Category Archives: Currencies

Nathan Tankus: Germany, the “German View” of Hyperinflation and the Ghettoization of Dissent

By Nathan Tankus, a student and research assistant at the University of Ottawa. You can follow him on Twitter at @NathanTankus

Money is a social construct. It also facilitates many complex, interrelated social relations. As a result, it’s difficult to pin down for the average person what the effects of a particular policy will be, especially with regard to economic policy. While inflation may have negative effects in certain times or places, it’s difficult to figure that out just by looking around a city or country. As a result when politicians or other figures with agendas want to talk about inflation, they inevitably go for the most visceral descriptions available. For some number of decades now, the example they go to do decry inflation is people carrying around “wheelbarrows full of money” to go buy something such as bread. One of their favorite examples is Weimar Germany. So let’s talk about it.

Is the Eurozone Nearing a Make or Break Point?

One of the dangers of trying to understand what is going on in the Eurozone if you are a hapless but interested American isn’t simply that you’d have to be fluent in a lot of languages to keep on top of the media, but the media themselves are, as NC readers know well, not exactly reliable. Look at how much dictation from business and political leaders masquerades as news in the US. And we have a less controlled press than, say, Italy does.

So I will give readers some fresh data points and let you duke it out.

Germans and Eurocrats Throw Hissy Fits Over Italian Elections

It’s unlikely that the destabilizing of the political calculus in Europe resulting from impressive showing of anti-austerity candidates in Italy will end prettily or nicely. However, Europe had already put itself in the position of having only bad choices. So the question is who suffers, and the public in periphery countries are starting to rebel against being broken on the rack while Eurocrats and pampered German and French bankers feel no pain.

Can the Euro Exist Without Fiscal or Political Union?

This column draws on the history of the US – especially its assumption of states’ debt after the War of Independence – to investigate which path might best serve the Eurozone. History tells us that unions require a well-constitutionalised system of restraint on fiscal behaviour, both at the federal level and at that of individual states.

Martin Wolf Misses the Real Reason the Eurozone’s Unhappy Marriage Has Not Broken Up Yet

The normally astute and blunt Martin Wolf is either having an uncharacteristic bout of circumspection or is managing to miss an important, arguably determining reason why the Eurozone persists in inflicting destructive austerity on much of its population.

Yanis Varoufakis: Are Ireland and Portugal out of the Woods? (Updated)

By Yanis Varoufakis, Professor of Economics at the University of Athens. Cross posted from his blog

Ireland and Portugal have, recently, tested the water of the money markets with some success. But does this mean that they are out of the woods?

Is the Euro Crisis Over?

By Robert Guttmann, Professor of Economics at Hofstra University and a visiting Professor at University of Paris, Nord. Cross posted from Triple Crisis

A strange calm has settled over Europe. Following Mr. Draghi’s July 2012 promise “to do whatever it takes” to save the euro, which the head of the European Central Bank followed shortly thereafter with a new program of potentially unlimited bond buying known as “outright monetary transactions,” the market panic evaporated. This calming of once-panicky debt markets has led to optimistic assessments that the worst of the crisis has passed. All this begs the obvious question whether this major shift in mood is justified and as such durable or just a temporary break before the next storm.

Europe’s Imbalances Widen

By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

While the latest European PMI is showing some improvement it has become apparent that imbalances are growing ever-greater in the zone.

Iceland’s Lessons on How to Fix a Bank Crisis

By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

I’m slowly working my way through the material that’s coming out of World Economic Forum in Davos. I tend not to take too much attention of what is said at this particular conference as, in my opinion, it tends to be full of self-serving tripe in the most part.

I did, however, notice a small interview with Icelandic President, Olafur Ragnar Grimsson, which was quite interesting.

Philip Pilkington: The Japanese Stimulus – Will It Work?

By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil

There’s a lot of talk flying around about the Japanese stimulus. Some appears to be misguided, some appears to be sensible.

Deprogramming Progressives Indoctrinated into Supporting Austerity

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Jointly posted with New Economic Perspectives

A little bit of economics can be a truly terrible thing, for the introductory classes in micro and macro-economics are the most dogmatic and myth-filled part of the neo-liberal curriculum. Dogmas that have been falsified for 75 years (such as austerity) are taught as revealed truth. The poor indoctrinated student is then launched into the world “knowing” that austerity is the answer and that mass unemployment and prolonged recessions are small prices to be paid (by others) to achieve the holy grail of a balanced budget. Students are taught that national budgets are really just like household budgets. These dogmas are not simply false, they are self-destructive and cruel. Neo-liberal economics is so bad and has gone downhill at such a rapid rate that it now worships the economic analog to bleeding patients – austerity – as a response to a Great Recession. Millions of people are indoctrinated annually into believing this long-falsified nonsense, and that includes people who consider themselves progressives.

The Probability of Greek Exit, Revisited

Fears of an imminent Greek exit from the Eurozone have subsided, for now. This column attempts to measure the probability of a Greek exit, finding that the changing fortunes of Greek political parties, and the possibility of an early election, mean that the risk of a Greek exit may actually be quite high. It suggests that, despite investors’ efforts to measure political risk, a persistent sense of unease about the Eurozone’s future is set to continue into 2013 and that Eurozone financial assets will thus continue to embed significant risk premiums in the coming years.

Wolf Richter: Sweden’s Euro Hostility Hits A Record

As the Eurozone flails about to keep its chin above the debt crisis that is drowning periphery countries, and as the European Union struggles to duct-tape itself together with more “integration,” that is governance by unelected transnational eurocrats, Sweden is having second thoughts: never before has there been such hostility toward the euro.

Is There a Case for Optimism About the Eurozone?

I know, we don’t generally do optimism here at Naked Capitalism. And truth be told, I’m having trouble accepting the Financial Times’ John Dizard’s argument that things are going to get better in the Eurozone. Admittedly, John has a taste for investing on the wild side: he’s typically recommending exotic trades in his weekly column. But his argument isn’t based on catching a near-term trading bounce; it’s based on…..fundamentals.