Back To The 1930's In Political Rhetoric

[interestrateripoff]

http://www.guardian.co.uk/business/2013/jul/09/eurozone-crisis-imf-greece-economic-forecasts

Pointing to the eurozone's weak growth and record unemployment, the IMF urged "concerted policy actions" to end the malaise.

IMF managing director Christine Lagarde warned bluntly that the economic crisis in Europe had not been resolved, saying:

Over the past year, substantial actions at both the national and euro-wide levels have been taken to combat the crisis,"

But despite this progress, the economic recovery remains elusive, unemployment is rising, and uncertainty is high. Additional policy measures are required to fully restore confidence, revive growth, and create jobs.

..

The IMF's four-point plan for the eurozone contained familiar themes:

• a 'credible' assessment of how much capital needs to be pumped into Europe's struggling banks (and then action to fix the problems)

• completing banking union (including introducing a single resolution mechanism for failed banks)

• new measures to stimulare economic demand (with a nod of approval to Mario Draghi for last week's promise to keep interest rates low).

• and finally structural reforms (always an IMF favourite).

http://www.econlib.org/library/Enc/HooversEconomicPolicies.html

We might have done nothing. That would have been utter ruin. Instead, we met the situation with proposals to private business and the Congress of the most gigantic program of economic defense and counter attack ever evolved in the history of the Republic. These programs, unparalleled in the history of depressions of any country and in any time, to care for distress, to provide employment, to aid agriculture, to maintain the financial stability of the country, to safeguard the savings of the people, to protect their homes, are not in the past tense—they are in action. . . . No government in Washington has hitherto considered that it held so broad a responsibility for leadership in such time.

And unemployment in America during the great depression was effectively contained....

Edited July 9, 2013 by interestrateripoff

[Live Peasant]

http://www.guardian.co.uk/business/2013/jul/09/eurozone-crisis-imf-greece-economic-forecasts

And unemployment in America during the great depression was effectively contained....

The 75% of the population who were never unemployed during the great depression, nevertheless, took an average 45% cut in the value of their wages.

[Live Peasant]

Having read Galbraith's book and Bernanke's essays on the great depression it was the single line that stood out for me but I can't remember which text it was.

[interestrateripoff]

America's Great Depression

Murray N. Rothbard

Currently reading this on the Great Depression.

I'd argue the worlds central bankers are repeating the same mistakes as before.

[Bloo Loo]

Of course they are.

Banking is no different today than it was then.

Sure they got lots of fancy "products", but at the end of the day, they trade assets and liabilities and call them their own.

When trade falls, they have an instant problem...now and then....and as they only deal in money, it is that they call for...and it HAS to come from someone elses asset cache.

[dryrot]

Hi

Plus the problem of indebted Governments where taxes simply wont cover expenditure.

Perhaps Madame Lagarde woulde consider paying tax on her earnings as Managing Director of the International Monetary Fund?

http://www.guardian.co.uk/business/2012/may/29/christine-lagarde-pays-no-tax

"As an official of an international institution, her salary of $467,940 (£298,675) a year plus $83,760 additional allowance a year is not subject to any taxes"

Edited July 9, 2013 by dryrot

[Deckard]

If she could make a sound like a bagless vacuum, that would be even more impressive.

+1

Her ramblings have have always been meaningless, but of late she's really embarassing.

What a waste of space.

[thecrashingisles]

+1

Her ramblings have have always been meaningless, but of late she's really embarassing.

What a waste of space.

So much creosote rots the brain.

[Venger]

• a 'credible' assessment of how much capital needs to be pumped into Europe's struggling banks (and then action to fix the problems)

They can't just pump capital into any bank without a corresponding sum being taken from, or booked somewhere else in the form of debt. Such as onto the books of governments which the markets and rating agencies keep their eyes on, looking at the solvency of nations themselves.

It is all too simple to think that central banks have magic powers. They don't. They can create liquidity by creating debt. But this is not the same thing as creating capital.

Any time a central bank monetises an asset by buying it, in essence, with printing-press money, it also creates a liability. Only the market can create capital by valuing assets above liabilities. Turning on the printing presses at a higher speed destroys more wealth than it create.

[Bland Unsight]

EDIT2:

Here we go, the key conclusion of his paper:

...

I would also go on to suggest that the 'stickiness of nominal' wages in a Depression issue is a KEY REASON why King and Ben have chosen the path they have. Unlike the Germans who possibly are working from a different economic history and text.

Bloody good work.

Is our high level analysis that because last time their inflation led them to start a war which ended our deflation, this time round they are favouring deflation whilst we favour inflation...

That's comforting, .

[White Craw]

Lagarde sounding like Hoover

Disappointed, was expecting something about a constant loud annoying whine caused by a bag being full of cr*p

[@contradevian]

Bloody good work.

Is our high level analysis that because last time their inflation led them to start a war which ended our deflation, this time round they are favouring deflation whilst we favour inflation...

That's comforting, .

If by ending deflation, you mean re-arming that is not quite correct, as the UK economy was already recovering.

All they seem to have done is prolong the recession by preventing the (necessary) deflation.

[R K]

America's Great Depression

Murray N. Rothbard

Currently reading this on the Great Depression.

I'd argue the worlds central bankers are repeating the same mistakes as before.

Indeed.

Thinking the depression was over in 1937 and withdrawing stimulus.

They need to keep their combined stimulii foot to the floor this time around.

Ben get's it, but we'll have to see who replaces him.

We're entering the most dangerous point now. Success or war.

[Bloo Loo]

Indeed.

Thinking the depression was over in 1937 and withdrawing stimulus.

They need to keep their combined stimulii foot to the floor this time around.

Ben get's it, but we'll have to see who replaces him.

We're entering the most dangerous point now. Success or war.

and banks failed and recovery ensued...in the US....who I dont think entered the war for 3 more years.

Im sure that printing to infinity will work out just fine and be never ending...of course, any note with infinity printed on it is worth the same as any other note with infinity printed on it...whenever its printed.

[Venger]

If by ending deflation, you mean re-arming that is not quite correct, as the UK economy was already recovering.

All they seem to have done is prolong the recession by preventing the (necessary) deflation.

Yes necessary. All this deflation = bad. What's good then? Keep helping the heavy debtors and the older owners of the assets which have seen crazy HPI?

Thu Jul 11, 2013 9:22am EDT

(Reuters) - Prices for U.S. imports and exports fell in June for the fourth straight month, a sign of cooler economic growth worldwide that could weigh on the American economy and unnerve policymakers.

Export prices fell by 0.1 percent, matching the expectation in a Reuters poll, Labor Department data showed on Thursday.

The drop probably reflects weakness in global demand which has been hit by Europe's debt crisis and slowing growth in China.

Import prices slipped 0.2 percent last month, dragged down by another month of declining costs outside of the fuels category. Petroleum prices rose 0.2 percent.

Prices for both imports and exports have fallen every month since March, the longest such streak since 2008 when the world was mired in a financial crisis.

The drop in prices last month for imported cars and other consumer goods could help some U.S. consumers. However, some economists are worried an environment of weak inflation could raise the specter of deflation. That would be very bad, as deflation entails a spiral of falling prices and wages which is very difficult for central banks to fight.

Economists polled by Reuters had expected import prices to be unchanged last month.

http://www.reuters.com/article/2013/07/11/us-import-idUSBRE96A0GF20130711

We're entering the most dangerous point now. Success or war.

Success = big HPC in Hale, imo, and other parts of the UK. War? No just a whole load of older and over-indebted VI property owners given a reality check. Forced to realise their crash-proof homes have fallen heavily in value.