Global Economy Bursting?

[Randolph Kinney]

Ireland should 'do an Argentina'

http://www.guardian.co.uk/commentisfree/cifamerica/2010/nov/22/ecb-ireland-bailout-argentina

Reject the ECB and IMF, ditch the euro.

 

[Randolph Kinney]

Irish Debt Crisis Forces Collapse of Government

http://www.nytimes.com/2010/11/23/world/europe/23ireland.html?_r=1&nl=todaysheadlines&emc=a2

The impending collapse of the Irish government after an expensive bailout reconfirm fears that the financial crisis was far from contained.

Deeply indebted countries like Portugal and Spain that are pushing through unpopular budget cuts may soon face an uncomfortable choice: punishment by financial markets that will hammer any laxity in deficit-cutting with exorbitant interest rates, or by an angry electorate annoyed by prolonged economic hardship.

The U.S. has not addressed its tough choices yet but Bernanke has chosen the easy way with QE 2 and then criticizes Congress for not spending more. We have the somewhat angry electorate but wait until they see what they have to pay. Congress appears likely to allow the tax rates to jump along with the alternative minimum tax. That's more than $4 trillion in taxes.

 

[The Bob]

I think its just a matter of time before one of these countries goes belly up. In the US, as bad as our debt is, its "only" just over $44,000 for every man, woman and child. In Ireland its over $535,000 per. I don't know how you dig out of a hole like that.

 

[Riick]

Logical Lunacy of Chasing Bubbles

The Logical Lunacy of Chasing Bubbles

.... there are plenty of unhealthy signs, but, here is the question of the moment: Will asset markets first enter another period of lunacy? Will there be just one more asset inflation of securities markets? … the last death rattle of a financial system? To an extent, this already has happened.

Worth a read LINKY

.

 

[Terrel L. Shields]

Riick
from what I see, the Fed is setting us up for one bubble after another. It is going to be a Whack A Mole economy for the next decade. Knock down the mortgage bubble, create a bond bubble, buy long term treasuries, pop the bond bubble, build the stock bubble, lower the interest paid, inflate the oil bubble, oil bubble slows the economy, knocks down the oil bubble, stock market deflates, bonds rise again...

Plainly, student of the Depression that he is, Bernanke is working by the seat of his pants and it all goes back to the panicked stupidity that occurred under Greenspan which literally ran interest rates to zero, and the second they attempted to raise them, the housing bubble exploded, and they were forced to take the interest rate to zero... Once at zero, they are unable to escape the liquidity trap without bubbling something else... http://en.wikipedia.org/wiki/Liquidity_trap

 

[Austin]

China, Russia quit dollar

By Su Qiang and Li Xiaokun (China Daily)
Updated: 2010-11-24 08:02

http://www.chinadaily.com.cn/china/2010-11/24/content_11599087.htm

 

[Randolph Kinney]

China, Russia quit dollar

By Su Qiang and Li Xiaokun (China Daily)
Updated: 2010-11-24 08:02

http://www.chinadaily.com.cn/china/2010-11/24/content_11599087.htm

They are going to use their own currencies for bilateral trade between them. That presents a problem. The yuan is not internationalized and neither is the ruble. If you buy something from China and pay in rubles, that means China has to buy something from Russia to redeem those rubles. That would balance the trade between them.

The exchange rate for rubles in terms of yuan will be set by the trade imbalance. That should last all of a year.

 

[Randolph Kinney]

http://coinmill.com/CNY_RUB.html#CNY=1

1 yuan = 4.7 rubles

Russia like to print rubles.

 

[Randolph Kinney]

Country Interest Rate Growth Rate Inflation Rate Jobless Rate Current Account Exchange Rate
Russia 7.75% 2.70% 7.60% 6.60% 33318 30.5570

Country Interest Rate Growth Rate Inflation Rate Jobless Rate Current Account Exchange Rate
China 5.56% 9.60% 4.40% 4.20% 70500 6.6920

 

[Workbox]

Riick
from what I see, the Fed is setting us up for one bubble after another. It is going to be a Whack A Mole economy for the next decade. Knock down the mortgage bubble, create a bond bubble, buy long term treasuries, pop the bond bubble, build the stock bubble, lower the interest paid, inflate the oil bubble, oil bubble slows the economy, knocks down the oil bubble, stock market deflates, bonds rise again...

Plainly, student of the Depression that he is, Bernanke is working by the seat of his pants and it all goes back to the panicked stupidity that occurred under Greenspan which literally ran interest rates to zero, and the second they attempted to raise them, the housing bubble exploded, and they were forced to take the interest rate to zero... Once at zero, they are unable to escape the liquidity trap without bubbling something else... http://en.wikipedia.org/wiki/Liquidity_trap

You are so right and that is the impression that I have estimated and for many others it does feel like the seat of you pants economy.