Wrong IMF official under investigation

Antonio Borges, the head of the IMF's European department thinks that the value of assets that Greece may be able to sell off could be as high as Euro 250 billion. We would risk a bet that this 'expert view' is at least twice the amount that might ever be reached in a fire-sale of Greek State assets. Given that our financial fate is in the hands of such experts one can only be pessimistic about the outlook for the financial system - and the Eurozone in particular.

UK and Example for Euro Periphery?

UK Example for Euro Periphery Countries: Osborne
Maybe the Chancellor lives in another country, but one can only describe this statement as delusional. So far most policies are only intentions and what is saved on some measures is dissipated on additional spending schemes that are added without much democratic oversight.

Euro, Debt and Banks - no reason for more 'coordination'

The well-meaning proposals to avoid a break-up of the Eurozone quite often lead to the recommendation to give more power to a Federal Government that will have more power than the Governments of the individual member states. This is nothing but propaganda by the centralists of all persuasions - be they in the bureaucracies in Brussels, in the Media, Finance or Academia. The main problem at present is the linkage of the bad debt problem in the banking system with the overindebtedness of certain member states. This leads to the (false) conclusion that only by bailing out these states and setting up measures that avoid any state getting into trouble again in the future it will be possible to keep the Eurozone intact. But this means barking up the wrong tree. Policies should primarily focus on safeguarding the banking system. When that has been achieved it is perfectly practical to let individual member states declare bankruptcy and leave it to their politicians to sort out their problems.

Fed Stimulus - the wrong medicine

When economists from the pulpit of their tenured positions complain (Stimulus by Fed Is Disappointing, Economists Say, New York Times, 24 April 2011) that the policy of Quantitative Easing (aka Money Printing) has not been sufficiently forceful I would like to remind them that the policy was wrong right from the beginning. The Keynesian policies of macro economic management - pushing buttons in fiscal or monetary aggregates - give politicians and all those arguing for a powerful state tools to play with but they are not the only - or even correct - reply to problems that stem for wrong micro-economic policies in tax, employment or international trade management.

IMF bureaucrats in favor of capital controls

The iron law of bureaucracy manifests itself when the pampered and unelected bureaucrats of the IMF start to allow capital controls as a policy tool for governments that have run out of ideas. The increasingly mad spending spree that has been fostered by politicians of all parties since the early 1970s has hit a wall and rather than realise that their policies are unsustainable the political establishment - cheered on by the media and 'experts' - resorts to more and more desperate measures. When a country starts on the slippery road towards state control there is no way but to progress more and more deeply into a morass of regulation. Each step requires more detailed control, each measure has to be policed, interpreted and so on until each activity is only possible under detailed conditions set by the political 'Kommissars'. Capital controls open a temporary reprieve to the control freaks that dominate our lives already to a large extent and investors are well-advised to take the necessary steps before they and their investments are trapped in some 'welfare paradise' where welfare means a fat political class ruling over a peasant population that is just treated as a tax cow. Already some 'developed' states tax 60 per cent of the average (!) wage earner's income - happy were the days when the 'poor' medieval peasant had to pass a tenth of his produce to his landlord.

The ultimate worth of Paper Currencies

In this state of competitive devaluation of all currencies many wonder where this spectacle will lead us to. Above all, people wonder what these 'currencies' are really worth. We can give them the answer: all the fiat paper currencies have a value that can easily be verified - it is the value of the paper they are printed with.

Euro Crisis - more platitudes from Jacques Delors

When Jacques Delors talks about defects in the design of the Common Currency he forgets that the main problem is not the Euro per se but the risk to the banking system if a country wants to or has to leave the Euro. Without that risk it would be perfectly possible for a country to become bankrupt while remaining in the Euro. Already in 2005 Temple Associates has warned investors not to invest in the weaker member countries of the Eurozone.