Comments on: Global imbalances: out with a bang? http://blogs.reuters.com/great-debate/2009/09/22/global-imbalances-out-with-a-bang/ Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Benny Acosta http://blogs.reuters.com/great-debate/2009/09/22/global-imbalances-out-with-a-bang/#comment-25144 Tue, 06 Oct 2009 20:15:50 +0000 http://blogs.reuters.com/great-debate/?p=5383#comment-25144 There is no other treasure in this world but life. Human life is the most valuable. Currency is just an idea. A piece of paper or plastic that gives you the authority to exchange resources within specific limitations.

Money itself is worthless. It is a tool to facilitate the exchange of resources and nothing more. It has been said for thousands of years that lending money at interest is a bad idea. One should never “earn” money simply for having it. Money was only meant to serve as a platform for production on a free and organic basis.

In other words money was meant to help you get the things you need, to do the things you want to do. And that’s it. But since we charge interest for lending money, lending has become a cut throat business showing no similarity to the public service it was meant to be.

The lending of money could be used to facilitate growth. But as long as interest and profit are at the center of the venture, they will take precedence over human need and want, which is the very reason for lending in the first place.

That’s why people are getting evicted from their homes or going without health care or an education. What happens if home buyers only had to pay back the money borrowed and nothing more?

This is exactly what should happen. “Money making” should not be a business. Our government already makes our money for us. We should be using that money to create things that actually make a difference. Things like schools that actually teach our children how to think critically and freely, or biotechnology that is designed to work properly instead of being designed to fail and thus force another purchase.

Work to solve problems. Working to make money is a fools quest. We are paying for foolish mistakes right now. The headlines say it all.

Love your neighbor as yourself. Love yourself.

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By: Paul Rosa http://blogs.reuters.com/great-debate/2009/09/22/global-imbalances-out-with-a-bang/#comment-24642 Thu, 24 Sep 2009 15:28:43 +0000 http://blogs.reuters.com/great-debate/?p=5383#comment-24642 A comment suggests there is no printing press for gold. Gold is like oil – the higher it’s price – the likelier it is that more gold will be mined because it becomes profitable to mine it. It is also an industrial metal and it’s price can be influenced by the drop in demand due to a slump in the demand for industrial goods. I believe economists would call the supply of gold “elastic”.

Gold, like any other commodity, has no intrinsic value. Even the price of diamonds is heavily manipulated by the major diamond miners like DeBeers). It has been said that if Debeers ever dumped the contents of its vaults on the market at one time – the price of diamonds would be next to nothing.

What Gold has, that currency doesn’t seem to have, is emotional or psychological value. It’s kind of like “that old time religion”. It sounds stable until you have to live with it and then remember why most of us don’t live with it anymore, for some very good reasons. And the top of the heap of good reasons is – one can never fully define what it was to begin with. Not even the people who lived with it could.

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By: Mr. Anderson http://blogs.reuters.com/great-debate/2009/09/22/global-imbalances-out-with-a-bang/#comment-24618 Wed, 23 Sep 2009 14:46:17 +0000 http://blogs.reuters.com/great-debate/?p=5383#comment-24618 70% of America’s growth = Consumer spending………Game over….

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By: Casper Lab http://blogs.reuters.com/great-debate/2009/09/22/global-imbalances-out-with-a-bang/#comment-24613 Wed, 23 Sep 2009 09:50:12 +0000 http://blogs.reuters.com/great-debate/?p=5383#comment-24613 I don’t see what the problem is: there is a very good histogram of ‘Trade balance in G20 countries’ elsewhere on the web page, barring the double counting. What constitutes ‘Asia’, does this include India and Russia ? It is not only ‘Asia’ that has these positive balances. Let’s not forget about financial and capital accounts/balances either.

Depending on contract terms, bonds mature over time, they can’t be cashed in one go. Also, a willing and able seller requires a willing and able buyer. The same applies to currencies. Interest rates will only ‘spike’ if the monetary policy committees decrees it, or if the markets becomes over-saturated with bonds.

In both cases the principles of interest rate and exchange rate parity applies. So what is the problem ?

What should happen are transfers from sovereign capital and financial accounts to see how trade accounts react. Then only can one tackle individual current accounts, which is short term, month by month to year by year.

Maybe the US balance sheet is far stronger than we think.

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By: Youri Carma http://blogs.reuters.com/great-debate/2009/09/22/global-imbalances-out-with-a-bang/#comment-24611 Wed, 23 Sep 2009 08:09:02 +0000 http://blogs.reuters.com/great-debate/?p=5383#comment-24611 The IMF who only spend $5 trill in the world economy says we have to a rebalance it?

The U.S. is the main cause of this crises, refused to sign the Kyoto treaty to save the environment, don’t spend a penny less and is still increasing it’s debt while already have spend $24 trill tells the world what to do?

Obama tells Germany and China, the major exporters to the U.S., that they export a lot but do not buy much back. China, Germany and Japan, should consume more, while debtors like the United States ought to boost savings and that’s exactly what the U.S. isn’t doing.

Obama expanded the Afghan war into Pakistan, sended more troops than ever in this already 8 year war and didn’t leave Iraq at all? Obama hasn’t an exit strategy out of this crises other than mindless and endless spending with infinitive money printing as result.

Obama can’t raise interest rates cause that would wreck the economy so what else can he do except for the money printing? My answer would be: “Absolutely nothing!”

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By: krishnamurthi ramachandran http://blogs.reuters.com/great-debate/2009/09/22/global-imbalances-out-with-a-bang/#comment-24602 Tue, 22 Sep 2009 20:42:42 +0000 http://blogs.reuters.com/great-debate/?p=5383#comment-24602 Dear Editor friend,
Your article is good for world leaders and world arm chair economists and to general journalists.
I have been observing since so many months, all these world leaders used to assemble, giving their faces to photojournalists and some declaration on their deliberations.
Back to your writings,honestly saying, getting many innumerable informations from all types of media coverages,
under this circumstances China will not leave America and Vice Versa.
Entire world wants to have very strong economic and social connections with China for their own ends.
China has very huge cash reserves.
America had huge cash reserves in previous decades.
Due to Iraq and Afghanistan conflicts, America had spent huge reserves for troops movement, maintenance and to cope up with her recession problems and now for day today running economics.
These my writings are true to general public.
We can write,discuss and comment on lot of current subjects.
As per today!s world report, time has come for developed nations to go for new approaches for tackling their economic woos and for immediate solutions for preventing on future set backs.
As a general observer like me and other ordinary individuals, and like you and other reporters, let us wait and see the outcome of G20 Summit declarations on Climate change concrete steps, stable economy, and more co operation on trade and commerce.

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By: Michael http://blogs.reuters.com/great-debate/2009/09/22/global-imbalances-out-with-a-bang/#comment-24600 Tue, 22 Sep 2009 19:53:17 +0000 http://blogs.reuters.com/great-debate/?p=5383#comment-24600 Your analysis falls short of getting to the root of the problem – an undervalued currency and massive current account surpluses. The acquisition by the Chinese of US debt is not the cause of the problem, but a symptom of an even greater one. That of continued (30 years +) current account deficits, and trade imbalances that in a Ricardian world could not exist (i.e. with fiat money, you print more and issue more debt. There is no printing press for gold). Massive deficits should be met with an outflow of capital (formerly gold) and then severe demand contraction, thereby illustrating the “natural” stabilizers to re-establish equilibrium in trade. Instead, the US prints money and the Chinese buy – it is in both of their interest to do so, until …….

Of course, if the Chinese stopped buying US debt, as you suggest, this would only mean their massive surpluses would have to be redirected elsewhere. One place for this would be in Chinese domestic PP&E – this would create a series of nasty bubbles back on the home land, to be followed by a period of painful deflation. Sound familiar? It should, it’s called “Japan” and “the lost decade”.

Ergo, the only solution is to stop allowing the gods of monetary policy to endless print money and make more money through a shaky banking system.

This thing we call the “Financial Crisis” – it’s only the first chapter. I’m not sure when the next episode is coming or how, but it will and we will point back to this period for explanations as to its roots. Remember, the period of pure fiat money (i.e. post-Bretoon Woods and no convertability to gold) is only a 40 year experiment. Thus far, I think the policy makers know far less than they believe – that makes them dangerous.

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By: Sternberg http://blogs.reuters.com/great-debate/2009/09/22/global-imbalances-out-with-a-bang/#comment-24599 Tue, 22 Sep 2009 19:45:46 +0000 http://blogs.reuters.com/great-debate/?p=5383#comment-24599 China is only one of approximately 140 nations who hold US Debt. That is 140 of the 195 nations of this world consider US debt to be a safe investment. We used to brag about that and use it as evidence of the strength of our economy.
Now the same fact that has existed for 60 years is used by some to slander our economic strength.
It has certainly been worse. In the 1980’s Japan owned 20% of the US stocks traded on Wall Street, while the rest of the foreign nations owned another 13%.
We survived that. And we will survive China owning an amount of US debt roughly equal to 15% of the US housing market.

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By: Sammy http://blogs.reuters.com/great-debate/2009/09/22/global-imbalances-out-with-a-bang/#comment-24598 Tue, 22 Sep 2009 19:14:23 +0000 http://blogs.reuters.com/great-debate/?p=5383#comment-24598 So if the West stops consumption/imports and starts saving who are the current exporter nations will be exporting their goods to? How are they going to grow? Have the politicians and MSM lost their mind entirely?

This change will be happenning on boths sides. As the West deflates the East will go down with it. They may stay afloat for a few years by spending their accumulated foreign currency reserves, but that is a dead end for them.

50 years of deflation is what we are looking at now. Yoo hoo.

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By: Russ http://blogs.reuters.com/great-debate/2009/09/22/global-imbalances-out-with-a-bang/#comment-24597 Tue, 22 Sep 2009 18:54:57 +0000 http://blogs.reuters.com/great-debate/?p=5383#comment-24597 I don’t think they will be able to fix the system. It will have to crash further.

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