102 comments posted · 0 followers · following 0

408 weeks ago @ EconoMonitor - Bitcoins, Dollars and ... · 0 replies · +1 points

Sovereigns traditionally have two monopolies: the power of coinage and the legitimate use of violence.
You forgot to mentioned in your article that these two items of sovereignty are strongly connected. All the sovereign governments never hesitated to use violence when discovered that someone violated the prerogative monopoly of the governments, the right to mint money. This is also the reason why Bitcoin has difficulty to become a widely used currency. Lately several cases of digital theft of Bitcoin went unpunished since there is no authority who is responsible to punish this criminal act.

411 weeks ago @ EconoMonitor - Understanding the 'Loo... · 0 replies · +1 points

The article above did not touch the issue of differentiation between the domestic debt, government or private and foreign debt mostly government securities and guaranties, hold by foreign governments or private entities.

The US economy, due to overpriced US$ became in the last 20 years the vacuum cleaner of the world excess production capacity, and payed for it with borrowed money. The same happened in Europe in much smaller scale between the northern producing (mainly Germany)and the southern borrowing and consuming countries. This imbalance had to bring economic crisis, unless some politician would stop this trend before the crisis and change the trend. The economic crisis did not come yet because of the responsible economic policy of China, which in-spite of common understanding that US will never eventually pay back its debt in the real terms, agreed to continue their policy of lending to US and gradually reducing the mutual dependance of Chinese and US economy. Stable economic growth in US can start again after the US debt problem will be solved.

413 weeks ago @ Ed Dolan's Econ Blog - Why the Baltic Recover... · 0 replies · +2 points

Dear Ed, One of the most important macroeconomic differences between the Baltic states and the Mediterranean, is their public and even more the external debt and balance of payments. If the Baltics Public debt is well below 50%, the external debt, bellow 100% and balance of payment more or less balanced, the Mediterraneans have non of these. Their economies and mainly that of Greece, reported high GDP per capita before the crisis mainly due to the borrowings of these countries, at the moment they could not borrow anymore, these numbers have to be erased from the figures of the GDP.

417 weeks ago @ Ed Dolan's Econ Blog - Whatever Became of the... · 0 replies · +2 points

Ed hi, what a surprise, the banks stopped to give loans

Up to 2008, the savings of US citizens declined until they reached almost negative figures. This process gained momentum from the credit policy of the banks.
Then one day US citizens woke up and discovered that they were over indebted to such an extent that their assets could not be used for additional loans, but on the contrary, their liabilities exceeded their assets.

There are indications that their mood has changed as regards their propensity for saving and consuming is concerned. The very first sign of this change is that in the last five years they have reduced their debts by about 1 trillion US dollars. Even for the US economy, this is a substantial squeeze on the volume of money in circulation, either in its potential or in its kinetic state. This decrease in US citizens’ demand for credit should not surprise us if we take into account that in the same period their real estate assets lost value to the tune of 3 trillion US dollars. So there is still a long way to go before US citizens will be able to feel the same level of security, they enjoyed before the outbreak of the economic crisis of 2008.

The US government and the Federal Reserve (the US Central Bank) tried its best to balance this squeeze by the antidote of monetary easing, and increased its debts by 5 trillion US dollars. Yet as might be expected none of this has worked, because neither the US government, nor the Federal Reserve Bank, nor even the commercial banks, can translate it to aggregate demand to this extend. This can be done only by the US citizens themselves. And so long as they have no faith in the US economy (and my wild guess is, it is somehow connected to the US government deficit and accumulated debt to the Chinese) they will continue to reduce their demand for credit and increase their savings.

Data source;

417 weeks ago @ EconoMonitor - Oil and Gas Exploratio... · 0 replies · +1 points

Nathan Argent and Cindy Baxter are additional political advisers, who have no capacity to think in parallels of alternatives. If the world has to supply the increased additional need for energy coming mainly from the less developed regions in Asia, (China and India) what alternative they have? Coal? Isn't it going to have such a devastating environmental effect that not only we will burn by heat to death, but will have probably to stop to breath.

421 weeks ago @ EconoMonitor - Irrational Funding Exu... · 0 replies · 0 points

Mr Greg Caramenico's obviously doesn't know what he is speaking about, or maybe his brain couldn't generate more original thought, so he writes about things that are beyond his competence, hoping to hit a smart tone by an accident.
In Europe the European commission created research fund of more than 1 billion Euros for the human brain project,

425 weeks ago @ EconoMonitor - Is it Possible that th... · 0 replies · +2 points

Mr. Salhani. It happens ever and ever again, that whenever and whoever comes to write about the political social failure of the Arab-Muslim world instead to look inward to uncover the real obstacles preventing these countries to enter the road of modernization and creating decent social life and civil society, they look to blame someone else. The usual accused is of course the USA and Israel but never some internal political force, social reality or a despotic supporter like the formal USSR.
Who is to be blamed that after decolonization in the fifties of last century Egypt, Syria, Iraq, Libya, Tunisia and all the rest become military dictatorships oriented on USSR. Who is to be blamed that G.A. Nasser, the most prestigious Arab leader since the times of Selahedine, the leader of Egypt, Arab world, one of the triumvirate of Third Word leaders, used his political prestige mainly to endorse international military conflicts, (and not only against Israel). Who is to be blamed that these dictators did not create some sort of liberal society that would at least educate its people and not bring Egypt to 21 century with 30% illiteracy? Who is to be blamed, that even after the collapse of USSR, when the failure of their centralized political, social and economic system of governance become so obvious that even some Sub-Saharan countries turned to democracy, in all the Arab countries the dictatorships continued as if nothing happened? Who is to be blamed that these dictatorships, let all the religious conservative political forces to be active beneath the official political leadership, while they strangled any secular God forbid liberal politically active civil society? Who is to be blamed, that to achieve political legitimacy, instead to loose their grip of political power, all these dictatorships turned to political Islam and by doing so, it even more postponed the adaptation of modern values in their countries, that are necessary to be able to run an effective political, social and economic system? Of course all the blame is on USA and its allies.

426 weeks ago @ EconoMonitor - China and the Middle-I... · 1 reply · +2 points

I can help with explanation of Israel.

After Israel miraculously recovered from economic crisis of 1973-1989, it was flooded at 1990 with 1 million (more than 20% increase of the population), new highly skilled highly committed Russian Jewish immigrants who within less than two decades help Israel to become one of the technologically most advanced countries in the world. Of course Israel always had highly skilled population and relatively well functioning democratic government.
About the economic miracle viz;

How all this is connected to the other countries, you need help from someone else.

426 weeks ago @ EconoMonitor - Beijing’s New Leader... · 0 replies · +1 points

Chinese economic development has speed up if compared to the US and the European economy since 2008. The major drive of this economic growth was investment. A temporary slow down of this process is necessary, if there should be a shift of the economy from investment to consumption. And in consumption still a lot can be expected. Do not forget most of the Chinese population is about to purchase their first TV set, and never owned a private car.

427 weeks ago @ Ed Dolan's Econ Blog - Why Libertarians Shoul... · 0 replies · +1 points

Just a short remark, the Chinese pollution was caused by production of industrial items for the US and EU markets. If there would be no such an unprecedented demand for made in China gadgets, Chine with its level of consumerism even with its huge population would not pollute so much the earth. So i would say it is easier to put carbon tax on the fuel in US, than to start an economic war against China, based on claim that they destroy the environment (or the US production capacity).