zundel

Friday 127

Mortgaging the nation

Filed under: Economy, Politics, Society — Tags: , , — zundel @ am

Obsessive Housing Disorder” by Steven Malanga in City Journal Spring 2009

The program could not work because it tried to solve a problem of wealth creation through debt creation.

Tuesday 322

Long-term albatrosses

Filed under: Economy, Politics — Tags: , , — zundel @ am

Good to read Friedman in these times:

On G-20 and GM: Economics, Politics and Social Stability by George Friedman in Stratfor 2008-11-17

short-run solutions can easily become long-term albatrosses.

So, we can bailout the US car manufacturers and spare the economy the consequences of many unemployed workers and devastated suppliers, but thereby we postpone much too long needed improvements in the industry.

I suspect the difficult, wise, and unlikely approach would come in supporting the employees and suppliers, and letting the industry fall-down to an appropriate size. But GM, Ford, Chrysler, and the UAW want to keep as much as they can, and get as much as they can, though it will saddle the US with an obsolete industry. Does anyone lobby for the wise choice?

(I drive a Toyota.)

Sunday 320

As explained to a Queen

Filed under: Economy — Tags: — zundel @ pm

A nice simple explanation of the financial crisis, and quite funny:

Good question, Ma’am” by Alan Beattie in The Financial Times 2008-11-14

The credit ratings agencies thought—actually, it is pretty hard to work out what in God’s name the credit ratings agencies were thinking…

Saturday 319

Intervention

Filed under: Economy, Politics — Tags: — zundel @ pm

The Political Nature of the Economic Crisis” by George Friedman from Stratfor 2008-09-30

…when the chips are down, the state trumps the markets.

Wednesday 316

G20 summit

Filed under: Economy, Politics — Tags: , , — zundel @ pm

Emerging economic powers, like China, might get stronger influence at the International Monetary Fund (IMF). Beyond that nothing happens.

G20 summit: New world order?” by Stephen Foley in The Independent 2008-11-12

“The truth is that national regulators failed, but national politicians don’t want to be blamed, and so they blame a lack of international co-ordination and respond by calling an international summit.”

Tuesday 315

Bretton Woods 2

Filed under: Economy, Politics — Tags: — zundel @ pm

The United States, Europe and Bretton Woods II” by George Friedman and Peter Zeihan from Stratfor 2008-10-20

… gold was actually replaced by the U.S. dollar. … Whereas before, the greatest limiter was on the availability of gold, now it became — and remains — the whim of the U.S. government’s monetary authorities.

Relying on a currency [euro] that is not in the hands of a sovereign taxing power, but dependent on the political will of (so far) 15 countries with very different interests, does not make for a reliable reserve currency.

The net effect would be to create an international bureaucracy to oversee global financial markets.

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