tag:blogger.com,1999:blog-6297413898275266606.post5320729139981746058..comments2024-03-27T18:15:59.096+08:00Comments on Economics Malaysia: Explaining Europehishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-6297413898275266606.post-9023062456431866072011-10-24T12:30:04.945+08:002011-10-24T12:30:04.945+08:00I am not disagreeing with the issue of excessively...I am not disagreeing with the issue of excessively loose monetary policy. The question is, why? I don't think it is acceptable to attribute it simply to poor monetary policy. <br /><br />I would say that there is certainly more than one reason that has led to what they are facing today. As I said, the problem that the PIGS are facing extend far further than the era of low interest rates. The The Main Streeterhttp://mainstreeter.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-84491160296830632322011-10-24T10:24:02.263+08:002011-10-24T10:24:02.263+08:00Good comments all, I've hardly anything to add...Good comments all, I've hardly anything to add. You guys might want to <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/10/the-long-hand-of-medieval-economic-thought.html" rel="nofollow">read this</a> though. Historically, fixed exchange rates may have been the norm, but they are not "natural".hishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-29636544997622335532011-10-22T19:42:04.417+08:002011-10-22T19:42:04.417+08:00There are a lot of parallels between what is happe...There are a lot of parallels between what is happening in the EMU today and the Bretton Woods era. Goh Keng Swee's "Wealth of East Asian Nations" is a particularly good resource, though he is not necessarily correct on every point.<br /><br />There was effectively a single currency then, and replace Greece with America and Germany with... well, Germany and the rest of the world (Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-33047177120158214132011-10-22T19:21:21.567+08:002011-10-22T19:21:21.567+08:00Some nice articles further elaborating on my point...Some nice articles further elaborating on my point:<br /><br />http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100011624/in-defence-of-pigs/<br /><br />http://www.telegraph.co.uk/finance/financialcrisis/8755881/Germany-and-Greece-flirt-with-mutual-assured-destruction.htmlAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-18033099448114853812011-10-22T19:19:20.876+08:002011-10-22T19:19:20.876+08:00Yes, but the current account deficits are induced ...Yes, but the current account deficits are induced by the inappropriate monetary policies which the European Central Bank are running. It's similar to the situation between America and China.<br /><br />That is not to say that every balance of payments issue can be attributed to monetary policy. The point is that monetary policy can lead to economic imbalances, and current account deficits areAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-53805754337692699542011-10-22T08:55:00.290+08:002011-10-22T08:55:00.290+08:00I think the cause of the crisis goes beyond prolon...I think the cause of the crisis goes beyond prolonged low interest rates. It is more fundamental than that. For Greece, it is mired with corruption, lack of competitiveness, and quite frankly, a very lazy population. I think it is more of a crisis of competitiveness. While you may argue from the currency point of view, yes, having their own currency can help "improve competitiveness", The Main Streeterhttp://mainstreeter.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-61298200432942972212011-10-22T05:27:27.507+08:002011-10-22T05:27:27.507+08:00What caused the crisis?
Well, you had the Europea...What caused the crisis?<br /><br />Well, you had the European Central Bank leaving interest rates too low for too long - catering mostly to the German situation, to the neglect of the PIIGS.<br /><br />This led to huge economic imbalances between the Northern and Southern states - and this being a microcosm of the imbalances between East Asia (particularly China) and America (both China and Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-81364046596555323122011-10-22T05:10:40.051+08:002011-10-22T05:10:40.051+08:00Check out Ambrose Evans-Pritchard - I think he'...Check out Ambrose Evans-Pritchard - I think he's the best commentator on Eurozone problems.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-77385736573659744602011-10-21T17:57:44.121+08:002011-10-21T17:57:44.121+08:00George Soros has something similar at Project-Synd...George Soros has something similar at Project-Syndicate as well:<br /><br />http://www.project-syndicate.org/commentary/soros73/English<br /><br />Not as concise, but the plan is the same. Calm the markets, then reform. With the yields as they are now, no amount of money is going to be able to service the debt.The Main Streeterhttp://mainstreeter.blogspot.comnoreply@blogger.com