Eurozone crisis: The possible resolutions

[Monolith]

Currency depreciation isn't an achievement, it is a sign of failure.

Devaluation of currency is not an advantage for a country.

Depreciation and devaluation are two different things. They do have similar outcomes but shouldn't be confounded.

Anyway, I never contended any of the two was an achievement. Devaluation is just a monetary tool, just like revaluation. Both usually have positive and negative effects, depending on the situation.

Value of a currency is more a sign of countries productivity than it is a mean to improve productivity.

It can, and usually is, a sign of both. For example, Italy did a series of devaluations of its national currency (lira), in order to retain the competitiveness of its products on the international stage. Also, the latest appreciation of Swiss franc was not caused by high productivity of the Swiss economy, but rather because it has been traditionally considered a stable currency, and hence acted as a safe heaven for those who no longer trusted the Euro.

Check Shiny Object video I posted previously.

Thanks, I'll watch it later today.

[The Lawspeaker]

Guess what ? The IMF was well aware of the problems well before the shit hit the fan. The actual report that never made it to the outside world supposedly because of Greek pressure.

The Dutch press offers a very brief summary (in Dutch).

[Agrippa]

On a serious note, policy makers can nominally be held responsible for their decisions even today. I say nominally because it rarely happens, and when it does, it's not because of the common good but because they have had a falling out with some of the interest groups in their iron triangle, or because of some exogenous factors.

a) I want a different leadership bound to strict principles obviously
b) Any politician is better than the bankers, because the bankers are by default greedy subjects, bred for being corrupted.

So what's better, a politician which can be blamed and hold responsible, being obliged to work for the greater good, or some private bankers which hold the whole state and people ransom, which are greedy and corrupt by default, have no obligations whatsoever to the greater good, but rather abuse their power, profits, influence and wealth all the time?!

You see, there is actually no argument against it, even less if you think about the fact that in the current system the people have to pay the interest rate - private and public, taxes AND inflation at the same time, plus many other often hidden costs. So where is this system better than the proposed alternative? It never is!

Now, this "as projects necessary or good for the public would be financed interest free" sounds very nice, but who do you suppose would regulate how much money can an executive authority spend on such projects?

That's a question of its needs, but first, the amount of money should be related to the wealth created in the state's/federations economy.

Second, where do you see a different to the situation today, other than that the state and people have to pay interest rate and the wrong people get more wealth and power over them, put the people into debt slavery?

Who regulates in the current system how much they spend? The only difference is, beside the natural inflation from overspending, the state and people have to pay the interest rates and fallouts of the bankers and private financial institutions AS WELL!

The central bank prints an amount of money that it lends to fiscal authorities without any interest whatsoever.

Its no lend to begin with, it is the official money of the state which being given out in the name of the public interests.

Great, no interest debt is created and the fiscal authority can invest it into various developmental projects. These projects require private contractors and their labour, who receive cash for their services.

Same as now, just with interest rates to and dependence from the bankers!

This all works well until the elections - the political cycle I mentioned above. Since the fiscal authority provides direct payments to citizens (via a variety of projects), it can artificially create a spike of high employment and economic growth, and sustain it for a short time.

As I said, real wealth and wealth creation is always dependent on real world goods, on material wealth, not Financial bubbles.

It is as much artificial to create wealth by "printing money" as to destroy wealth by leaving the people and economy alone, or even worse using "austerity measures" which cut down the liquidity needed for wealth and a flourishing economy.

Again, this is:
a) Not related to what I propose, as it can happen this or that way.
b) It is just worse now, because of the interest rates to pay and the dependence from an illegitimate power, the banking cartels.

But, since these payments come from this newly created money, the monetary mass will increase to excess levels and with it the exchange rate, meaning the national currency will depreciate.

That's like some idiotic Liberalists claiming that a state company creates corruption. Well, they need to go in the private economy to see the level of corruption there as well!

Fact is, that happens right now exactly because of the dependence from the bankers, exactly because of the interest rates to pay!

Because the national debt and inflation will grow, has to grow, if the banks want to keep up their business and profits, if the state doesn't want to ruin the economy and alienate the people in a horrific pauperisation of the masses and mass closures, bankruptcies in businesses, EXACTLY BECAUSE OF THE PRESSURE FROM THE BANKS, the PRESSURE TO PAY INTEREST RATES!

So again, where is the current situation better than my proposal?

The ensuing inflation and all the other harmful effects would start to wreak havoc,

You mean worse than now?

but only some time after the elections. The voter is a creature with an apparently terrible long-term memory.

The voter is before anything else a dependent subject, dependent from the information and alternatives provided. In such a Plutocratic system like we have it now, who do you think creates and controls both the informations and political alternatives? Those which control the money!

Who controls the money before anybody else? THE BANKER!

Each nation has its specific culture, work ethics, institutions etc., so the detrimental effects would not be of the same magnitude in every country, but they *would* exist.

Would it be, could it be worse than the Financial system we have? No! It can't be worse!

I'm sure Germany would probably make the best use of such system, unlike some countries with endemic corruption, and consequently very high transaction costs.

And do your seriously think that the current system is better than that? That it creates less inflations, dependence and corruption? Seriously: NEVER EVER!

This system, created by bankers centuries ago, for their benefit alone, historically grown and degenerated, is what they wanted, what those Plutocrats preferred, it is one of the worst thinkable alternatives and is surely not better than what I proposed.

The only problem with what I said is, that it would be a break up with that historically grown structures, but - THAT IS NECESSARY!

It grew like cancer, and even if it became culturally entrenched, somethink like "law and tradition", that way of banking and public financing is an abomination!

It always was and it must be completely DESTROYED!

There is no other way out of that mess and into more freedom for the individuals and collectives!

Regardless of other political demands and interests, that MUST BE CLEAR.

Anything else just means "new make up for the old whore of the Plutocracy" - NO THANKS!

[Breedingvariety]

Depreciation and devaluation are two different things. They do have similar outcomes but shouldn't be confounded.

I'm not confusing. I'm glad you aren't confusing either.

Anyway, I never contended any of the two was an achievement. Devaluation is just a monetary tool, just like revaluation. Both usually have positive and negative effects, depending on the situation.

In my opinion there are three reasons they say they devalue currency:
1) Currency has depreciated, so they pretend it was intended policy for the benefit of a country;
2) Currency is devalued for the benefit of financial terrorists;
3) Country is forced to devalue its currency by external power.

All effects are positive and negative in different respects.

Devaluation is a tool to maintain confidence. To maintain people conned.

It can, and usually is, a sign of both. For example, Italy did a series of devaluations of its national currency (lira), in order to retain the competitiveness of its products on the international stage.

Reduction of earnings has the same effect as devaluation of currency in regards of adjusting trade balances of a country. Balance should mean equal exports to imports.

Lithuania has experienced dramatic reduction of earnings since the start of depression. Its currency is pegged to Euro. Other way for Lithuania could have been to unpeg or change the peg and maintain stable nominal earnings.

They choose least politically noticeable options to screw the people.

Also, the latest appreciation of Swiss franc was not caused by high productivity of the Swiss economy, but rather because it has been traditionally considered a stable currency, and hence acted as a safe heaven for those who no longer trusted the Euro.

Suppose that was the case, which it could have been. Why not let speculators to incur losses if their idea about strength of Swiss economy was wrong.

Interventions have strategic reasons for international bankers. Interventions are not intended to right the wrongs.

[zack]

Its becoming increasingly obvious to me that whats really going on is that the leaders of the western world are trying to create a one world government and they are failing.

[beaver]

Its becoming increasingly obvious to me that whats really going on is that the leaders of the western world are trying to create a one world government and they are failing.

If there were Churchill or de Gaulle they would find the exit. Unfortunately that's not the case now

[Monolith]

And do your seriously think that the current system is better than that? That it creates less inflations, dependence and corruption?

Ugh, man. :/ I don't. I simply expanded on this:

"That also implies an inherent moral hazard, and would likely create business cycles similar to Kondratieff's waves, only they would certainly exhibit an even greater correlation with political cycles than they presently do."

And I tried to identify some of the shortcomings of such a system.

I also think the current system sucks. Okay?

In my opinion there are three reasons they say they devalue currency:
1) Currency has depreciated, so they pretend it was intended policy for the benefit of a country;
2) Currency is devalued for the benefit of financial terrorists;
3) Country is forced to devalue its currency by external power.

4) ... to make your products more affordable to foreign customers maybe? Like I said, Italy was doing that for years. When their currency appreciated due to increased demand (i.e. you needed lira if you wanted to buy Italian products), they increased the monetary mass again and devalued it in order to retain competitiveness.

Reduction of earnings has the same effect as devaluation of currency in regards of adjusting trade balances of a country.

Yes. Each fiscal and monetary policy usually has a myriad of effects. Although reductions of earnings will in vast majority of situations cause reductions of prices, since the two are inherently tied.

Balance should mean equal exports to imports.

'Balance of trade' is just a term. You could alternatively use 'net exports'.

Lithuania has experienced dramatic reduction of earnings since the start of depression. Its currency is pegged to Euro. Other way for Lithuania could have been to unpeg or change the peg and maintain stable nominal earnings.

It's a possible scenario, yes. It depends on whether Lithuanians own a lot of money to their banksters. If they do, and if their credits have a currency clause, then it is unlikely to happen.

Why not let speculators to incur losses if their idea about strength of Swiss economy was wrong.

It's easy for them. At the first sign of trouble they'll simply switch to some other currency, with minimal losses.

[Breedingvariety]

I also think the current system sucks. Okay?

At the end of the day, what I've come to realize, in large part thanks to Agrippa, It's not so much power that is the problem, but what you do with it.

4) ... to make your products more affordable to foreign customers maybe? Like I said, Italy was doing that for years. When their currency appreciated due to increased demand (i.e. you needed lira if you wanted to buy Italian products), they increased the monetary mass again and devalued it in order to retain competitiveness.

That is your mistake. Your view is too mainstream. Currency devaluation is not about maintaining competitiveness, but serving ruling oligarchy.

Any debt problems can be solved by inflation or deflation. Deflation unsettles sheaple too much. Inflation is less noticible.

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But money should not be our God. And if they aren't, the whole social science of economics debate fades into insignificance.

[Agrippa]

And I tried to identify some of the shortcomings of such a system.

All shortcomings you mentioned are present in the current system AND WORSE EVEN!

So, again, I don't see a better alternative than what I proposed for both the individual and collective interests, do you?

And don't come up with gold standard or similar crap, because it was the dependence from precious metals which created that situation and will create another Plutocratic Oligarchy, or better keep the one in charge we have right now, plus deflation and the horrific downgoing of the economy as a whole.

There is no better alternative and like Breedingvariety is saying:

It's not so much power that is the problem, but what you do with it.

There will always be people more powerful than others, with or without the state, with or without Capitalism. The real issue is, what kind of controls do the people have?

Looking at the current Plutocratic Oligarchy, they control the politicians and people rather than the other way around, so that is a huge corruption and degeneration, even more so, since they are no legitimate, no natural, no idealistic or in any sort responsible and valuable spiritual and political leadership.

Politicians can be held responsible, politicians can be idealists or stick to principles, but what to expect from the rule of the chafferer, the usurer, the fraudster?

To get rid of their corrupted rule, you need to have a state, you need to have a state controlled financial and banking system and you need to reduce private bankers, if you allow them at all, to the businesses the state doesn't want to finance.

My proposal, which can be discussed in detail, is the only viable and meaningful solution, there is no better.

[Monolith]

That is your mistake. Your view is too mainstream. Currency devaluation is not about maintaining competitiveness, but serving ruling oligarchy.

Mainstream? I try not to rely on neoclassical economics too much, but this is like saying that the entire economic theory serves the ruling oligarchy. Which is ludicrous.

Any debt problems can be solved by inflation or deflation. Deflation unsettles sheaple too much. Inflation is less noticible.

Inflation is embedded into the system and is permanent. Deflation, on the other hand, is not. You can artificially produce both though.

But yes, you could solve all debt-related problems with them if you lived in a world where nobody cared for your actions.

So, again, I don't see a better alternative than what I proposed for both the individual and collective interests, do you?

I would prefer a different economic system altogether, without any form of usury whatsoever.

And don't come up with gold standard or similar crap, because it was the dependence from precious metals which created that situation and will create another Plutocratic Oligarchy, or better keep the one in charge we have right now, plus deflation and the horrific downgoing of the economy as a whole.

The elimination of gold standard brought about the rise of the modern debt-based economy and increased the power of your plutocrats many fold.

There will always be people more powerful than others, with or without the state, with or without Capitalism. The real issue is, what kind of controls do the people have?

I would advocate the most political and economic decentralization as possible.