Discussion Topic |
|
This thread has been locked |
Ghost
climber
A long way from where I started
|
|
Apparently the Shanghai and Peking stock exchanges were down significantly today. I believe something around 8%?
Over the last four weeks, the Chinese stock market is down by almost one third.
But before you start looking at "a 33% fall in a single month" as a signal that the world is about to end, remember that even after the 33% drop, the Chinese stock market is still up 75% year-over-year.
And also remember that the Chinese stock market is a far less significant part of the Chinese economy than the US stock market is of the US economy, or the European markets are of the European economy.
That dramatic drop over the last month signifies something entirely different for China than it would in North America or Europe.
|
|
jstan
climber
|
|
|
Topic Author's Reply - Jul 8, 2015 - 09:30pm PT
|
The St.Louis Fed has data on Yuan USD exchange rates.
Since 2005 the value of the dollar relative to the Yuan has increased by 25%. Chinese goods are 25% more expensive. Six Yuan per dollar was as it used to be in 1994. Eight Yuan per dollar made it easy to buy Chinese goods. I think I have that right.
|
|
Jan
Mountain climber
Colorado, Nepal & Okinawa
|
|
I listened to part of the Greek prime minister's speech to the EU and I did have sympathy for him when he said he had only been in office five months and these problems were five and a half years in the making. It seems to me he is in a position similar to Obama when taking office and dealing with a crash created by the previous administration. Fortunately even when things are dire, the U.S. still has resources to work with.
On the other hand there is an article in the New York Times today about Greeks going on a spending spree to try to have durable goods when the government devalues or taxes away a large part of bank savings as Cyprus did in a similar situation. They are buying everything from gold jewelry to cars to major appliances. This for me symbolizes the problem. For them to have that kind of money stashed away in their houses instead of the banks and paying honest taxes, is a large part of the problem. It reminds me a lot of the peasants in Nepal who had no money to educate their children yet could buy gold jewelry and sponsor lavish weddings.
Mentally, the Greeks have not yet entered the modern world. Of course sandwiched in between Serbia and Turkey doesn't help nor being separated from the rest of Europe by the sea.
|
|
Brokedownclimber
Trad climber
Douglas, WY
|
|
Ken-
It isn't necessarily the conservative approach, but the Bankster approach.
The word compassion does not exist to International Bankers...
It's all about CONTROL. They want the Greeks to "toe the line."
|
|
Jan
Mountain climber
Colorado, Nepal & Okinawa
|
|
It's said that they also want cheap water front property down there.
|
|
John Duffield
Mountain climber
New York
|
|
well, I heard it's up 75% in the last year. Has to be grossly overbought. Somewhere in there, is a climbing analogy, like the higher you climb the further you fall.
|
|
Brokedownclimber
Trad climber
Douglas, WY
|
|
Don't forget about the depth of the resulting crater!!!
|
|
Craig Fry
Trad climber
So Cal.
|
|
Austerity Has Failed: An Open Letter From Thomas Piketty to Angela Merkel
Five leading economists warn the German chancellor, “History will remember you for your actions this week.”
July 7, 2015
http://www.thenation.com/article/austerity-has-failed-an-open-letter-from-thomas-piketty-to-angela-merkel/
The never-ending austerity that Europe is force-feeding the Greek people is simply not working. Now Greece has loudly said no more.
Global campaign group Avaaz organized this open letter to Angela Merkel on the back of a petition, signed by over half a million Europeans, demanding an end to the failed austerity program in Greece.
As most of the world knew it would, the financial demands made by Europe have crushed the Greek economy, led to mass unemployment, a collapse of the banking system, made the external debt crisis far worse, with the debt problem escalating to an unpayable 175 percent of GDP. The economy now lies broken with tax receipts nose-diving, output and employment depressed, and businesses starved of capital.
The humanitarian impact has been colossal—40 percent of children now live in poverty, infant mortality is sky-rocketing and youth unemployment is close to 50 percent. Corruption, tax evasion and bad accounting by previous Greek governments helped create the debt problem. The Greeks have complied with much of German Chancellor Angela Merkel’s call for austerity—cut salaries, cut government spending, slashed pensions, privatized and deregulated, and raised taxes. But in recent years the series of so-called adjustment programs inflicted on the likes of Greece has served only to make a Great Depression the likes of which have been unseen in Europe since 1929-1933. The medicine prescribed by the German Finance Ministry and Brussels has bled the patient, not cured the disease.
Together we urge Chancellor Merkel and the Troika to consider a course correction, to avoid further disaster and enable Greece to remain in the eurozone. Right now, the Greek government is being asked to put a gun to its head and pull the trigger. Sadly, the bullet will not only kill off Greece’s future in Europe. The collateral damage will kill the Eurozone as a beacon of hope, democracy and prosperity, and could lead to far-reaching economic consequences across the world.
In the 1950s, Europe was founded on the forgiveness of past debts, notably Germany’s, which generated a massive contribution to post-war economic growth and peace. Today we need to restructure and reduce Greek debt, give the economy breathing room to recover, and allow Greece to pay off a reduced burden of debt over a long period of time. Now is the time for a humane rethink of the punitive and failed program of austerity of recent years and to agree to a major reduction of Greece’s debts in conjunction with much needed reforms in Greece.
To Chancellor Merkel our message is clear; we urge you to take this vital action of leadership for Greece and Germany, and also for the world. History will remember you for your actions this week. We expect and count on you to provide the bold and generous steps towards Greece that will serve Europe for generations to come.
Sincerely,
Heiner Flassbeck, former State Secretary in the German Federal Ministry of Finance
Thomas Piketty, Professor of Economics at the Paris School of Economics
Jeffrey D. Sachs, Professor of Sustainable Development, Professor of Health Policy and Management, and Director of the Earth Institute at Columbia University
Dani Rodrik, Ford Foundation Professor of International Political Economy, Harvard Kennedy School
Simon Wren-Lewis, Professor of Economic Policy, Blavatnik School of Government, University of Oxford •
|
|
madbolter1
Big Wall climber
Denver, CO
|
|
never-ending austerity
ROFL
What a knee-slapper!
|
|
guyman
Social climber
Moorpark, CA.
|
|
Wow seem to me like this is what happens when you spend more than you make......
or Borrow more than you can ever re-pay.
This is looming for the USA.
Thanks for the tips on Silver, maybe time to go and buy a bunch of that and stash it under the floorboards.
I predict that Greek Climbing Vacations will be a bargain in about two years.
|
|
Reilly
Mountain climber
The Other Monrovia- CA
|
|
How could 'austerity' have failed? It hasn't started yet. I suggest you
read the article in today's LA Times about how austerity has worked in
Ireland, Portugal, and Spain where the Bolshies are pissed because Rajoy
is enjoying such popularity that he is going to call for early elections.
|
|
Jan
Mountain climber
Colorado, Nepal & Okinawa
|
|
The Guardian article by rockermike makes the most sense to me. It was foolhardy to think that the tiny Greek economy could ever compete on an equal footing with Germany. That would be like incorporating Nepal into the U.S. and wondering why it couldn't compete with California. A tourism based economy can never compete with an industrialized one. That they sponsored the 2004 Olympics they couldn't afford for sentimental reasons, was their fault and a warning to others.
The problem started with incorporating Greece into the Euro to begin with which forced them to borrow to try to keep up - to the great profit of the northern bankers. While it's true that Greeks don't work as hard as Germans, the problem was a structural one more than any moral fault of the Greeks.
This whole episode also seems to justify the position of the British, Norwegians, and Swiss who all declined to join the common currency. Perhaps the worst part of it, which their leaders seem oblivious to, is that the position of the Germans at the head of the EU is stirring up a lot of memories of the lead up to the two great wars, with economics substituting for military might. This has the potential for a big backlash against the Germans. In large part this is due to another structural inequality that has never been solved and that is the fact that Germany is so much larger than any of the other countries in Europe, many of whom were not in favor of reunification for this very reason.
We're still the safe haven and will be for a long time. Otherwise, buy Canadian natural resource stocks.
|
|
Reilly
Mountain climber
The Other Monrovia- CA
|
|
It was foolhardy to think that the tiny Greek economy could ever compete on an equal footing with Germany
Uh, the Irish haven't needed to invoke that line of reasoning. They just
put on their adult panties and got on with it and they are a relative
minnow compared to Greece. Portugal has an economy almost the equal of
Greece's in terms of lack of industry and a reliance on tourism yet they
have soldiered on. I guess it is understandable that the Greeks are such
drama queens but it is rather pathetic that they seem to think they are
more deserving of our pity and Euros than the Irish, Portuguese, and Spanish.
|
|
JEleazarian
Trad climber
Fresno CA
|
|
Joining the Euro didn't mean that the Greek economy "competed" with Germany's in the sense mentioned. It did mean that Greek monetary policy was limited, and it meant that Greek firms competed with firms from other countries, which was true regardless.
The size of an economy has nothing to do with its competitiveness. The latter reflects policy choices. The cries from the left, as exemplified by reporting in the Guardian that I've been reading the last few weeks, miss the reality of the situation. The Greek economy cannot sustain the Greek government's commitments to the welfare spending on its citizens. Neither can it sustain enough to repay its debt.
It's not a question of a policy of austerity taken on in any willing sense. It's more a matter of harsh reality imposing itself on a fantasy of financial commitments.
John
|
|
Craig Fry
Trad climber
So Cal.
|
|
You cannot cut your way to prosperity!
Austerity will always fail, since it's always imposed by the elite that just want to milk the riches out of the population.
Just look at the facts on the ground in Greece, they are suffering and had enough of the BS reasons for the austerity.
Face it, the banksters and conservatives will ruin every economy they can get their hands on, but the blame will always be shifted to the poor that can't defend themselves, or as you call them "the whiners wearing panties".
Can't you see what's going on?
It's all about greed vs. humanity
F*#k Germany and the Banksters, it's shameful what they continue to do with the support of the conservatives.
|
|
Sula
Trad climber
Pennsylvania
|
|
Milton Friedman saw the issue clearly in 1997:
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.
|
|
Sula
Trad climber
Pennsylvania
|
|
Craig Fry posted:
... but the blame will always be shifted to the poor that can't defend themselves
I see very little blaming of the poor. Instead, the blame is directed at the Greek government and its public sector, along with the policies that allowed access to absurd amounts of debt (and a national tradition of evading taxes). From the Michael Lewis article linked above:
The tsunami of cheap credit that rolled across the planet between 2002 and 2007 ... offered entire societies the chance to reveal aspects of their characters they could not normally afford to indulge. Entire countries were told, “The lights are out, you can do whatever you want to do and no one will ever know.”
...
As it turned out, what the Greeks wanted to do, once the lights went out and they were alone in the dark with a pile of borrowed money, was turn their government into a piñata stuffed with fantastic sums and give as many citizens as possible a whack at it. In just the past decade the wage bill of the Greek public sector has doubled, in real terms—and that number doesn’t take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. “We have a railroad company which is bankrupt beyond comprehension,” Manos put it to me. “And yet there isn’t a single private company in Greece with that kind of average pay.” The Greek public-school system is the site of breathtaking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked, Finland’s. Greeks who send their children to public schools simply assume that they will need to hire private tutors to make sure they actually learn something. There are three government-owned defense companies: together they have billions of euros in debts, and mounting losses. The retirement age for Greek jobs classified as “arduous” is as early as 55 for men and 50 for women. As this is also the moment when the state begins to shovel out generous pensions, more than 600 Greek professions somehow managed to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians, and on and on and on. The Greek public health-care system spends far more on supplies than the European average—and it is not uncommon, several Greeks tell me, to see nurses and doctors leaving the job with their arms filled with paper towels and diapers and whatever else they can plunder from the supply closets.
|
|
|
SuperTopo on the Web
|
Let us know!