World economy talk

[Galactus]

Somebody's advice for international governments to do nothing and just ride out this crisis is, by far, the stupidest (pardon my French for lack of a suitable term) advice I've heard, and is reflective of someone's complete lack of economic background. Even a freshman economics student from Barangka Itaas School of Finance (hehehe) won't dare make such a statement.

Oh well, it's a free country after all.

[uls]

Tidus, it comes from here:

As Rates Race to Zero, Printing Presses Gear Up
http://www.cnbc.com/id/28193601

When the Federal Reserve policymakers decide on interest rates Tuesday, investors will probably look one step beyond their decision, to gauge how much money will the Fed be willing to print once it is out of rate ammunition.

PRINT

"The Fed's only option is effectively to 'print money' by crediting the reserve balances held by commercial banks at the central bank," Ashworth also said.

Buying Treasurys would be the biggest weapon that hasn't been deployed yet, as such a policy means the Treasury could pump into the economy as much cash as it needs.

"There's no limit to the amount of money that the Fed can print and Congress can spend," Ashworth said.

[tidus1203]

Galactus instead of hitting out my personality, hit out my idea. Your immaturity is so evident here. Di ka marunong maki debate. Yang ang diperensya ninyo ni sir emanzano. Sir emanzano might not agree with my ideas but he attacks my ideas and not my personality. So instead of sr stupid ako then make your counter argument why I am wrong... But of course I am willing to argue with you in a sensible debate but kung mud slinging lang kaya mo wala ka ngang kewntang kausap and to be honest should just be ignored.

But as you said its a free country...

[Monseratto]

RE:


Well, we will be witness to Obama's estimated $1,000,000,000,000 stimulus

China's $586B stimulus

Europe's stimulus

Japan's stimulus

and maybe even our own stimulus

Let's see how all that will play out

---

global scale fiat money tsunami approaching

Germany's Chancellor Angela Merkel is resisting calls for added stimulus. It would be interesting to see which policies will work over time... Too bad wala ng DEM.

In a recent speech, Mrs. Merkel lambasted the bailout mentality gripping Western leaders and lauded financial discipline, balanced budgets and the ethic of thrift that is especially prevalent in Swabia - the German region where she spoke. She said that every Swabian housewife knows the root of this crisis: "You can't keep on living beyond your means ... We are not going to participate in this senseless race for billions. We have to have the courage to swim against the tide." That is not mere rhetoric.

Germany recently passed a $31 billion economic package, yet its budget remains balanced. Germany is seemingly in good shape to weather the downturn. The government is considering implementing tax cuts to further stimulate the economy. Germany is thus in a better position than other nations such as the U.K., Spain, Italy and France, for example, which have strained their budgets in attempting to stimulate the economy.

In the headlong rush to find an economic panacea, Mrs. Merkel is among few Western leaders keeping a cool head. As the EU moves forward on the Eastern Partnership and other platforms, she must continue to stand firm against the pressure to leverage Germany's - and Europe's - future with government bailout schemes.

http://www.washingtontimes.com/news/...merkels-spine/

[tidus1203]

Tidus, it comes from here:

As Rates Race to Zero, Printing Presses Gear Up
http://www.cnbc.com/id/28193601


PRINT

Hehehehe yep its quite obvious naman where they are getting the money. How could someone with a budget deficit have the budget for all these stimulus and bailouts? The printing press silly!

[tidus1203]

The DEM or Deutsch Mark was one of the most revered currency of its time. The German's are really hawks by nature I guess they learned in the 1920's the destructive power of hyper-inflation. Kudos to the German for resisting the bailouts and the fiscal spending spree that the Keynesians are preaching... Kudos to Peer Steinbruck (German finance minister) for being more sensible with all these reckless spending.

[Galactus]

Well your problem is that you're trying soooo hard to be an economist when in fact you're not. Not even a pseudo-economist. Till now, I'm puzzled where yo get your ideas. (Oldblue comes to mind, hehehe).

And I am hitting at your proposed solutions, because IMO, I think its not workable at all. You're telling us that governments should do nothing and not do pump-priming? Read the column by Dr. Habito again. Andun yung mga arguments why international economies should be stimulated. I would suggest you try to research more and study more, and digest what you read. Knowledge comes with experience and first-hand information, not posting Youtube videos and press releases, economic briefings, etc. I doubt if you've analyzed an actual balance sheet in your life, more so a country's BOP.

So in this scenario, who should be ignored? And debate with me when you come up with really sensible arguments, something from which I could ACTUALLY learn something new. Because up until now, nada.

[tidus1203]

*Galactus. Have I ever claimed here that I am the master and everyone should listen to me? Quote me here that I have ever said that I am a master economist and everyone should listen to me! I am just posting my opinions here.

As for experience, I did analyze company balance sheets afterall you can make better investments and trade if you know more. Basta para sakin, the countries are tackling too much debt for these bailouts. Ever see me complain on China's bailout? I don't because I know China has the money to do the bailout and I know the US does not.

Economics is a social science. So its not like math that 1+1 is always 2. So marami talaga different points of view and I have mine which I have posted here. Even Peer Stienbruck (German finance minister) doesn't like the idea of propping up the economy unecessarily or the bailouts for that matter so it that sense there are credible people on our side of the argument as well. We present our arguments, you guys present yours. Yun lang!

[tidus1203]

Looks like the Russians are joining the CURRENCY DEBASER CLUB! Oh lets all make our currency worthless so that we can pump this economy! Tsk Tsk very short term minded indeed...

http://www.bloomberg.com/apps/news?p...jHg&refer=home

[Monseratto]

With a predicted cut by the feds, dollar is shedding a lot in the past few days. Investors are finding it less attractive...Tuluyan na ba ito mga sirs?

The entire foreign exchange market is suddenly predicting the end of the US dollar with ... the dollar set for a sharp depreciation due to the scale of funding required by the US government to tackle the global financial crisis and the pronounced weakness of the US economy," said economist Derek Halpenny at The Bank of Tokyo-Mitsubishi UFJ in London.

[uls]

hihina talaga ang USD sa ginagawa ng Fed and US govt

Zero interest rate policy (ZIRP)

quantitative easing (flood the financial system with money, easing pressure on banks by giving them extra capital)

Treasury issuing new debt to fund massive US govt spending

pero we also have to watch what other countries are doing to their own currencies

[tidus1203]

With a predicted cut by the feds, dollar is shedding a lot in the past few days. Investors are finding it less attractive...Tuluyan na ba ito mga sirs?

No idea in the short run, basta sakin in the long run ditch the US Dollar. The US has so much debts and they just added a lot this year and heaving all those burdens is never good for the currency. By the way the Euro has gained a lot against the USD last week and this week for a total of 6 days halos 800 PIPS ang inakyat ng Euro... Watch our for the Chinese Yuan... I also like the Japanese Yen (full disclosure: I have a trading position on the Yen so might be natural that I am bias in its favor) in the short run...

[tidus1203]

hihina talaga ang USD sa ginagawa ng Fed and US govt

Zero interest rate policy (ZIRP)

quantitative easing (flood the financial system with money, easing pressure on banks by giving them extra capital)

Treasury issuing new debt to fund massive US govt spending

pero we also have to watch what other countries are doing to their own currencies

That is right uls. In the case of the Japanese Yen though its a very special case. I am sure you know the carry trade story The Euro is IMO still better than the USD but not the currency that I would pick. At least the Germans (who by the way is the biggets user of the currency) are against the stimulus and don't want to leverage their countries balance sheet just to stimulate the EU.

[uls]

i would be watching gold price

and btw, i would like to repeat -- oil has hit bottom at $41

downward pressure on oil price has decreased

upward pressure on oil price has increased --

USD weakness

OPEC cut

non OPEC output decline

[uls]

That is right uls. In the case of the Japanese Yen though its a very special case. I am sure you know the carry trade story The Euro is IMO still better than the USD but not the currency that I would pick. At least the Germans (who by the way is the biggets user of the currency) are against the stimulus and don't want to leverage their countries balance sheet just to stimulate the EU.

yes, the JPY always performs better when the market is anxious

[mazdamazda]

Hehehehe yep its quite obvious naman where they are getting the money. How could someone with a budget deficit have the budget for all these stimulus and bailouts? The printing press silly!

The endless printing press / paper money / etc. comment is getting monotonous & tiring already... if you still haven't got it:

From page 1:

btw, the statement "stocks and paper money can be reproduced endlessly, eroding their worth" is totally misleading. because -

(a) the only way you can reproduce a stock is through a split, where yes, the per-share value is cut in half (or more), but the number of shares you own is doubled (or more) - so the value of your investment doesn't change. or you can issue new stock, which has to come directly out of the unissued equity base of the company, and it doesn't impact any existing owners. so how the heck can you erode the value of a share of stock by reproducing?

(b) the US Fed can only issue new currency by issuing new debt (TBills) to private banks. over a given week they may issue new debt (and increase the money supply) and buy back old debt (reducing the money supply) to the tune of hundreds of millions of dollars. there is a system of checks and balances, and if "Helicopter" Ben was truly printing money like crazy, don't you think the banks would start getting concerned. not to mention every time a country printed money to boost its economy, the resulting hyperinflation absolutely killed that economy. i would like to think that Bernanke and the Fed governors are not complete morons and at least took Econ 101 sometime in college or grad school.

[tidus1203]

SAN FRANCISCO -- Ecuador will default on a second set of bonds, bringing the total it is refusing to pay lenders to more than $60 million, The Associated Press reported Monday. On Friday, Ecuador President Rafael Correa said his country will not pay interest due on its 2012 global bonds, placing them in default.

http://www.foxbusiness.com/story/mar...-bonds-report/

[uls]

those who bought credit default swaps on Ecuador bonds now have a big smile on their faces

[Galactus]

Quote:
Originally Posted by empy
btw, the statement "stocks and paper money can be reproduced endlessly, eroding their worth" is totally misleading. because -

(a) the only way you can reproduce a stock is through a split, where yes, the per-share value is cut in half (or more), but the number of shares you own is doubled (or more) - so the value of your investment doesn't change. or you can issue new stock, which has to come directly out of the unissued equity base of the company, and it doesn't impact any existing owners. so how the heck can you erode the value of a share of stock by reproducing?

(b) the US Fed can only issue new currency by issuing new debt (TBills) to private banks. over a given week they may issue new debt (and increase the money supply) and buy back old debt (reducing the money supply) to the tune of hundreds of millions of dollars. there is a system of checks and balances, and if "Helicopter" Ben was truly printing money like crazy, don't you think the banks would start getting concerned. not to mention every time a country printed money to boost its economy, the resulting hyperinflation absolutely killed that economy. i would like to think that Bernanke and the Fed governors are not complete morons and at least took Econ 101 sometime in college or grad school.

Aha! Never read about this before. Good piece by empy. Couldn't have said it any better.

Consider our contenders:

Ben Shalom Bernanke:

Current Position: Chairman, US Federal Reserve
Academic Qualifications:
Passed the Scholastic Aptitutde Test (SAT) with a near-perfect score of 1590 out of 1600
- AB Economics, Harvard University, 1975
- Doctorate Degree in Economics, Massachusetts Inst. of Technology, 1979

Awards and fellowships
Fellow, Econometric Society (1997)
Distinguished Leadership in Government Award, Columbia Business School (2008)

From Wikipedia:

Academic and government career
Bernanke taught at the Stanford Graduate School of Business from 1979 until 1985, was a visiting professor at New York University and went on to become a tenured professor at Princeton University in the Department of Economics. He chaired that department from 1996 until September 2002, when he went on public service leave. He resigned his position at Princeton July 1, 2005. Dr. Bernanke served as a member of the Board of Governors of the Federal Reserve System from 2002 to 2005. On February 1, 2006, he was appointed as a member of the Board for a fourteen-year term and to a four-year term as Chairman.[13]

In one of his first speeches entitled "Deflation: Making Sure It Doesn't Happen Here", he outlines what has been referred to as the Bernanke Doctrine. [14]

In view of his current position as fed chair, Bernanke also sits on the newly established Financial Stability Oversight Board that oversees the Troubled Assets Relief Program

Bernake's future as Federal Reserve chairman became uncertain on November 21, 2008 when it was announced that President-elect Barack Obama would name Tim Geithner as Treasury Secretary over Larry Summers, leading to speculation that Obama was positioning Summers as Bernanke's successor. Summers was picked to run the National Economic Council. Two Obama advisers said that Summers would be the leading candidate to become the next Federal Reserve chairman should Mr. Obama choose not to reappoint Bernanke when his term ends Jan. 31, 2010. [15] [16]

Economic views

With his predecessor, Alan Greenspan, looking on, Chairman Ben Bernanke addresses President George W. Bush and others after being sworn in to the Federal Reserve post. Also on stage with the President are Mrs. Anna Bernanke and Roger W. Ferguson, Jr., Vice Chairman of the Federal Reserve.He has given several lectures at the London School of Economics on monetary theory and policy and has written three textbooks on macroeconomics, and one on microeconomics. He was the Director of the Monetary Economics Program of the National Bureau of Economic Research and the editor of the American Economic Review. He is among the 50 most published economists in the world according to IDEAS/RePEc.


No-name trying-hard Economist:

Barangka Itaas School of Finance, Mandaluyong City
Papers published: ZERO (but with several posts on finance-related threads. Does that count? )
With 6 units in Economics while in college (Econ 11 and Econ 101)

[tidus1203]

Nope never tried hard to be an economist, they were never the best people anyway when it comes to making money in the markets But I am quite passionate with my ideas on how to IMO better run the economy... Whether you like my ideas or not, its not my concern... Bernanke is a public figure so its natural na makatikim sya ng lait. Pero you Galactus masyadong mo akong minamaliit, pero I won't stoop down your level di na kita mamaliitin din maskin alam ko ikaw mismo wala ka ring naman credo as you said isa ka lang empleyado sa isang kumpanya...