sanvanalona
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@logic thanks for the post. While I think that there is so much lost with the leaving of the eu, it's nice to see your reasoning. Im anxious to see the results here
SpiderK
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the entire global economy is dealing with stagnation, slowing growth, slowing growth in incomes, productivity falling..... all in the face of growing entitlements. ( in all forms and cost - global )
the slowing economies also affect ethnic differences within europe. bottom line, people in u.k. in the long run have no interest in funding anyone else's debt issues ( entitlements ). this is the first real reversal from globalization that was not only manufacturing but global banking ( cross border, over night interbank lending, the growth in debt and spreading of risk regarding entitlements ) .
trump is really running against globalization and so was bernie. many other countries in europe have a long history of not liking each other. so as the euro grew and the intergration expanded once it got political and people in germany and brussels started telling people in france, greece, italy what they should do well many people do not like this in many different countries. so the exit by the u.k. is more damaging in that way as political groups voting for exit can't be stopped by the bankers. the people voted against the fear that was sold before the vote, ya the economy could get slow but it will rebound some day but giving up sovereignty regarding control of ones country and democracy one out .....
the slowing economies also affect ethnic differences within europe. bottom line, people in u.k. in the long run have no interest in funding anyone else's debt issues ( entitlements ). this is the first real reversal from globalization that was not only manufacturing but global banking ( cross border, over night interbank lending, the growth in debt and spreading of risk regarding entitlements ) .
trump is really running against globalization and so was bernie. many other countries in europe have a long history of not liking each other. so as the euro grew and the intergration expanded once it got political and people in germany and brussels started telling people in france, greece, italy what they should do well many people do not like this in many different countries. so the exit by the u.k. is more damaging in that way as political groups voting for exit can't be stopped by the bankers. the people voted against the fear that was sold before the vote, ya the economy could get slow but it will rebound some day but giving up sovereignty regarding control of ones country and democracy one out .....
SpiderK
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milton friedman predicted these event long ago. for the most part his model for monetary policy and globalization is used today. so like him or hate him his chicago school playbook is used. during good times and bad. so understanding things like this can protect you as the playbook is known ..... richard koo from japan in nineties was first central banker who used quantitative easing as japan purchased bonds and held them providing conduit for providing liquidity into the financial markets that presses up asset prices like stocks and homes ( this is being done today since 2007/09 ).
so once q.e. started being used by the central banks in 2009-10 the stock market exploded upward. many people understood what was coming regarding asset prices like stocks or housing ( many large hedge funds purchased b.k. housing from the banks at rock bottom pricing then rented them ).
anyways milton friedman predicted the euro issues long ago. he's a very smart man again i'm against globalization in marketing and want more jobs back in u.s.a but when and if you reverse globalization all of this happened in late 1920's ( market crash ) then global economy sucks donkey balls for 7-8 years. a normal recession last around three years so in the future this will be considered a depression as real job unemployment is very high in many states, countries. well this all played out and countries started fighting each other in the end. so lets hope that part of history at the end of the economic tension does not play out. but it could in europe because they have a long history of fighting.
"The Euro: Monetary Unity To Political Disunity?" - Milton Friedman ( from speech in late 1990's )
...... SAN FRANCISCO - A common currency is an excellent monetary arrangement under some circumstances, a poor monetary arrangement under others. Whether it is good or bad depends primarily on the adjustment mechanisms that are available to absorb the economic shocks and dislocations that impinge on the various entities that are considering a common currency. Flexible exchange rates are a powerful adjustment mechanism for shocks that affect the entities differently. It is worth dispensing with this mechanism to gain the advantage of lower transaction costs and external discipline only if there are adequate alternative adjustment mechanisms.
The United States is an example of a situation that is favorable to a common currency. Though composed of fifty states, its residents overwhelmingly speak the same language, listen to the same television programs, see the same movies, can and do move freely from one part of the country to another; goods and capital move freely from state to state; wages and prices are moderately flexible; and the national government raises in taxes and spends roughly twice as much as state and local governments. Fiscal policies differ from state to state, but the differences are minor compared to the common national policy.
Unexpected shocks may well affect one part of the United States more than others -- as, for example, the Middle East embargo on oil did in the 1970s, creating an increased demand for labor and boom conditions in some states, such as Texas, and unemployment and depressed conditions in others, such as the oil-importing states of the industrial Midwest. The different short-run effects were soon mediated by movements of people and goods, by offsetting financial flows from the national to the state and local governments, and by adjustments in prices and wages.
By contrast, Europe’s common market exemplifies a situation that is unfavorable to a common currency. It is composed of separate nations, whose residents speak different languages, have different customs, and have far greater loyalty and attachment to their own country than to the common market or to the idea of "Europe." Despite being a free trade area, goods move less freely than in the United States, and so does capital. The European Commission based in Brussels, indeed, spends a small fraction of the total spent by governments in the member countries. They, not the European Union’s bureaucracies, are the important political entities. Moreover, regulation of industrial and employment practices is more extensive than in the United States, and differs far more from country to country than from American state to American state. As a result, wages and prices in Europe are more rigid, and labor less mobile. In those circumstances, flexible exchange rates provide an extremely useful adjustment mechanism.
If one country is affected by negative shocks that call for, say, lower wages relative to other countries, that can be achieved by a change in one price, the exchange rate, rather than by requiring changes in thousands on thousands of separate wage rates, or the emigration of labor. The hardships imposed on France by its "franc fort" policy illustrate the cost of a politically inspired determination not to use the exchange rate to adjust to the impact of German unification. Britain’s economic growth after it abandoned the European Exchange Rate Mechanism a few years ago to refloat the pound illustrates the effectiveness of the exchange rate as an adjustment mechanism.
Proponents of the "Euro" often cite the gold standard era from 1879 to 1914 as demonstrating the benefits of a common currency. But the gold standard also had its costs. The period was characterized by declining prices from 1879 to 1896, rising prices thereafter, and sharp fluctuations within each period, especially severe in the 1890s. The standard was viable only because governments were small (spending in the neighborhood of 10 percent of the national income rather than 50 or more percent as now), prices and wages were highly flexible, and the public was willing to tolerate, or had no way to moderate, wide swings in output and employment. Take away the rose-colored glasses and it was hardly a period or a system to emulate.
As of today, a subgroup of the European Union -- perhaps Germany, the Benelux countries, and Austria -- come closer to satisfying the conditions favorable to a common currency than does the EU as a whole. And they currently have the equivalent of a common currency. Austria and the Benelux three have, to all intents and purposes, linked their currencies to the Deutschmark. However, these countries still retain their central banks and hence can break the link at will. Any country that wishes to link to the Dmark more firmly can do so on its own, simply by replacing its central bank with a currency board, as some countries (such as Estonia) outside the EU have done.
The drive for the Euro has been motivated by politics not economics. The aim has been to link Germany and France so closely as to make a future European war impossible, and to set the stage for a federal United States of Europe. I believe that adoption of the Euro would have the opposite effect. It would exacerbate political tensions by converting divergent shocks that could have been readily accommodated by exchange rate changes into divisive political issues. Political unity can pave the way for monetary unity. Monetary unity imposed under unfavorable conditions will prove a barrier to the achievement of political unity.
so once q.e. started being used by the central banks in 2009-10 the stock market exploded upward. many people understood what was coming regarding asset prices like stocks or housing ( many large hedge funds purchased b.k. housing from the banks at rock bottom pricing then rented them ).
anyways milton friedman predicted the euro issues long ago. he's a very smart man again i'm against globalization in marketing and want more jobs back in u.s.a but when and if you reverse globalization all of this happened in late 1920's ( market crash ) then global economy sucks donkey balls for 7-8 years. a normal recession last around three years so in the future this will be considered a depression as real job unemployment is very high in many states, countries. well this all played out and countries started fighting each other in the end. so lets hope that part of history at the end of the economic tension does not play out. but it could in europe because they have a long history of fighting.
"The Euro: Monetary Unity To Political Disunity?" - Milton Friedman ( from speech in late 1990's )
...... SAN FRANCISCO - A common currency is an excellent monetary arrangement under some circumstances, a poor monetary arrangement under others. Whether it is good or bad depends primarily on the adjustment mechanisms that are available to absorb the economic shocks and dislocations that impinge on the various entities that are considering a common currency. Flexible exchange rates are a powerful adjustment mechanism for shocks that affect the entities differently. It is worth dispensing with this mechanism to gain the advantage of lower transaction costs and external discipline only if there are adequate alternative adjustment mechanisms.
The United States is an example of a situation that is favorable to a common currency. Though composed of fifty states, its residents overwhelmingly speak the same language, listen to the same television programs, see the same movies, can and do move freely from one part of the country to another; goods and capital move freely from state to state; wages and prices are moderately flexible; and the national government raises in taxes and spends roughly twice as much as state and local governments. Fiscal policies differ from state to state, but the differences are minor compared to the common national policy.
Unexpected shocks may well affect one part of the United States more than others -- as, for example, the Middle East embargo on oil did in the 1970s, creating an increased demand for labor and boom conditions in some states, such as Texas, and unemployment and depressed conditions in others, such as the oil-importing states of the industrial Midwest. The different short-run effects were soon mediated by movements of people and goods, by offsetting financial flows from the national to the state and local governments, and by adjustments in prices and wages.
By contrast, Europe’s common market exemplifies a situation that is unfavorable to a common currency. It is composed of separate nations, whose residents speak different languages, have different customs, and have far greater loyalty and attachment to their own country than to the common market or to the idea of "Europe." Despite being a free trade area, goods move less freely than in the United States, and so does capital. The European Commission based in Brussels, indeed, spends a small fraction of the total spent by governments in the member countries. They, not the European Union’s bureaucracies, are the important political entities. Moreover, regulation of industrial and employment practices is more extensive than in the United States, and differs far more from country to country than from American state to American state. As a result, wages and prices in Europe are more rigid, and labor less mobile. In those circumstances, flexible exchange rates provide an extremely useful adjustment mechanism.
If one country is affected by negative shocks that call for, say, lower wages relative to other countries, that can be achieved by a change in one price, the exchange rate, rather than by requiring changes in thousands on thousands of separate wage rates, or the emigration of labor. The hardships imposed on France by its "franc fort" policy illustrate the cost of a politically inspired determination not to use the exchange rate to adjust to the impact of German unification. Britain’s economic growth after it abandoned the European Exchange Rate Mechanism a few years ago to refloat the pound illustrates the effectiveness of the exchange rate as an adjustment mechanism.
Proponents of the "Euro" often cite the gold standard era from 1879 to 1914 as demonstrating the benefits of a common currency. But the gold standard also had its costs. The period was characterized by declining prices from 1879 to 1896, rising prices thereafter, and sharp fluctuations within each period, especially severe in the 1890s. The standard was viable only because governments were small (spending in the neighborhood of 10 percent of the national income rather than 50 or more percent as now), prices and wages were highly flexible, and the public was willing to tolerate, or had no way to moderate, wide swings in output and employment. Take away the rose-colored glasses and it was hardly a period or a system to emulate.
As of today, a subgroup of the European Union -- perhaps Germany, the Benelux countries, and Austria -- come closer to satisfying the conditions favorable to a common currency than does the EU as a whole. And they currently have the equivalent of a common currency. Austria and the Benelux three have, to all intents and purposes, linked their currencies to the Deutschmark. However, these countries still retain their central banks and hence can break the link at will. Any country that wishes to link to the Dmark more firmly can do so on its own, simply by replacing its central bank with a currency board, as some countries (such as Estonia) outside the EU have done.
The drive for the Euro has been motivated by politics not economics. The aim has been to link Germany and France so closely as to make a future European war impossible, and to set the stage for a federal United States of Europe. I believe that adoption of the Euro would have the opposite effect. It would exacerbate political tensions by converting divergent shocks that could have been readily accommodated by exchange rate changes into divisive political issues. Political unity can pave the way for monetary unity. Monetary unity imposed under unfavorable conditions will prove a barrier to the achievement of political unity.
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SpiderK
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Alan Greenspan ( June 24th 2016 ) Again personally i did not like alan greenspan's action as fed head but when you read his comments below you understand he's not holding back on issues today. the scary thing is that the global economy has seen many issues in the last 30-40 years that greenspan witnessed. s.american banking crisis, usa s and l banking crisis, ussr default triggering long term capital default that triggered massive drop on wall street. the 2001 tech bubble, 2007/2008 crisis that is still unfolding. so what is really unfolding is the second chapter of the 2008 debt crisis as trade and globalization are affected because of political fallout across the globe. and all of this happened before world war 2 over a span of ten years. a reversal in trade and financial agreements because of nationalism regarding jobs and the cost of pensions and s.s. and the very large reduction ( haircut ) in entitlements. if anyone thinks they are getting 100% of your entitlement your crazy. everyone is broke and they are not fundable. a state like illinois we pay around 30%-40% in juice / interest payment on our pension funding and budgeting because the banks issue more debt towards budgets and paying bills etc .... so it's at the point with real growth slowing in many economies people are voting circle the wagons, stop paying other peoples bill's in the e.u., we will make new trade agreements on our terms, and we will jumpstart our manufacturing. but as these trade agreements get unwound, someone gets fucked over because in finance or manufacturing people made long term bets regarding productivity. ( the bankers get smashed as globalization reverses because as people, businesses default as currency trades, letters of credit for trade, all end and the bankers sit on mega loses as trade flows crash over time . )
" The global economy is suffering from even bigger woes than the decision by U.K. voters to leave the European Union, Former Federal Reserve Chairman Alan Greenspan said Friday.
”This is just the tip of the iceberg,” Greenspan said in an interview on CNBC. “The global economy is in real serious trouble.”
The rejection of British voters of the status quo in Europe was fueled by a “massive slowing” in the growth rate of real incomes that is widespread across Europe, Greenspan said. This, he said, is creating serious political problems that are not easy to resolve. Behind the slowdown in income is the sharp drop in worker productivity, according to Greenspan. Governments have to cut entitlements to reflect this weakness, he said. The biggest concern is not a recession, but stagnation, the former Fed chief said.
“The euro-area…is failing,” Greenspan said.
“Greece is in real serious trouble and it is not going to continue in the euro very much longer irrespective of what is going on currently,” he said. Asked what he would do if he was still Fed chief, Greenspan said: “I would worry.” “This is the worst period I recall since I’ve been in public service,” he said. “There is nothing like it,” he said, including the 23% drop in the Dow Jones Industrial Average on a single day in October 1987. The former Fed chairman said that the root of the "British problem is far more widespread." He said the result of the referendum will "almost surely" lead to the Scottish National Party trying to "resurrect Scottish Independence." Greenspan said the "euro currency is the immediate problem." While the euro and the euro zone were major steps in a movement toward European political integration, "it's failing," he said.
"Brexit is not the end of the set of problems, which I always thought were going to start with the euro because the euro is a very serious problem in that the southern part of the euro zone is being funded by the northern part and the European Central Bank," Greenspan said. Even with that in mind, the European Central Bank is limited in what it can do because these fundamental problems like the stagnation of real incomes don't have easy solutions, Greenspan told CNBC. "There's a certain amount that monetary policy can do, but our problem is fundamentally fiscal," he said, adding that this is true in the United States as well as "every major country in Europe." Part of the problem is that the "developed countries are all aging very rapidly," which is leading to a higher ratio of government spending in the form of entitlements, Greenspan said. The 90-year-old Greenspan presided over the Federal Reserve for 19 years, starting with the administration of President Ronald Reagan through that of George W. Bush.
" The global economy is suffering from even bigger woes than the decision by U.K. voters to leave the European Union, Former Federal Reserve Chairman Alan Greenspan said Friday.
”This is just the tip of the iceberg,” Greenspan said in an interview on CNBC. “The global economy is in real serious trouble.”
The rejection of British voters of the status quo in Europe was fueled by a “massive slowing” in the growth rate of real incomes that is widespread across Europe, Greenspan said. This, he said, is creating serious political problems that are not easy to resolve. Behind the slowdown in income is the sharp drop in worker productivity, according to Greenspan. Governments have to cut entitlements to reflect this weakness, he said. The biggest concern is not a recession, but stagnation, the former Fed chief said.
“The euro-area…is failing,” Greenspan said.
“Greece is in real serious trouble and it is not going to continue in the euro very much longer irrespective of what is going on currently,” he said. Asked what he would do if he was still Fed chief, Greenspan said: “I would worry.” “This is the worst period I recall since I’ve been in public service,” he said. “There is nothing like it,” he said, including the 23% drop in the Dow Jones Industrial Average on a single day in October 1987. The former Fed chairman said that the root of the "British problem is far more widespread." He said the result of the referendum will "almost surely" lead to the Scottish National Party trying to "resurrect Scottish Independence." Greenspan said the "euro currency is the immediate problem." While the euro and the euro zone were major steps in a movement toward European political integration, "it's failing," he said.
"Brexit is not the end of the set of problems, which I always thought were going to start with the euro because the euro is a very serious problem in that the southern part of the euro zone is being funded by the northern part and the European Central Bank," Greenspan said. Even with that in mind, the European Central Bank is limited in what it can do because these fundamental problems like the stagnation of real incomes don't have easy solutions, Greenspan told CNBC. "There's a certain amount that monetary policy can do, but our problem is fundamentally fiscal," he said, adding that this is true in the United States as well as "every major country in Europe." Part of the problem is that the "developed countries are all aging very rapidly," which is leading to a higher ratio of government spending in the form of entitlements, Greenspan said. The 90-year-old Greenspan presided over the Federal Reserve for 19 years, starting with the administration of President Ronald Reagan through that of George W. Bush.
sanvanalona
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Trump is not running against globalization, are you aware that he is a global business man? He has much to lose in a non globalize do world.
SpiderK
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he's talking about tariffs of 30-40% this is also called beggar thy neighbor in economics and has been used many times as a trade weapon.
the usa needs job's.
you can't sell a product into china without 60% or more tariff. my friend sold printing equipment and faced these issues. it's the reason caterpillar built all its manufacturing plants in china. those machines are not the same quality and almost all equipment was sold in china for the massive manufacturing boom and construction boom over the last 7-10 years. china consumed more concrete in three years than the u.s.a did in the entire 20th century .... but they force companys to build products in china so they can sell them.
so it's really not free trade from the start. many business export from china so places like home depot love china they are making a killing. so ford, home depot, all the large corp's are very pro free trade but if your a small business you can't build something in usa with our taxes, cost of living, wages and compete against home depot buying shovels in china for pennies on the dollar.
so people all across the globe are dealing with jobs issues and wages that are not growing. a healthy economy has growth of 3%, wage growth / productivity, and we do not have this. but the debt overhang has grown as wages have crashed. so we can't fund liabilities that are expecting normal 3% growth as the entitlements grow.
the usa needs job's.
you can't sell a product into china without 60% or more tariff. my friend sold printing equipment and faced these issues. it's the reason caterpillar built all its manufacturing plants in china. those machines are not the same quality and almost all equipment was sold in china for the massive manufacturing boom and construction boom over the last 7-10 years. china consumed more concrete in three years than the u.s.a did in the entire 20th century .... but they force companys to build products in china so they can sell them.
so it's really not free trade from the start. many business export from china so places like home depot love china they are making a killing. so ford, home depot, all the large corp's are very pro free trade but if your a small business you can't build something in usa with our taxes, cost of living, wages and compete against home depot buying shovels in china for pennies on the dollar.
so people all across the globe are dealing with jobs issues and wages that are not growing. a healthy economy has growth of 3%, wage growth / productivity, and we do not have this. but the debt overhang has grown as wages have crashed. so we can't fund liabilities that are expecting normal 3% growth as the entitlements grow.
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Seamaiden
Living dead girl
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I was waiting for someone to suggest Putin the cat back in the bag, so to speak. It's gonna get really interesting now.
I find it amusing that the main reasoning behind leaving the EU was too many immigrants. By one of the greatest colonizers on earth. Tables flipped much?
mancdank
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Lol same old same old when all that colonising went on it was the wat of the world and it truly was dog eat dog so I ain't guna apologise for stuff that happens before any of our life times any more than I would blame the Mongols Alexander the great or the Italians for the romantic empire. But when it comes to England I guess it's a different matter. Granted immigration was a major part of it but a long shot away from the full picture. Imo logic nailed it with his post. Also kinda proves a point all the hater comments from people that aren't from the uk some aren't even from the EU so ask your self why do u think so many millions of hard working people wanted out and the answer is simple the EU was taking the piss we want our country back and for it to be run by elected people from its own land !
Seamaiden
Living dead girl
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So since my perspective is different, I'm a hater? C'mon, ain't you got anything better than that?
My main point is to do with Putin. He is a force to be reckoned with and he's got resources the UK does not.
My main point is to do with Putin. He is a force to be reckoned with and he's got resources the UK does not.
mancdank
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Lol no the comment of hater wasn't aimed at u :) it a some of the previous comments been made from other people
mancdank
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And tbh I kinda like Putin for a few different reasons I wish we could have a guy with such resolve running this broken place
Seamaiden
Living dead girl
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I have a very different opinion of him, but then, I remember Soviet Russia. :)
mancdank
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From what I've seen and heard he seems to actually have the interests of his own people at heart and won't take any bs. England has been short of such a person in a long time.
Seamaiden
Living dead girl
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Funny, from what I've read it's the exact opposite. He's more like Donald Trump.
mancdank
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Lol tbh I can see a resemblance in the way what u see is what u get where as that Clinton women has got a real sneaky smerk I wouldn't belive a word that come out of her mouth buy I guess all politicians are cut from the same cloth
mancdank
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:)
mancdank
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Don't get me wrong it's a bit ropey the cold but he's offered more than the EU has and we've not had to give him a penny :)
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