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Krugman's "Smoot-Hawley Moment"
I'm constantly amazed at the things Paul Krugman has to say. This guy is on the top of the list of global economic thinkers. He has all of the credentials, and a huge platform to spin his views of what's good and bad, and what should be done next. PK's OpEd in the Times today is another example. (Link)
PK does a summary of Cyprus. I believe he has all of the facts straight, and I agree with him when he says:
Global capitalism is, arguably, on track to become substantially less global.
The broader story of Cyprus is about capital controls. It's not just the harsh new controls on the Island, it's all over Europe. There is not a country on the globe that has not established some form of controls the past few years. America has done it in subtle ways, using ZIRP, QE, Dodd-Frank and the Department of Justice to contain the free flow of money. I think a big clampdown in China on money is right around the corner. This trend scares the crap out of me. Krugman is on the other side of the spectrum. He loves capital controls. He wants to see more of them:
The bad old days when it wasn’t that easy to move lots of money across borders are looking pretty good.
"Looking pretty good?" OMG!
Given that big shots like Krugman want to see more controls of money, its a good bet that more controls will come. I think the likes of Krugman are ignoring the realities of 2013. They are doing so very much at the peril of the global economy.
The CIA keeps track of global cross border debt. The numbers are huge, and growing fast:
- Total World External Debt was $69T in 2012. In 2011 it was $63.6T. In one year it grew by $5.4T. World GDP growth was 3% while cross border debt rose by 8.5%.
- In 2004 World External Debt was $43T, or 65% of World GDP. In 2012 total External debt was 85% of GDP.
- The External Debt numbers for the USA are worth noting. Yes, 1995 is a long time ago, and the world is a different place today. I still find these results troubling:
In his typical style, Krugman establishes what is "true" and what is "false".
The truth, hard as it may be for ideologues to accept, is that unrestricted movement of capital is looking more and more like a failed experiment.
Krugman's conclusion is that a cornerstone of global activity is a failed experiment and that the solution is to install more capital controls. Mr. K will get what he wants. More controls are coming - that's certain now. The entire house of cards that is Global GDP is at risk. The failed experiment that PK thinks is the rise in external debt, could easily morph into the failed experiment of the global economy.
I wonder if PK (and all the others who are pushing for more controls) are not having a "Smoot-Hawley Moment". In 1929 tariffs and other restrictions on trade were established. A global depression followed. In 2013 the tariffs and restrictions are on money, not goods. But if the result of those controls is a reduction (or even stability) of the external debt numbers, then the global economies will fall with it.
And this is what the world's "smartest" economist is calling for.
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Are you suggesting that all counterparties must go to 0 to cause a systemic collapse? Surely you wouldn't suggest such a thing after seeing serious systemwide issues caused (on multiple occasions over the past decade) by a single corporation merely lacking sufficient cashflow to pay its creditors on time. "Some counterparties going to zero" in today's fragile environment could easily cause a widespread loss of faith which would be sufficient to destroy our faith-based monetary system.
The sum is done correctly. It's gross debt, of course. Nobody said it was the net debt.
The CIA didn't add it themselves. Bruce likes to play up the "CIA" angle, but this is just the CIA World Factbook, compiled from other sources like the IMF and World Bank and various public agencies. It's produced by a small division of the CIA that works with public sources, which has no access to secret information or any contact with the secretive divisions of the CIA.
Krugman wanted Hyperinflation when he had 7 million in debt. Now that he is BK, he wants a recession. Krugman's only agenda is himself and his pettiness.
I can not imagine the global elite corporate barons allowing capital controls. Their corporate "countries" know no Nation State boundaries nor loyalties.
Laws will be modified excluding certain Special Cases from capital controls.
Capital controls will only apply to the 99%.
The true failed experiment is central banking.
I wonder if capital controls will force multinational corporations to declare their allegiance, by forcing them to choose which nation to keep their money in for the long term? Or will the predictable happen, and these controls be applied only to the smaller players and to individuals?
Capital Controls for people not Corporations. Best financial advice ... open a Corporation and live through it.
Nope, irredeemable currency is the problem or government created currency. Confusion between money and currency, and confusion between credit and money, interest rates and monetary base controlled by a few men. Add to that lack of accountability of bankers and you get no darwinism in banking and finance, or degenerate finance if you will, all of that rolled-up into the ~fiat~.
You know the answer to that, "laws" don't apply to really important players. Krugman is a fascist nut who is an important shill for the criminals in power who are looting the country.
the true failed concept is global empire.
Global central banking is a MEANS to THAT end.
While the money floats in, it's G-d's own idea. When it starts to float out, it's terrorism. And that includes the flow of people as well.
He is a creation of the lamestream media/leftist/globalist bankster hive. He has shit for brains and makes no sense, which is why the typical lefturd loves him.
Krugman wants to be the one whispering in the King's ear.
like fucking rasputin
All of my life I heard that tariffs caused Great Depression I, but I have NEVER heard any idiot eCONomist explain how sovereign currency devaluations don't do the same thing.
That's bullcrap, and the tariffs came waaay after the damage was done and the boulder was rolling down that mountain of securitization (back leading up to the "Great Crash" it was securitization of stocks while this time it's primarily bonds).
Also, they ignore all that crpola and damage caused by everything super-crook Andrew Mellon, Secretary of the Treasury for three administrations in a frigging row!
Also, the absence of the major tax of the day (from alcoholic beveridge sales) due to Prohibition, said illegal monies laundered through the stock exchange.
Get the big picture, yet?
I call bullshit on "Smoot-Hawley made the Depression worse" lie. Sgt. Doom is right--it didn't. If tarriffs are so bad, why did our economy and the living standard for the great majority of Americans continue to improve right up until the time we got rid of our import tarriffs? And why have things turned to shit since then? I mean turn to shit for everyone except our oligarchs?
Another burned-out shell of an Obama Supporter. Sad.
Smoot-Hawley became law in 1930, before most of America even realized there was a Depression underway.
Nothing wrong with the Global Economic Model or free flow of capital. Problem is Global Economic Model no longer offers many comparative advantages to USA Restricting capital flow will not change much nor would other forms of protectionism. We are screwed unless we live within our means and reduce income disparity. Otherwise ,time for a new Economic Model
Looks like PK got some of his shills to come and defend him here. Probably students, given the typing style. Hopefully they are getting extra credit for their troubles, at least.
LOL, "the imf and other thinkers"... that's supposed to be high praise?
You noticed that too, huh?
Every time he's here or the topic, the claws crawl out of the woodwork
So much for Perceptions Management
Eddie Bernays is embarrassed
PK is "smart" if you're in the Keynes camp. If you're in the Mises-Hayek camp, not so smart. We're in the middle of the reality of this duel, and will soon see who is right. But, realistically, how could PK possibly back away from his years of Keynes pontification....he's "all in" now!
If write Robert Anton Wilson (the dude who humorously defined the Illuminati as the trinity of AT&T, the Roscrucians, and the US Postal Service) were still alive, he would update his definition of the Illuminati to be the trinity of:
Lyndon LaRouche followers
Scientologists, and
Zombie followers of von Mises/Rothbard.
Smartest economists: (alive) Prof. Michael Hudson (coming in later would be Ravi Batra, James Galbraith, Mark Blyth and Dean Baker); (dead) Thorstein Veblen
'Nuff said.....
Sarge! No mention of Milt Friendman, Anna Swartz?
We have Dr Wm Black as well as Stephanie Keyton close to me in Cow Town, but they are Keyensian. You seen Keyton, she is hot!!! I would suggest the MSM interview her, they might bump the numbers on the ratings!
LMFAO, I thought you said Thorstein Veblen. And James Gallbreath. And "best economists."
James Galbraith would be quite possibly the stupidest living economist, if he actually meant the things he says. But, like Krugman, he does not. He says what he says because he perceives that it will please the beast he serves and worships.
Yep, their egos prevent them from doing this http://www.youtube.com/watch?v=WkqgDoo_eZE
Krugman and US policiticians circa 2025:
"Roth IRA holders won't pay a dime in taxes when they withdraw their money. That's not fair!"
(applause from audience)
"Those predatory lenders, like China, took advantage of us! They deserve nothing"
(standing ovation)
Circa 2016.
"IRA's in general have deferred tax liabilities ... we need to tax incrementally, so the Public at large will benefit from the fruits of their labors." ... and ... "China bought up all our gold and silver at ridiculously low prices ... we need to 'tax' their profits by reducing their bond holding values."
You got to think like a politician when discussing policy. Just remember taxes are 'revenue' and spending is 'investment'.
Something to think about: What if the threat of confiscation of 35 to 70% of money invested in large banks overseas exceeds the amount of the tax that would be imposed on a US based multi-national corporation? Would that threat be enough to get them to repatriate the profits earned elsewhere?
Here's my usual "Fuck You Krugman" to Mr. Krugman.
Time to start another war...people are starting to peek behind the curtain and we simply cannot have that. Expect escalating rhetoric in Syria as we denounce the attrocities that will be showing up nightly on our news.
Any time spent reading Paul Krugman is time wasted out of your life that you will never, ever get back.
Just imagine the crap the central bankers can get away with once money can only be moved around by ... central bankers. In their dreams actually, however it does shaft the people again.
No Jew lost a dime in the Cyprus bail out.
Mission Accomplished
Enough! F*ck. Look, go to the ECB website you loon, look at the linage of the masters of the universe. They are NOT Jews, bankster a-holes from Belgium, Spain, Italy and Germany. Not to forget the aristocrat disgusting human running the IMF that being Lagarde.
NONE ARE JEWS! Wall Street are dirty businessmen, actually they are crap at business. That get bailed out by the above elite in a game of age old economic repression of the masses. Study the revolutions of Europe of the last 200 years, same sh*t. Actually Jews get blamed by gutless goverments looking to past the blame.
Capiche?
U forgot the sarc hash......right?
And every day you post another Jew-hating fantasy online to reassure yourself that while you may be a pathetic looser, at least you're not a Jew. Quite an achievement kaiserhoff.
Some of us will continue to point out that the Jewish tribe has monopolized the media, the government, and banking as long as that is true. Free speech is a bitch, for those who do their best to stamp it out.
Why should 1% always dictate to the 99%??????
That's it kaiserhoff, keep yelling about the Jews because you see Jews in positions of power. What do you care if when the time comes to punish the dirty bankster conspirators it will be the rich master manipulators who bribe their way out of any problems and the 95% of honest and hard-working Jews who will be expropriated, crushed, and sent to the "re-education camps". They're all dirty Jews to you, so what the hell do you care, right? Or maybe you believe things like that just can't happen after, say, a series of disastrous wars, recessions, and inflations wipe out the middle class. Sheesh! I guess you missed class when they covered the past hundred years?
Oh yeah, and free speech was not designed to protect bigots from criticism, so stop feeling sorry for your pathetic self.
I have nothing against ethnic Jews, religious or not.
My complaint is against a tribe, within the Jewish community, that always manages to shove aside anyone who is not of that flavor. It happens in universities, law firms, accounting firms, just about any profitable occupation (medicine).
Herr Krugman is a perfect case in point. If he were not a Jew, he would be selling used cars in Hoboken.
"No Sabbatean-Frankist Crypto-Jews lost a dime in the Cyprus bail out."
Fixed it.
Why call them all criminals?
Who said anything about criminals?
Just pointing out the underlying motivation, (the new rules of the road.)
"No Jew lost a dime in the Cyprus bail out."
Boris Berezovsky, who lost much more than a dime, was Jewish.
Boris Berezovsky was born in Moscow on January 23 1946 into a Russian Jewish family. His father, Abram, was a civil engineer and his mother, Anna Gelman, a nurse.
http://www.telegraph.co.uk/news/worldnews/europe/russia/9950088/Boris-Be...
And how do you know he lost money? Clairvoyance?
"The world's smartest economist"
"Damnation by faint praise" defined.
this does put him in the same ball park of the imf and other thinkers.
http://online.wsj.com/article/SB10001424127887323717004578157510789113562.html
http://www.imf.org/external/pubs/ft/spn/2010/spn1004.pdf
Krugman is our Diesel- BOOM, I guess.
Krugman is possessed by demons (literally). Cut him some slack.
I have been suspecting for a few years that there will be another big war or distraction when the SHTF in the finance system. The Cyprus situation shows we are getting close.
Geez,it could have been so much better if in 2008 they just let the damn banks fail.Iceland has the right idea after all. Perhaps the one thing that they absolutely fear is that Cyprus could get along without the EU or Wall Street. Cyprus will drop out.The can has been kicked to the max...