As I said yesterday … we are a few herejes..que discussed the flexible changes. The BW agreements (but all ideas of Keynes not only those applied at the end …)
showed you a few ideas that I have commanded in another Rankia post … to improve them , discuss them or cancel them … .basadas in economic history (what I know), more or less what was done after 29. also also warning that will be slow to implement.
– First to be a balance sheet recession (R.Koo) that only occurs every 80 years, it is necessary to soften the deleveraging, promoting investment, the only way is to create a new European industrial mixed banking credit to entrepreneurs and companies with well – planned industrial projects (priority is the re – industrialization of Europe)
– The second step is a new global standard agreements B_W to put order to the financial architecture.
– The third step is to assess the meritocracy both public and private companies, who show up wages to meet goals and solve quin propose effective measures to reduce expenditure on luxuries ….
-The fourth step is state incentives for innovation (following the case of Finland)
-the fifth step is education and training (also following the case of Finland) It should encourage education by creating more joint training schools, giving the possibility to the unemployed (the picture is two years more unemployed) training grant already paid when they find work.
There are more solutions I leave for another day.
greetings and thanks for “re – discuss”
“Study the past if you want to predict the future” Confucius (551 BC-478 BC) Chinese philosopher.
NEW ORDER NEW CURRENCY. In the new Bretton Woods will attack the issue of coins, because they are absolutely all manipulated; and those that can not be manipulated as Greece (or are manipulated to other convenience Germany and France) can not escape the mousetrap.
China devalued the yuan to flood the world with knickknacks. USA devalues low for China do not eat so they can empty their stocks interests. Europe rate their currency in an expensive place, just as dearly as possible where Germany still selling well which produces and cheap oil comes out you need to buy. Meanwhile the squeaks Mediterranean. It will collapse when tourists realize that it is cheaper to spend a weekend in the Caribbean than in Benidorm.
It implemented a new currency must be global in nature; well as currency itself or as a reference standard for all world currencies. All transactions, at least international, can be measured in that currency or pattern. It should be as democratic and fair as possible; be available and reach; not exclusive to countries with certain natural resources; the most impervious possible fraud, forgery and indiscriminate printing; easy to measure, divide or multiply; genuine without nuances and subjective judgments. In addition to all the benefits we can imagine.
I know only one that could meet these requirements better than any other that I have occurred: the Watio. Because a watt produced by the particle accelerator or by a central African with bicycle dynamo has exactly the same value and are fully exchangeable with each other . Here is the key because who today changes one euro equivalent Sudanese pounds? No one. But if a delivery Sudanese me 10 watts of energy in the form to be approved, I have no excuse to marginalize trade.
So many examples could be presented. Because watio is incorruptible, unaware of the fraud. It is perfectly measurable anywhere in the world. It is impossible to devalue or artificially appreciate over another watt produced elsewhere. It is also impossible to create false watts. It has defense mechanisms that replicates tampering attempts with a frightening electric shocks.
Which has a watio has something real. It has energy that allows you to eat, move, shelter, etc., etc. It has a portion of the universe itself. Which it has a dollar or euro or rupee, has only a promise to pay someone relatively reliable. There is no comparison possible.
Pedaling 40 minutes in a 75 watt bicidinamo injected to the mains; equivalent to a lentil dish energy. Therefore, each in its own way, production and benefits are available to all social classes and countries, without discrimination.
Finally, physicists say that energy is neither created nor destroyed, which is true; but I can assure you that the sun will shine and the earth rotating at least the next five thousand years. Therefore wind, light and heat, at least, as generators watts would be in that plane inexhaustible. Not gold, oil or anything else capable of being easily quantifiable currency or pattern that can happen to them.
At the same time the watio is a commodity, unlike gold is useless, just to dig the earth and bury him in voler safes. Then it will be watio also valuable, useful for people. Also abundant and inexhaustible. It would then be best suited to measure any good or service because absolutely everything (except the emotions), is energy.
I’m not quite agree with several of the ideas in this post spears. First, it is true that in the euro area a fixed exchange rate between currencies was adopted, setting the parity of each with the common currency. I understand that the idea here is that you throw it makes little sense to maintain fixed exchange rates when economies of different countries are independent. Well, as usual, I think you’re partly right but not quite right.
The process that avalanche is true: if an economy grows more than another, it is normal that its currency revalue, either because they increase their exports (increases demand for that currency to pay these exports) or because international investors want buy that currency to invest in that country (because they have confidence in higher profitability for your investment, given that the economy is growing). In either case, the mechanism is the same: it increases the demand for that currency, and its price (the exchange rate) rises. This is what happened, for example, with the economy of the Netherlands in the 70s when the oil fields of the North Sea were discovered: Netherlands began suddenly become oil exporter, so they entered currency in the country, its currency it was noted, and exports lost competitiveness.
Well, that’s what the theory tells us … but what happens if the central bank of that country is set to “print money”? That is, it conducts an expansionary monetary policy. In that case, it is increasing the supply of that currency, which may even offset rising demand for the currency on international markets. In that case there would not be appreciation of its currency at all! An example of this is found in China to offset its huge exports, it conducts an expansionary monetary policy, which compensates external demand for its currency. Thereby artificially it keeps the value of its currency.
We might think that in this case, as you say in the beginning “In the same way we can keep financial markets isolated from what happens in the economy, until suddenly collapse to fit, we conclude that we can maintain the exchange rates outside the assessment of the various economies, for a time through the intervention of central banks and monetary policies. However, at the end adjustments are dramatic. “In the case of monetary policy carried out by China, I find it hard to understand how on earth can the speculators for the yuan” undergoes a dramatic adjustment “that takes you to appreciate , against the wishes of the Chinese government. Because for the Chinese Central Bank, the way of acting is very simple: give the little machine to print tickets. You do not know if you think of anything, but the fact is that for more than 10 years ago China carried out this policy and speculative attacks have not been seen anywhere. If you can think of some mechanism so that the “dramatic setting” occurs, I’d appreciate it compartieses with everyone.
I put this out because, from what I understand in your post, planteas that the only solution to the current crisis in the economy of EMU is the disappearance of the Euro as the single currency as well as the devaluation of the currencies of economies that leave EMU. But this is not so simple. Central banks and governments have sufficient mechanisms to prevent this from happening. In your previous post, I suggested three mechanisms that Greece did not have to leave the Euro: tax coordination at European level, rate hike by the ECB, and default of Greece without leaving EMU policies. Today I look at the news, and there was an additional mechanism that had escaped me: it turns out that the ECB has announced it will buy Greek sovereign debt markets. Come on , what it is the ECB announced that it will have no qualms about giving the ” little machine to make tickets” to buy the amount of Greek debt it takes. And against this I think that speculators have little to do.
What I’m trying to explain is that what usually happens is that the value of currencies in international markets do not reflect, even remotely, the valuation of the respective economies. It is so easy for central banks give the little machine and print tickets, none is, in practice, act freely willing to let the forces of supply and demand. Therefore, manipulations are constant, and the only restraint to them is the “political” power of the various governments (ie, the ECB will print tickets with the only brake not get to devalue both its currency and to seriously harm the exports USA and Japan). It is therefore impossible to say that, in the long run, there is always a “dramatic setting” bearing quotations of currencies at breakeven say “natural”.
Having said all this, what does annoys me enough is that the ECB has left to speculators for 15 days. He has let them win handfuls paste because the announcement that would buy Greek debt could have done much earlier, thus avoiding a very tough adjustment to the Greek people. It is as if to say speculators gentlemen, we will allow them to win a big bucks for a while (at the expense of the Greeks, of course), but from now on the gravy train is over. Things to think right?
Nerua, an expert on energy engineer, interested in economics and finance recommended this book; The Future of Money: Financial Crisis of public resources, Mary Mellor who proposes a public and democratic future for the money. The priority is the structuring of the monetary and banking system for providing a service fair and environmentally sustainable manner.
..tengo a review on my blog.
I believe in the stock market go from euphoria to panic and panic to euphoria in as little sobering.
Surely it is that the ends (abundance of money, boyante..hay situation very high benefico margins in the bag) and at the other end (in case of very severe crisis, there are other ways of ganr too much money in the bag ) .. certainly when you win less is the “quiet” … .es seasons as the dollar (too high or too low) extreme positions has tools to get away with intermediate positions … but not advance …
Hi again Thomas,
forgive me extend much, but I think it should be clarified that the Bretton Woods agreements which are not really implemented flexible exchange rates, but a “dollar standard” (incidentally, against the view held by Keynes). When you comment that “multilateral mechanisms for fixing exchange rates to try to avoid previous shortcomings of a system of fixed exchange rates and based on the gold standard” implanted gives the impression that at that conference which was implanted were flexible exchange rates, when in fact that’s not true. I think it should explain.
As I say, what actually happened at Bretton Woods was that the “gold” was changed to a “dollar standard”. He established the dollar as the international reference currency, with a fixed relative to gold (anyone could go to the Federal Reserve US dollars, and request to be changed for gold according to the fixed parity) parity. And, for all other currencies it is established parity against the dollar fixed but adjustable (that parity would be reviewed periodically). It is therefore not true that in Bretton Woods flexible exchange rates were adopted.
What happened with the adopted system is what Keynes said when the conference ended, that this system was not viable long term. First, because, despite being types of “adjustable” change established fixed exchange rates at the level of major world currencies (which made them prone to speculative attacks). Second, because the United States took advantage of its status as reference currency printed every dollar that gave the win to finance its budget deficit, which came a time when he could not guarantee the convertibility of the dollar into gold (De Gaulle threatened to USA in the early 60s to get all the dollars that had the Central Bank of France on a boat, send it to USA and ask to be moved by Ingots gold).
When the era of flexible exchange rates really begins is when bankruptcy Bretton Woods system: when President Nixon acknowledged in 1971 that the dollar was not convertible and would fluctuate freely in the foreign exchange market.
Totally agree, Ramon13. Today is the stock market and 15% up anyone will care to find out who has bought securities last week massively? There are people who have become rich in one day, thanks to the manipulations of friend Trichet. And all at the expense of the Greeks. Am I going to say now that the ECB could not have started buying Greek sovereign debt 15 days ago? We could have avoided bailout plans, adjustment plans … But of course, many sharks have stopped winning pasta.
Trichet, let yourself see for Greece, you’re sure to make a monument. On the Acropolis, at least.
Keynes defended the British position, a more democratic position worldwide but the sight of Use, which favored him more by dollar hegemony imposed reference value. We refer to the original ideas of Keynes (Bancor, drawing rights) not the final solutions imposed B_W.
The current account has it that the difference between imports and exports of goods and services and there is the entrance or exit of capital. If we are in a type of change Fijo the current account can not be balanced with an increase in the price of imports and reduced export prices, so rebalancing occurs by having an increase in interest rates on external financing.
In Spain, every time we are demanding higher by refinanciarnos foreign doubt … being the ECB with low rates can kinds get by ..but there is a limit … the EU so we demands a fiscal austerity plan that allows us to get in the future a current account surplus …
the rescue plan based on inflation or ransoms paid by Germany has a limit … .quieren empelar 750.000 million that the finance ministers of the European Union to protect the euro.
Poruqe 15.dias does not act so avoiding especualción … why elections in Germany ?? If all has not gone well, have they lost …
The end result of the negotiations provided a much closer international monetary system proposed by the US that advocated by Keynes, which is not surprising given the dominant position of the US at that time .
Both plans agreed on a number of key points. First, both plans rule out the possibility of introducing a system of freely floating exchange rates , given its adverse effects on the world economy during periods when the system was in force, especially before World War I and during the years 30. Secondly, it was considered inadvisable implementing a system absolutely fixed exchange, given the unfavorable experience gained during the restoration of the gold standard in the period 1925-1931.
there were points of disagreement between the two plans.
First it should be noted that produced by the concern of the British plan in the allocation of national economic policies and domestic goals, especially the goal of full national employment. In this context, the exchange rate should be a variable that could be altered to make it compatible with the goal of full employment. On the contrary, the American plan pursued as a priority the stability of exchange rates, so that they could be changed only in exceptional circumstances of rare character.
The British and American plans differed in the design of the mechanism through which liquidity should be provided to the system in general, and countries with balance of payments problems in particular. Thus, the Keynes Plan supported the creation of an institution whose performance was closer to that of a national central bank.
The monetary system then changes the pattern established gold, was a version of the gold standard in which central banks using international reserves as gold and the dollar. An oscillation of ± 1% between the market exchange rate of a currency and its parity is allowed.
The SBW was a system of fixed but adjustable exchange in international reserves consisted of gold and dollars convertible into gold.
Rising inflation in the US, deteriorating balance of payments current account and budget deficits led to private speculators in late 1967 and early 1968, anticipating a possible devaluation of the dollar against the official price of gold . This led to massive purchases of gold on the private market
The asymmetry of the system should compensate the obligation to USA to buy and sell gold. In practice, this was not the case, either because other countries were willing to keep their reserves in the form of dollars, or because since 1971 the dollar stopped being convertible into gold. With frame floating since May 1971 with a strong deficit in the trade and basic scales USA, the dollar came under speculative attack in mid 1971. In these circumstances, the August 15, 1971, President Nixon announced the formal suspension of dollar convertibility into gold was when the SBW became a “dollar standard”, ie a monetary system in which the dollar would be well used as a reserve.
Man, not trying to be especially rigorous.
you are right in the system for setting exchange rates. It is what I put in the post as “The intermediate situation is usually given that it is based on variable rates of exchange, (but within a variation range). The graph would place the exchange rate over several rails. In this sense a fluctuation within certain limits permitted. In this regard the fact that one day we find a story that speaks of the devaluation of the currency, is simply to move from one rail to another ”
in principle is what touches …
Regarding the options that you raise …
I’m according to the first, (with shades). Obviously equaling conditions throughout Europe, is something that is, but I do not know if we’ll be on time and certainly not something that is moving … obviously here I talk about joint economic policy, including fiscal and monetary and something more …
the default of Greece without leaving, worsen the situation, because it really can not be a broken country with a strong currency (that is what happens to us now)
and the rate hike is completely unfeasible today …. completely because sinks to countries and businesses … think a point … all the debt issued. Scary thought!
By the way, the rise in interest rates, making the currency is appreciating.
Regarding the adopted solution …. It’s a disaster, and do not give me one with the story that is to combat speculation … the view is !.
Who carries the pasta and whoever puts it ?. If this is to fight, that fight against me, and support the speculation …
how are you going to adjust China? … as always … exploding bubbles. It’s that simple.
The problem is that this is nothing more than the gold …
what is now the Watio? .. okay … but no longer a new pattern.
And by the way, with energy also are traded, also speculates and its value also varies …
it’s just the same name …
The problem is that we are always on ….
all ideas are by and for the financial system.
the big problem or challenge is that we leave the financial approach, and think in broader terms.
While the discussion will continue to focus on how to finance, we will never think that …
this is the big problem and is the great drama. This crisis is economic and as we all day around the financial sector, we do not understand is that we have to look for solutions outside the financial sector. And the reform of the financial system must be out of the way …
it ‘s that simple.
I think we have gotten 750,000 million for the “event” on Wall Street Thursday.
That was a crash have denied us and if we realize on Friday the news was that banks were dry. On the other hand, there was the rumor of the lack of liquidity in Europe.
at the end it seems to be entirely true ….
And of course, today it seems that no one has stopped to think about what happened …
but beware that there is much, much danger ….
and when we realize that they have to move 750.000 million, plus the central bank is God knows how many, because such a respectable institution not worthy or tell us how much money will issue …. that’s crazy…
Do not worry, I myself. If instead of 750,000 million needed 7,500,000 million euros, the ECB will draw 10 “machines” over the storeroom and matter settled.
Solution to the crisis it has led us to it:
+ CREATION OF MONEY “nothing”
+ INSANITY ultimately.
It is necessary that banks abandon the outdated system of “fractional reserve”, in short, it involves the potential income NOTHING CREATION
and should limit the performance of central banks, with their “machines” expanders and contraction, deceive the “agents” of the markets when making their investment deciones.
To grow you must generate savings, and that is not done giving the machine to work
2.Acuerdos B_W: adjustable fixed exchange (gold and dollar) Flexibility is equal to the allowed osicliacion
3. Repeal BW: step – dollar standard
of the 5 Ideas 2 are financial … as you say “lest bother “.. you know that we share the same idea that the root of the crisis is economic … and you have to find a solution on economic issues … the problem is that the financial issue is not yet solved either, as always with this patch forward flight.