much faster than earlier expected. Even by 2050. This would potentially make much of the world uninhabitable. Key members of the scientific community and some politicians are now coming to acknowledge that the Kyoto Treaty and its offspring are not getting anywhere near the results needed to stop the greenhouse gas increases causing a climatic catastrophe.
Yet here we are with politicians whose key concern this year is with getting us all back to growth economies. When will they wake up to reality and realise that such "visions" will simply hasten a real nightmare scenario. One that will make the current economic crisis look like Disneyland.
Unfortunately, as the current economic crisis demonstrates, most of our leaders seem to live in denial. Please - No using the "R" word until it was obvious, now please don't use the "D" word.
Those who warned against the potential financial and economic disaster through the creation of excess credit in 2005-2006 were treated as fools, by many of the same people still stearing their ships of state. No doubt the economic crisis will be worked through eventually, even if it takes 20 years.
Unfortunately, the climatic crisis (when it unravels, will take a few tens of thousands or millions of years to work through.
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Comment number 14.
At 3rd Mar 2009, tummy14 wrote:Stephanie -
It would have been far more constructive in your article to go in to great detail about Brown's plan for a 'New World Order' - his words not mine... and what this means for people around the world.
It is now painfully obvious that Brown's 'New World Order' is an attempt to first move to global regulation, then global currency and finally a global government. A long time plan for the global elites... Basically, according to our dear leaders, the answer to the problem of too much debt, over consumption and too inter-linked markets seems to be MORE debt MORE consumption and MORE globalisation. This madness has to end. The answer is in fact MORE savings, MORE production and MORE Localism - the policies about to be adopted leading up to G20 our about to kill our freedoms as we know them. Wake up Britain.
This is pretty major news - one does start asking the question why this isn't being discussed more fully in the mainstream media - important questions like who this system is designed to benefit simply aren't being asked... why?
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Comment number 15.
At 3rd Mar 2009, Prof John Locke wrote:last moderation...7:35
fours hours to moderate six posts...this is a joke, it ruins the spontaneity of the comments...
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Comment number 16.
At 4th Mar 2009, 2trueblue wrote:And what so far has Brown achieved? WE are least prepared for what we are enduring and have nothing in the kitty to buffer us against the winds that are continually beating us up. Brown and his administration are great talkers but so far all of it is a mess.
The latest on the exit packages of the top people from the banks shows the true level of incompetence. At the end of the day, it is all in the detail. It is not tricky, but no one seems to have been awake. A rookie in HR could have done a better job.
I don't care about his posturing, he dosen't have any answers. just words.
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Comment number 17.
At 4th Mar 2009, foredeckdave wrote:#12 FrankSz
Who pulled your chain tonight? Morons is more than a bit hard!
There's a few problems with this march towards a New World Order - PEOPLE.
Doesn't matter what Soros et al would like to see, At some point they have to try and impose it. It is then that history since WW2 has shown that they don't have effective tools with which to impose World Order. Call them rebels, insurgents or freedom fighters, no effective counter-measures have yet been created.
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Comment number 18.
At 4th Mar 2009, MarcusAureliusII wrote:Mr. Tweedy, you and Mike Shedlock have been had by a slick politician. It was as obvious during the campaign as the looming depression was for the last several years. I think it was PT Barnum who said "there's a sucker born every minute." Also, never give a sucker an even break. I could hardly believe so many people actually fell for it but as someone else once said, nobody ever went broke underestimating the intelligence of the American public. If it's any consolation, the other guy McCain was cut from the same bolt of cloth so it would not have mattered if he'd won. That's why I didn't endorse either candidate. I thought neither of them was qualified to solve the current mess we are in.
There are more shoes to drop. Besides a disaster in Eastern Europe, there is a huge bubble in the US Treasury bond market that will burst and more wealth will be wiped out. Hold on tight, it's going to be a rough ride. Tomorrow, March 4, I expect the Dow to open down about 300 to 400 points below Tuesday's close.
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Comment number 19.
At 4th Mar 2009, MrTweedy wrote:No. 18. MarcusAureliusII
I'm glad to see you remember one of the wise old emperors of Rome. Marcus Aurelius was a bit of a stoicist. I think large doses of stoicism will be in fashion again during the coming years....
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Comment number 20.
At 4th Mar 2009, John_from_Hendon wrote:"Gordon in cloud cuckoo land"
It is essential that Gordon Brown blames the USA for the entire credit crunch.
If he fails to do this in any way at all for the entirety of the depression then the questions about the UK's own housing/asset price bubble are inevitable. As soon as the UK question is asked then he is unavoidably condemned.
However, Barack Obama has no such objective. Politically as a candidate he could blame Wall Street, but now as President he need to engender optimism to work through the collapse. Mr Obama will not mind blaming other countries too, such as the UK's bank regulation system and the UK's banks. Indeed blaming such people will help him.
So what is entirely predictable is a non-meeting of minds with Gordon returning saying Mr Obama also blames Wall Street (when he will say nothing of the sort) and Mr Obama will just see Gordon Brown as some quaint historic bungler who sat by and let the crisis happen.
Neither view is quite right but this is politics!
I predict nothing positive will come from this visit and the World will just continue to drift.
Gordon Brown seems totally unable to grasp what must be done - starting by admitting part of the blame.
Mr/Ms Barbara2 (#18) worries about the US treasury bond 'bubble' - does he/she know that his/her nation, the USA, will default? I add to his/her worries to note that it was felt necessary today in the UK to let it be known that the UK's National Savings and Investment deposits (like UK Treasury gilts) are 100% guaranteed! I feel that before we see a US default there would be a run on the US dollar and that Mr/Ms Barbara2 is overstating the risk of a US default (today - tomorrow I may think differently!)
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Comment number 21.
At 4th Mar 2009, angryCB wrote:Stephanie - could you or someone else please explain a bit more about the current financing of the IMF. You say that it has used $46b so far and has about $150b more to lend this year.
Where are those unused funds at the moment and what are they doing? They cannot, presumably, be sitting idle somewhere so is it the case that committing them to Country "A" will mean pulling them back from Country "B" who has them at the moment?
Alternatively, perhaps they are not yet in the hands of the IMF but callable from various countries, in which case who is committed to providing them? Can those countries do so without creating problems for themselves? Is the UK committed to providing any funds? I assume the providers of the funds do not make any return on their "investment" - if they do receive "interest" there must be a risk of the IMF going bust?
Another possibility is that the $150b would be created by quantitative easing but which currency would be printed?
Many thanks, sorry to show my ignorance.
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Comment number 22.
At 4th Mar 2009, mrsbloggs13c2 wrote:#4
I think JK Galbraith described this type of activity rather well in The Great Crash.
I seem to remember that he, rather tongue in cheek, describes the need to be seen to be doing something.
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Comment number 23.
At 4th Mar 2009, mrsbloggs13c2 wrote:A 'Global New Deal'. HA!
Revise Basel II, different regulation, bankers pay or pensions, movement of capital, leverage, even failing economies.......
The mechanics of global finance are now barely the issue.
This appears to be another side show.
Surely the question has to be where the devil is all the money going to come from to pay for all the planned and potential expenditure and loans?
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Comment number 24.
At 4th Mar 2009, MrTweedy wrote:No. 8. Libertarianized Kurt
I'm glad you find Mike Shedlock interesting.
I would agree with governments spending taxpayers' money if it led to an increase in private sector profits, and paid a return on the governments' investment.
However, I fear governments will simply build roads to nowhere, which will provide little return on the sums "invested". The inescapable burden will then fall heavily on the taxpayer, who will be forced to work in order to pay off the bad debts of others.
Too little government intervention during the boom has caused too much government intervention in the bust.
"LVMI" = Las Vegas Magic Invitational
I knew you were a gambler at heart. Shame the gamble went wrong.
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Comment number 25.
At 4th Mar 2009, mrsbloggs13c2 wrote:from Matt Frei, based in the US for the 成人快手
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Comment number 26.
At 4th Mar 2009, Zootmac wrote:ref 20 John from Hendon
"It is essential that Gordon Brown blames the USA for the entire credit crunch".
Absolutely on the ball, and that is what he has unashamedly tried to do, for quite a considerable period, and that is JUST POSSIBLY one of the reasons why Obama has been less warm towards him than expected.
Does Obama respect Brown's efforts to make America scapegoat, any more than Fred Goodwin does?
Poor Gordon. On top of everything else, the Obama meeting was removed from top media coverage by the situation in Pakistan, and Miss Trimble is still getting more pictures than him in the papers.
A new starter for 10 Downing Street required, methinks.
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Comment number 27.
At 4th Mar 2009, MarcusAureliusII wrote:How important could it have been? President Obama gave Brown a whole half hour, the length of time it takes to sit through any other sitcom made for TV.
Brown will be received very courteously by both President Obama and Congress. That is America's way of treating foreign dignitaries. But his words are meaningless in the context of American politics. America will not pay him or anyone else outside the US any attention. Obama's constituents are American taxpayer and American workers. He will structure his stimulus package to keep the bulk of the wealth and new jobs inside the US within the context of the WTO rules if possible or he will have all hell to pay. The mood of America towards jobs and money going outside the US is very ugly right now. Obama is a good politician and he knows it.
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Comment number 28.
At 4th Mar 2009, MarcusAureliusII wrote:Stephie, what didn't you like about my posting to Mr. Tweedy in the thread about false hope, the message that in his expectations of Obama he'd bought a pig in a poke or the frank words I used to tell him that?
My first posting on a this 成人快手 blog and my message broke the rules. I must be doing something right.
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Comment number 29.
At 4th Mar 2009, strategycall wrote:Hi Stephanie,
Your article ref
'Will the G20 expand the role of the IMF? '
makes for fascinating reading particularly in the proposal for the IMF to create more of its own currency (SDR) at the current exchange rate of $1.50 = 1 SDR.
As you point out, the main effect is that the proposal will be inflationary and amounts to a global printing of money.
Which if endorsed by G20 identifies that the G20 Governments are willing and active participants in unleashing inflation on the masses. Not a pretty prospect.
However, could I request that you expand on your article for the areas mentioned in your last sentence in the article which I interpret as being that some of the other proposals floating around might be even more expensive (or wackier !)
Thanks
ps For those who haven't seen it, Steph's article is here
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Comment number 30.
At 4th Mar 2009, LibertarianKurt wrote:MrTweedy # 24
Government should not intervene in the "economy" at all for the simple reason that government does not produce anything; it does not generate any wealth whatsoever.
Therefore, to fund its activities, government must appropriate revenue (wealth) from the people and this it does in three ways by force of law:
General taxation (direct and indirect)
Borrowing
Seignorage (inflation tax)
Current tax laws allow the government to directly expropriate peoples' property (money) under the pain of prosecution. They also allow the government to direct funds to itself through the use of permission-to-live prices (VAT, duties etc). There is no alternative to these taxes except doing without, jail or death.
The other two sources of revenue (borrowing and inflation tax) rely on the government's use of the central bank. The central bank is granted the exclusive privilege through the use of the laws of legal tender to be the monopoly producer and therefore manipulator of money.
If the laws of legal tender were abolished, then other financial institutions would be able to compete freely with the central bank in the production of money. People would be able to choose which money they preferred to use based on the monetary policies of these institutions. For example, if the central bank decides to inflate the supply of its money - as it does whenever it buys government bonds to fund government spending - then people would quickly learn to switch to another currency that still retained its purchasing power.
The financial institutions - especially the central bank - would also quickly learn not to inflate or debase their currencies. This would also have the added bonus of severely limiting the government鈥檚 predilection for borrowing to fund its spending programs. It would also end the phenomenon of inflation tax.
Government spending would be strictly limited to the amount it could raise through taxation; that is to say it would need to have a balanced budget all the time. One good thing to arrive out of a scenario such as this is that in order to fund its wars, government would be truly at the mercy of the taxpayer and his vote.
Competing currencies is not a new idea. It was put forward many years ago by the Austrian School economist, Friedrich von Hayek
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Comment number 31.
At 5th Mar 2009, narashefi wrote:Stephanie wrote: "Tim Geithner is no slouch when it comes to the ins and outs of the international financial system. Among other things, he used to run part of the IMF."
is less flattering. In mid-February, Geithner was supposed to deliver a "detailed" proposal to "save the banking system." He failed to do so.
"The man who engineered the takeunder of Bear Stearns (through what I would argue was capricious and outrageous actions including yanking their credit line they believed was committed, along with failing to disclose they would have access to the Discount Window just 24 hours later!), the man who sat back and said he had "no legal authority" to do anything about Lehman Brothers, the same man who has had nearly a full year to examine the books of these institutions as the primary intermediary and counterparty to every major broker/dealer on Wall Street (since Bear blew up) at the point where he was supposed to announce a plan he didn't have one?
ONE YEAR later?"
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Comment number 32.
At 5th Mar 2009, MrTweedy wrote:No. 30 Libertarianizational Kurt
Thanks for the reply. My point of view is that government must set safety limits, to protect the private sector. The government must intervene to protect the private sector from making losses. Remember, markets make profits and losses, it's not a one way street of profits only.
The government must enforce a 5% stop loss. It must save its tax receipts and keep them in reserve, in order to spend them on helping private business overcome short term problems.
Remember, business is competitive. This means British business will make losses if it makes bad decisions. The government must intervene when things go badly for British business. There are also the "externalities", such as polution, which must be ironed out by government intervention.
Unfortunately, today we have:
(i) Government has no money held in reserve - no rainy day fund
(ii) Private business made huge errors of judgement, racking up huge huge huge losses - exponentially huge losses
Your free market is broken.
In my day we called it "laissez-faire" and we accepted that government must intervene to provide stability in a competitive environment (the government was the friend of business).
The whole concept then got rebranded and renamed "libertarianizationalism" whereby the new kids on the block forgot that business was essentially unstable and prone to random shocks. They discarded all the safety limits, and promptly found themselves upside down in a ditch. I would like to drive past and leave them there, but the losses they have caused, threaten to bring down the whole western economy.
What a bunch of chumps....
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Comment number 33.
At 5th Mar 2009, JadedJean wrote:STORY-TELLERS
LibertarianKurt (#30) "For example, if the central bank decides to inflate the supply of its money - as it does whenever it buys government bonds to fund government spending - then people would quickly learn to switch to another currency that still retained its purchasing power."
WHICH
Note, once you grasp the full implications of this it may well take the wind out of your sails, so - you probably won't grasp it is my bet. Ideologues' grand rhetoric and confidence comes from their not being fettered by empirical reality.
See/hear Mandelson at Mansion House, or celebrities at The Oscars. Story-tellers.
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Comment number 34.
At 5th Mar 2009, LibertarianKurt wrote:MrTweedy # 32
You are mistaken. It is precisely government intervention is the first place that has caused private sector business to make losses.
After the tech-stock crash of 2001, the government through the central bank artificially lowered (below the free market clearing rate) interest rates and expanded the supply of money and credit to counteract any recessionary effects (exactly the same as they are doing now).
However, the effect this expansion in credit causes a distortion in prices (e.g. raw materials, labour costs etc) which then goes on to give business people or entrepreneurs the wrong market signals with consumers thinking short term and businesses longer term.
A good example of this was asset price inflation, especially property prices which were artificially bid up way beyond their real values; hence the bubble.
When sub-prime default "pin" burst the property bubble, then credit dried up rapidly; businesses couldn't borrow which in turn revealed the malinvestments/unsound decisions that were made during the credit expansion phase. It is these bad investments that are still being liquidated that is causing the pain of unemployment and causing the government to intervene yet again.
Once you recognise that governments intervene all the time and cause recessions/depressions, then you will understand that "laissez-faire" capitalism has never been allowed to function at any time during the 20th century much less the first ten years of this one.
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Comment number 35.
At 5th Mar 2009, MrTweedy wrote:No. 34. Libertinistic Kurt
We make the same point -
Government removed regulation in 2001, allowing British commercial banks to borrow money on the wholesale money markets for the first time. You call this government interference. I call it government dereliction of duty.
You come at it from one side, saying it proves your point. I come at it from the other side, saying it proves my point.
I say the government must put in place lending controls; so that banks cannot over-lend and cause the price of necessities (like houses) to increase over a ratio of 3 times average income.
Essentially, there were 3 choices open to the government (i) No regulation; (ii) Enough regulation to save the bankers from themselves; (iii) The government takes direct control of the banks.
These choices can be illustrated by taking car driving as a substitute for the finance industry:
(i) The government abolishes all forms of regulation for private car drivers.
No need to pass a driving test
All speed limits withdrawn
No rules about driving on the left or on the right
No road signs
No MoT testing
The resulting carnage on the roads prompts the government to massively increase spending on hospitals and doctors, to take better care of the wounded. The government also promises to pay the first GBP50,000 towards the cost of replacing any private car written off in accidents.
The government asks people to drive at the speeds they used to in back 2007, as following all the bad accidents in 2008, people are very risk averse and are only driving at 20mph, causing 10 mile tailbacks on the major motorways.
The government blames the DVLA and the AA and RAC for not informing them of the danger on the roads.
(ii) The government allows people to buy any reasonable car and drive wherever they like, provided they adhere to some basic rules of the road. The government regulates driving. Drivers must be qualified before being allowed on the roads, MoT testing, the Highway Code, reasonable speed limits. All this is adequately policed.
(iii) The government takes central control of the roads and driving.
"I want to go down to the shops, to buy some food".
"You'll have to wait until Alistair Darling arrives, to drive you. No British private citizen can drive anymore, we have to be chauffeured by the government now".
"Here he is". "Mr Darling, please take me to the shops".
"Mr Darling, you're kangarooing down the road".
"Sorry......I'm not used to driving this make and model of car; the clutch is a bit heavy".
"You should have turned left, not right. You're now going in the wrong direction".
"I'm sorry, but I don't know the local roads as well as you, as I don't live anywhere near here"......."How do I put the car in reverse?"
"Now we've run out of petrol".
"I thought the government was paying for fuel and maintenance, having taken direct control of the roads and the private cars?"
"Yes, but when we took on responsibility for all the liabilities, we didn't foresee how expensive it would be to run". "Please hang on while I arrange to sell some more of the Country's gold reserves. I can then use that money to buy some more petrol. It's either that, or we put the basic rate of income tax up to 50p, or we issue some more gilts and sell them to the BoE".
I know my preferred choice (ii).
You seem to favour (i).
Kurt, dear boy, I won't persuade you and you won't persuade me.
However, my "Tweedys" will be worth one thousand of your "Kurts" any day - my currency's stronger than your currency.
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Comment number 36.
At 5th Mar 2009, LibertarianKurt wrote:MrTweedy # 35
Okay, it appears that I have been unable to elucidate the fundamental point of government/central bank complete control over money and de facto the whole banking system.
Nevertheless, the BoE has announced it is going to officially embark on a policy euphemistically called QE (printing money). It remains to be seen if this will work or not. However, if they push too far and the inflation genie escapes out the bottle, then they will find it extremely difficult if not impossible to put it back in again (a bit like trying to push toothpaste back in the tube!).
There will be only one outcome of this; currency destruction. Your currency!
All paper monies end in failure.
All paper monies end in failure.
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Comment number 37.
At 5th Mar 2009, MrTweedy wrote:Kurt, dear chap
It's not the paper money that's the problem; it's the government which is derelict in its duty to uphold stability that's the problem. A currency only collapses when markets spin out of control.
Your markets are out of control!!
The government deregulated the markets to their doom......your liberationalized markets!!
The QE is the government's vain attempt to rein in the runaway bad debts.
The government failed to safeguard the economy through upholding safe lending limits - too little intervention.
Now the government is undertaking QE out of sheer panic - too much intervention (or, if we're lucky, purely ineffective intervention).
Again, you use QE as an example to uphold your philosophy, and I use it as an example to uphold my philosophy. The trouble is we will both be losers in today's economic environment.......
If I wash up on a life raft near you, I'll be happy to pull you out of the water to safety, as I'm sure you'd do the same for me. Until then, good luck with surviving the wrath of badly behaved markets....
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Comment number 38.
At 6th Mar 2009, LibertarianKurt wrote:MrTweedy # 37
鈥淭here are none so blind as those who will not look. If you are one of those who will look, take a look around. You are surrounded - surrounded by millions who will not look. These are the blue pill people. Who are these blue pill people and why won't they look?鈥
Morpheus, The Matrix, 1999
Good luck surviving your government!
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Comment number 39.
At 6th Mar 2009, MrTweedy wrote:No. 38. LibertarianKurt
They are certainly not my government. I think they have more in common with you than me.
Either way, I wish you good luck in the coming storm (at this point JadedJean steps in with the video for Perfect Storm......)
All the best, you libertine you!!
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Comment number 40.
At 7th Mar 2009, JadedJean wrote:For years/decades we've heard leaders of Western Governments describe regulating, planning, command economies as enemies of the free-world, state sponsors of terrorism, wielders of domestic oppression and represssion, whilst at home (and abroad), de-regulation, human rights, , equality, and individualism have been revered as paragons to be promoted everywhere (regardless of the consequences for those so innumerate/illiterate that they can't cope with its essentially predatory ulterior motives - as should now be obvious to almost all).
Still one finds people ('useful idiots'?) asserting that the reason why we're in such a mess now is just because we haven't (i.e become anarchistic) enough.
Who would you say such people were acting as protagonists/agents/'useful idiots' for if not as we once knew it? Who were/are the who flooded the USA/UK with immigrants? See .
In her meeting with the Russian Foreign Minister, H. Clinton offered him a virtual reset button.
given the ? (See Solzehenitzen's last, historical work if you can find it in English).
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