Joined: Mar 07, 2007 Posts: 320 Location: Holland, United Kingdom (of the seven Netherlands)
Posted: Fri Mar 09, 2007 4:19 pm Post subject: Re: Restructuring the Global Economy
I took the trouble to read that Paper written by Dialynas. Although I do not share his political views (I'm more a socialist) I do agree to most of his economic analysis. A crisis is inevitable.
The problem with his solution is not only its lack of social responsibility (=voters needed to get reelected), but also that he's not profiting from the opportunity that arises.
I see a totally different approach which comes in three phases:
1. extend the maturity of the debt issued; (Silent preparation for what is to come.)
2. attack the dollar: SELL, SELL, SELL that worthless toiletpaper.
Buy undervalued foreign currency, then lower the interest rate. This will start the inevitable crisis that will give you political mandate to rearrange government spending. (Where I would personally prefer to cut in military spending rather than social programs.)
3. After a few weeks and sufficient depreciation of the US$, buy back some dollars to stabilize at a decent exchange rate. Stop the presses;
If all went well you made a good profit at the capital market at the expense of foreign nations and you have reached the necessary exchange rate. This allows you to start paying of your debts.
Posted: Wed Mar 21, 2007 7:37 am Post subject: Re: Restructuring the Global Economy
Gerben wrote:
I took the trouble to read that Paper written by Dialynas. Although I do not share his political views (I'm more a socialist) I do agree to most of his economic analysis. A crisis is inevitable.
The problem with his solution is not only its lack of social responsibility (=voters needed to get reelected), but also that he's not profiting from the opportunity that arises.
I see a totally different approach which comes in three phases:
1. extend the maturity of the debt issued; (Silent preparation for what is to come.)
2. attack the dollar: SELL, SELL, SELL that worthless toiletpaper.
Buy undervalued foreign currency, then lower the interest rate. This will start the inevitable crisis that will give you political mandate to rearrange government spending. (Where I would personally prefer to cut in military spending rather than social programs.)
3. After a few weeks and sufficient depreciation of the US$, buy back some dollars to stabilize at a decent exchange rate. Stop the presses;
If all went well you made a good profit at the capital market at the expense of foreign nations and you have reached the necessary exchange rate. This allows you to start paying of your debts.
Well, this is essentially what several countries have done including The Ukraine who bought back their own debt AFTER it devalued in real and nominal terms during the Russian currency crisis. There is nothing stopping a sovereign from buying back its own devalued debt in the open market, so long as there are willing sellers. Issue debt at 25-30% p.a. and an exchange rate of 4 to 1 and then buy it back when the real yield is closer to 50-60% (or more) and the exchange rate is closer to 6 to 1. But that is a one trick pony. You can only do it once in a while (if you're lucky).
Argentina also forced foreign investors to accept a 65% haircut on their debt. That is accept 35 cents on the dollar or get nothing.
Well, I am not saying you're wrong, but I am not sure who in the USA (specifically) would benefit from a voluntary default only to then mop up the mess later?
Typically these other defaults I mentioned were in the magnitude of $200 billion while the rest of the world economy was 'relatively' stable and growing. Whereas it is hard to imagine the USA economy tanking and some 'supranational' power cleaning up the mess once it starts to unravel?
The orders of magnitude are simply different. What works once or twice for $200 billion against a $50 trillion global economy does not work when the default is $2 trillion or more. See what I mean? _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Sat May 26, 2007 4:44 am Post subject: Re: Restructuring the Global Economy
There will be no need to cut the minimun wage by 50%. Because the rise in the cost of oil will have a massive inflationary effect merely putting a freeze on wages and salaries will be sufficient. More importantly governments need to completely rethink their stratergies. There needs to be a change from globalisation to localisation where goods are manufactured close to where they will be comsumed. Decrease in population growth and economies will have to be considered to limit demands on resources. Will this happen with the present mind-set of our politicians and big business? I dont think so.
Posted: Mon May 28, 2007 6:41 am Post subject: Re: Restructuring the Global Economy
pukeko wrote:
There will be no need to cut the minimun wage by 50%. Because the rise in the cost of oil will have a massive inflationary effect merely putting a freeze on wages and salaries will be sufficient. More importantly governments need to completely rethink their stratergies. There needs to be a change from globalisation to localisation where goods are manufactured close to where they will be comsumed. Decrease in population growth and economies will have to be considered to limit demands on resources. Will this happen with the present mind-set of our politicians and big business? I dont think so.
I am not trying to be rude, but of course this is over simplification in the first place. Locally made goods compete with imports including the costs of transport.
Raise the cost of transport fuels and you will shift SOME production locally where feasible. Cut the supply of transport fuels and you will shift more. But long distance transport will also shift from truck to rail and water transport as well.
Just in time delivery will be replaced by central distribution at railhead or lake head. This drives up inventory costs, but lowers transport fuel consumption.
However, in terms of local production, today, in the face of higher prices, but no shortages of transport fuel, and you literally have more energy being consumed to drive to the local grocery store than food being shipped in tightly packed containers to your local grocery store.
And it may cost more energy to heat your potatoes using an electric stove versus heating the water in an electric kettle first than all the energy needed to produce the food in the first place.
Yes, we can save energy, but not by growing bananas in N. Canada or by raising sheep in the desert just because they are closer to market.
Goods should be manufactured efficiently where they are cheapest including the cost of transport. Availability of transport fuel will dictate where that is. Not governments. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Fri Nov 23, 2007 5:48 am Post subject: Re: Restructuring the Global Economy
Some more naive ideas....
RE moving production to where there is reliable sources of energy versus trying to get renewable energy to densely populated areas...
Quote:
For starters, the wind does not blow all the time. When it does, it does not necessarily do so during periods of high demand for electricity. That makes wind a shaky replacement for more dependable, if polluting, energy sources like oil, coal and natural gas. Moreover, to capture the best breezes, wind farms are often built far from where the demand for electricity is highest. The power they generate must then be carried over long distances on high-voltage lines, which in Germany and other countries are strained and prone to breakdowns.
In the United States, one of the areas most suited for wind turbines is the central part of the country, stretching from Texas through the northern Great Plains — far from the coastal population centers that need the most electricity.
Combining unreliable sources of energy like wind with back-ups such as pumping water to be used later as hydro power like a battery...
Quote:
Sweden has historically invested little in wind projects because it has two reliable sources of energy, nuclear and hydro, which each supply roughly half its power. And because hydro is renewable, Sweden already does well on the environmental balance sheet.
But these energy sources have their vulnerabilities: hydro, to low water levels; nuclear, to technical breakdowns. The Swedish government has also pledged not to build any new nuclear power plants.
"One of the key energy priorities for Sweden is to establish a third leg of energy production," said Anders Nyberg, political adviser in the Ministry of Enterprise, Energy and Communications.
Of course, Sweden does not need to build wind parks to get wind power. It could simply buy more surplus wind power from Denmark, which it uses, as does Norway, to pump underground water into elevated reservoirs. The water is later released during periods of peak electric demand to drive hydroelectric stations.
In this way, hydro acts as a form of storage for wind energy — addressing one of wind power's biggest shortcomings. Sweden's strength in hydro makes it a good candidate for greater development of wind power, according to analysts.
And finally a power station that I visited in Nepal last year where they circumvent the need to a large river to power hydro electric generation by building a deep holding pond, fed by a small river, that then uses gravity to produce hyrdo power....
Quote:
The plant has a capacity of 600 kW and supplies eleven villages and one monastery with electric power. The growing numbers of tourist passing through the area had caused an increase in the demand for fuelwood, leading to alarming deforestation in the Thame valley.
.... there must be examples of other rivers, such as the N. Saskatchewan that flows near our farm that could also use similiar technology to tap its hydro generating potential while minimizing its environmentals impact (and expense) by building a large dam and flooding the surrounding area? But I suppose it comes down to economics and what price point it becomes profitable as opposed to using local nat gas or coal generation?
Just a little mental masterbation this afternoon. Have a nice weekend. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Thu Jan 24, 2008 5:15 am Post subject: Re: Restructuring the Global Economy
shakespear1 wrote:
Mr. Bill it is only Wednesday
Umm, that was two month's ago! ; - ) _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Thu Jan 24, 2008 7:10 am Post subject: Re: Restructuring the Global Economy
shakespear1 wrote:
Hihiii
What happened to the 24 hr. function?
Now I have to look down lists to find the latest posts.
Dunno? I do not usually use it. I am kinda exiled here to Depletion Economics, so I rarely venture out much. Maybe I should not be so timid? ; - )
So anyway today's Headline of Day has to be on Reuters at the moment.
IEA says US very concerned about oil price.
IEA says big consumers concerned by oil price.
But apparently not concerned enough to change their consumption habits, raise fuel standards or keep the US dollar stable? ; - ) _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Thu Jan 24, 2008 8:52 am Post subject: Re: Restructuring the Global Economy
Last night I watched a documetry on the island of Nauru. I've read about this but the visual brought home the message better.
Lots ofdiscarded consumer goods rusting on one end of the island (costly at the time they were bought on the island), no worry about tomorrow attitude, some corruption and friendly foreign experts who advised how to invest their money.
Then came the end to cheap guano which stopped the flow of fabulous money to the islanders.
Next came borrowing to stay on the same plane of consumerism. But when the loans could no longer be paid off by what the island had invest all over the world the Magic Story ended.
Now they have power shortages, high food costs and no land which previously could be used to produce their own. _________________ Men argue, nature acts !
Voltaire
"...In the absence of the gold standard, there is no way to protect savings from confiscation through inflation."
Posted: Thu Jan 24, 2008 10:31 am Post subject: Re: Restructuring the Global Economy
Each and every economic decision has a real consequence. That is why it is sad that the Left pretends economics do not matter. The Right selectively uses pseudo-economic arguments to justify their political expediency. And the voter just wants something for nothing. The bankers just arbitrage between economic reality and political fantasy.
Climate change and resource depletion - specifically post peak oil decline - would not be nearly as scary to contemplate if we would have followed sound economic policies, fiscal conservatism and sustainable development practices. But we did not and here we are!
The blame game is just heating up. Everyone is going to blame the market economy, but the real causes were living beyond our means in every sense - environmentally and economically - poor leadership and an entitlement society! ; - ) _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Tue Feb 19, 2008 1:22 pm Post subject: Re: Restructuring the Global Economy
Nicely put, but don't you think elements of the market economy are part of what encouraged (and still encourage) us to live beyond our means? Do you think the millions of ads that we all see over a lifetime have had no effect on our consumption patterns?
I'm not letting anyone off the hook. Certainly not individuals or the gov. But I'm also not willing to let "the market," corporations, and financial institutions off the hook either. There's plenty of blame to go around, and all can take their healthy share.
Posted: Wed Feb 20, 2008 2:57 am Post subject: Re: Restructuring the Global Economy
dohboi wrote:
Nicely put, but don't you think elements of the market economy are part of what encouraged (and still encourage) us to live beyond our means? Do you think the millions of ads that we all see over a lifetime have had no effect on our consumption patterns?
I'm not letting anyone off the hook. Certainly not individuals or the gov. But I'm also not willing to let "the market," corporations, and financial institutions off the hook either. There's plenty of blame to go around, and all can take their healthy share.
Yes, each and every corporation wants you to buy their product and not someone else's. So the most important words you will ever learn is how to say, 'no, thank you'.
When I see the rich and the beautiful 'wanna bes' and their conspicuous consumption I do not envy their wealth, but I pity them. Not for what they can buy, but for what they buy, and the fact that they need that stuff to feel good about themselves or to think they are better than others. It is really pathetic. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Sun Mar 02, 2008 2:44 pm Post subject: Re: Restructuring the Global Economy
Of course, dear MrBill (not dante), individuals have responsibilities to say no. But keep in mind that more is spent every year in the US on advertisement than on all of higher education. In other words, the US economy places a higher value on getting people to buy than on getting people to think.
As to one of your earlier posts:
Quote:
"I am not trying to be rude, but of course this is over simplification in the first place. Locally made goods compete with imports including the costs of transport.
Raise the cost of transport fuels and you will shift SOME production locally where feasible. Cut the supply of transport fuels and you will shift more. But long distance transport will also shift from truck to rail and water transport as well.
Just in time delivery will be replaced by central distribution at railhead or lake head. This drives up inventory costs, but lowers transport fuel consumption.
However, in terms of local production, today, in the face of higher prices, but no shortages of transport fuel, and you literally have more energy being consumed to drive to the local grocery store than food being shipped in tightly packed containers to your local grocery store.
And it may cost more energy to heat your potatoes using an electric stove versus heating the water in an electric kettle first than all the energy needed to produce the food in the first place.
Yes, we can save energy, but not by growing bananas in N. Canada or by raising sheep in the desert just because they are closer to market.
Goods should be manufactured efficiently where they are cheapest including the cost of transport. Availability of transport fuel will dictate where that is. Not governments."
In spit of snark's praise, this is not one of your better posts (and most of your posts are, IMHO, tops).
Growing bananas in N. Canada??? Is anyone anywhere advocating this?? If so, please cite. This is way beyond straw man--maybe straw whale?
And how about walking or biking to your local food store. Is that still going to expend more energy than the 1500 or so mile trip the average food items travels between farm and food shelf in the US?
The idea of relocalization is not that we can reconstruct our exact life style and get everything we now import locally. No one (besides those trying to deride the concept) has claimed such a thing that I know of. Even though no political leaders seem to have the guts to say it, any hope of a livable future is going to involve some adjustments in how we live. In many ways these could be enhancements--walking to a farmers market to do your shopping involves many more chances for interactions with others, interactions that can counter the chronic isolation and alienation pervasive in the US. See Bill McKibben's recent works for more details.
Relocalization obviously involves a change in what we consume and how often and when we consume it. The idea that we can get anything in the world whenever we want it was never a good one. Yes, distribution systems are going to change, and total relocalization is doubtless both undesirable and unlikely to occur. The idea is to move toward getting more of what we need locally, and reconsidering what we merely want that cannot be gotten locally.
This obviously gets into larger issues than can be developed here, and I don't hold you responsible for knowing all the nuances of the latest thinking in the relocalization movement.
But please don't assume that all urging for more localized economies are complete and utter idiots who want to grow bananas in N. Canada and drive Hummers to Whole Foods to buy them. As you point out, rising energy prices are going to lead to some more localization anyway. It's time to think about that transition more systematically, and it is way past time to re-think our I-can-have-any-thing-I-want-from-anywhere-anytime economy.
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