Caption, Please
 

All I can say is, bless the man for working so hard to improve our relations with Old Europe.

Eat the rich.
 

Okay, let's go back to Int'l Monetary Policy 101.

In the beginning, everything was pegged to gold. Then people realized that this meant every currency was pegged to every other, and some countries started running out of gold when other countries came to them and traded excess bumpkinbucks for their gold.

So, they gave that up, and pegged to the dollar, because it was recognized as stable.

but then they realized that monetary policy had to accord with U.S. policy, lest their currency become "overpriced" and no one would want it or the goods they produce.

So people let things float freely, except for small countries with such bad monetary policies that it was better to bind themselves to US monetary policy. They recognized that this prevented them from inflating their own currency by, e.g., printing more money. But it means that they have to have fiscal and monetary discipline lest they fall into the same trap everyone did in the early 1900s

but could big countries sensibly do this? that is, peg? Sure, but then their hands are tied to the monetary policy of the peggee currency. If not, and they pursue inflationary policies, then they will have currency that is not worth as much as it purports to be domestically, exports will fall, and they won't be able to import, because who wants worthless PenskeBuks?

But, let's assume China doesn't care--how would the strategy posited by Sidd work?

To make their goods cheap, they want 1 dollar to buy more Chinese stuff. One way to do that is to say that $1 is now worth 1.5 yuan, so my dollar goes further in China now. But that would break the peg.

So what's the other approach? You deflate the currency internally, so that 1 yuan buys twice as much. But how does one accomplish this? One way is to stop printing money, or even take it out of circulation. Another is to jack up interest rates, which at least temporarily can cause deflation. but are either of those sensible strategies? Nein! Either one will stifle domestic growth in anything beyond the short run.

bad news, club
 

You gave Sidd a compliment?

No, I just am starting to see you more as a gullible child than a thinking adult. Sort of another club.

bad news, club
 

As I said in the short run it benefits our consumers because the French taxpayers francs are being used to give us cheaper products. However, this still distorts the market and makes it inefficient and in the long run that effects everyone negatively.

Are you saying "par-say" for parse, or "ar-uh" for R? I don't want to recite it wrong.

bad news, club
 

you shouldn't be raising children.

bad news, club
 

Well, I would actually ban imports from France, but I'm not pushing that here.
If we have a free trade agreement they can't do that right? Or are you saying that some countries do that, even though there is free trade? Like Fringey said, I'm not up on everything.

Would you just do a "reverse" on every crutch a country gives itself?

Eat the rich.
 

What the Chinese government does is print yuan to buy US dollars. This has the effect of depressing the value of the yuan relative to the US dollar. The Chinese government has been building a huge reserve in US dollars. The Japanese government does this as well, so do other Asian countries. They use the US dollars to buy debt issued by the US government or quasi-guaranteed by the US government (ex Fannie Mae or Freddie Mac securities).

Periodically, there is concern that China or Japan will sell off large quantities of US dollars and cause a currency crisis in the US. Last week, there was a scare that South Korea was going to do that.

bad news, club
 

Spanky, don't worry. Nobody takes her seriously.

Eat the rich.
 

My understanding is that this is a real problem. Apparently, the Japanese have continued to buy the dollar because they have a 30 year policy of doing so and are historically slow to change major policy decisions. However, a movement has begun in Japan to reevaluate the policy. South Korea has not said it will sell off their positions, but has said they are not going to add further to them, which will likely have a depressive effect on the dollar. Bottom line is that our debt is becomming a bigger and bigger problem, which has not been helped by Bush's fiscal policy, the completely irresponsible prescription drug program, and the spiraling amounts relative to GDP that we are now dedicating to health care.

Eat the rich.
 

Who are the suckers who are willing to trade a dollar for a yuan at the pegged rate, though? If they're printing worthless money, who's the idiot who accepts it at face value?

bad news, club
 

You are SO CUTE. If Spanky is indeed some long-time friend of Less, his hide is thicker and hornier than, uh, the thickest, horniest thing you can think of.

Eat the rich.
 

It's easy to maintain a peg that depresses your currency. Every time the intrinsic value of the US dollar falls below the peg, the market sells enough US dollars to the Chinese government to keep the price at the peg. Where a government can runs into trouble is when they try to maintain a strong currency. Soros broke the English pound that way. If the market starts abandoning it, a country needs to repurchase its currency with is reserve of foreign currency. Once a country burns through its reserves, it options are limited. The way you can tell the Chinese are depressing their currency relative to the dollar is that they huge and still growing reserves of US dollars, US government debt &c. If they were propping up the yuan, their reserves would fall.

One effect of the Chinese and Japanese holding so much US government debt, fannie mae debt &c is that it depresses medium and long term interest rates in the US, which has helped the real estate market in the US and helped US corporations finance operations. The Chinese and Japanese policy has also hampered the Fed's attempt to increase medium and long term interest rates by increasing short term interest rates. If Asian countries stop accumulating reserves in US currency, or accumulate at a slower rate, US interest rates are likely to increase and the US real estate market is likely to cool. If Asian countries actuall dump their US reserves, the US will have a financial crisis because US interest rates will spike and the US real estate market will crash. A crash in the real estate market would throw the US into a recession because the US consumer has been driving the current expansion and in contrast business hasn't been spending on hiring, acquisitions &c.

So far, Asian countries have been afraid to dump US currency because their economies are dependent on exporting to the US, and dumping would make their exports less competitive in the US and throw the US into a recession where consumers would buy less of everything including imports from Asia.

Training Helps Those Hurt By Trade???
 

The US produces more college graduates than college-level jobs. Consequently, how is it that training will help workers hurt by trade make as much money as they did before they lost their job? There's already an oversupply of college graduates.

This excerpt is from this article.

Maybe There's Something to this Cowboy Diplomacy
 

• Iraqi officials said Sunday that Syrian authorities had captured Saddam Hussein's half-brother and 29 other officials of the deposed dictator's Baath Party in Syria and handed them over to Iraq in an apparent goodwill gesture. ...
  
  They added that al-Hassan was captured and handed over to Iraqi authorities along with 29 other members of Saddam's collapsed Baath Party, whose Syrian branch has been in power in Damascus since 1963.

Courtesy of Capitan's Quarters

bad news, club
 

Another Saturday night home alone, huh? Explains the image.

Egypt
 

• Bush's Egyptian Success
  
  After the hard-edged partisanship of the post below, let me extend more proper congratulations to the Bush administration regarding yesterday's developments in Egypt. Last night, I got a chance to talk to a veteran Arab journalist who had some very convincing things to say about this. First off, unlike developments in Lebanon and Palestine that were mostly (I don't say entirely) fortuitous coincedences that happened to coincide with administration policy goals, on this front the administration's second-term decision to stark exercizing mild rhetorical and symbolic pressure on Mubarak really does seem to have been the difference-maker here. All throughout the first term, I was arguing Bush should do something of this sort. When he started doing some of it, I was glad, but also very skeptical that he was doing enough. It turns out, though, that relatively mild measures worked.
  
  Second, there's good reason to temper one's optimism. Mubarak and co. are savvy, and don't intend to see themselves booted from power. They're trying to make small concessions in hopes of getting the heat turned off them in order to recover on a later day. The key thing is to make sure that whatever concessions are on offer become a fixed ratchet. The administration -- and, crucially, its successors -- need to be prepared to do this all over again, and probably again and again several more times -- in future opposition-government conflicts in Egypt. What we learned this week is that American pressure really does work as a way of getting moderate change. It's pressure we need to be prepare to use again in the future.

Matt Yglesias

Caption, Please
 

Eat the rich.
 

Agreed that you can do this to a degree, but only to a degree, because it relies on keeping the currency at a point where fluctuations will still bring it back into line with the peg.

The problem (if any) that you posit--greater ownership of american debt--is far different than "depressing" the currency to make goods cheap. That's just not a sustainable strategy, with or without a peg.

Dominos
 

• Lebanon's Prime Minister Omar Karami has announced he and his government are resigning, two weeks after the murder of former PM Rafik Hariri.
  The move came as crowds protested in Beirut, calling for Syrian troops to leave the country.
  
  The Lebanese parliament was also debating an opposition-sponsored motion of no-confidence in the government.
  
  "I am keen the government will not be a hurdle in front of those who want the good for this country," Mr Karami said.
  
  "I declare the resignation of the government that I had the honour to head. May God preserve Lebanon."
  
  His announcement came after a break in the parliamentary debate, which was being televised live.
  
  A cheer went up among more than 10,000 protesters who had gathered in Martyrs Square to demand the resignation of the government and the withdrawal of Syrian troops.
  
  They had defied a ban on demonstrations, which Interior Minister Suleiman Franjieh said had been made on the grounds of "supreme national interests".
  
  
  

http://news.bbc.co.uk/2/hi/in_depth/4305927.stm

Couldn't resist
 

Club isn't alone
 

http://sfgate.com/cgi-bin/article.cg...cstillwell.DTL

Read this.

Tom Hanks died for this
 

http://apnews.myway.com//article/200...D88HP8100.html

FCC decides it was okay to air Private Ryan even with bad words!

Re-fucking-diculous.

Club isn't alone
 

No.

Club isn't alone
 

Once all the native Dutch leave the Netherlands, do you think Sparta Rotterdam will be weaker or stronger? Did the possibly of the Stadium being reserved for executions instead of football impact your answer?

Club isn't alone
 

Bravo amigo!

Eat the rich.
 

This policy may not be "sustainable" but countries can do it for a loooooong time. The Japanese have been depressing the yen relative to the us dollar for over ten years. They like to keep the US dollar worth at least 110 yen or maybe 105 yen, and when the US dollar falls below that level they buy a shitloan of US dollars to push it up. And yes, this is a matter of depressing currency. They prop up the US dollar regardless of whether they hold their reserves in the form of currency or US dollar denominated debt.

Foreigners aren't buying US debt because it's a good investment. The main buyers are Asian banks that want to depress their currency relative to the dollar to assist their export driven economies.

More evidence of global warming.
 

From the Economist:

• More evidence that global warming is man-made:Most published research on climate change looks at the atmosphere. That is partly because the records are good and partly because it is in the atmosphere that the human-induced changes that might be causing it are happening. One of these changes, which would promote global warming, is a rise in the level of so-called greenhouse gases (particularly carbon dioxide) which trap heat from the sun and thus warm the air. Another, which would oppose warming, is a rise in the quantity of sulphate-based aerosols, which encourage cloud formation and thus cool the air by reflecting sunlight back into space. Dr Barnett, however, thinks that the air is the wrong place to look. He would rather look in the sea. Water has a far higher capacity to retain heat than air, so most of any heat that was causing global warming would be expected to end up in the oceans.
  
  And that was what he found. In a follow-up to a preliminary study published four years ago, he looked at ocean-temperature surveys made over the past 65 years. He confirmed that the sea has got warmer since the 1940s, and particularly since the 1960s. Furthermore, it has done so from the top down. At a depth of 700 metres, things are almost unchanged. But surface temperatures in all six of the ocean basins he examined (the north and south Atlantic, Indian and Pacific oceans) have increased by about half a degree Celsius.
  
  So the Earth has, indeed, warmed up over the past few decades, as most climatologists already believed. But the actual pattern of temperature change in each of the six ocean basins is different (see chart), and that diversity allowed Dr Barnett to test the idea that people, rather than natural phenomena, are the reason for the warming. He took two widely respected models of the world's climate (which couple events in the atmosphere with events in the sea, and take account of both greenhouse gases and aerosols) and played with their variables in different ways. He tried mimicking the effects of the natural variability caused by feedback loops within the climate, and also the effects of small changes in the sun's output and the consequences of volcanic eruptions, both of which affect the climate. But the only changes that produced patterns of heating which matched reality were the man-made ones. And the match was good in all six basins. Which is confirmation, in Dr Barnett's eyes at least, that the guilty party in global warming is industrial man....

via Semi-Daily Journal

More evidence of global warming.
 

And so once again you suport my theory. A blogger dumbs down a summarization of what could only be called extremely complex analyses and questionable hypos- and you post as truth. Next week when I say you haven't shown anything, your toadies will scream "Ty repeatedly has proven...."

More evidence of global warming.
 

The Economist is not a blogger, Hank. It's a fairly respected magazine, from England, more to the right than the left.

More evidence of global warming.
 

Over there, yes.

Here? I'd say centrist as it gets.

Club isn't alone
 

Illiterate soccer hooligan.

More evidence of global warming.
 

I have a weird obsession with the Economist. My roommate from law school will attest to it. I have been reading it from cover to cover since I was in high school. If it does not arrive in the mail on Friday - I can't wait the twenty-four hours and I go buy it at some crazy newsstand. Something weird must have happened in my childhood. Maybe there was an Economist next to the bed the first time I had a wet dream. I don't know what happened, but whatever it is I have a weird irrational obsession with that periodical. I am only saying this to establish my expertise on the subject (knowing about the Economist). In fact this is the only subject that has been on the board that I really am an expert on. On every other subject, what may seem like my opinion is probably just some regurgitated editorial from the Economists past.

The Economist is an extremely conservative economic news journal. I guess you could say it has a neo-liberal economic perspective. On social issue they tend to be more liberal. Gay Marriage: no problem etc. The Economist in general presents articles that are highly skeptical as to whether or not there is global climate changing. The Economists general position is we don’t' think it is happening, if it does happen it will be in small amounts and won't effect that many people. And the price to combat rising tempatures will be prohibitive. They have been strongly apposed to implementing the Kyoto accords.

Since that has been the Economist consistent view on this subject for two decades, this Article represents quite a change in the attitude of the Economist editor’s board.

More evidence of global warming.
 

I don't subscribe so I can only see what starts the actual article. Since it differs from the blog quote, I assumed it was the blogger summarizing. You have read the article? The blog quotes and your quotes are direct from the article? Okay.

Only change to my original post is some magazine has summarized the study. There are horribly complex assumption built into what is summarized, and its also based upon thermometers from 50 years ago being accurate to within .5 degree (and read accurately). To say the least you shouldn't take anything from a summary. If you want to take something from it, take it as a recommendation to read the actual results and then challenge those results. If they hold up then maybe it's something. Again, two weeks from now when your Toadies say "Ty proved global warming two weeks ago, remember?" I cannot respond- I have a job-

just understand you're like several 12 year old boys who think they understand sexual intercourse since they've seen some Club International magazines. What they don't know is that seeing a report of the results w/o the detail of how one got there is vastly different than getting into the situation and understanding the compromises and assumptions that need to be made to get to any result.

And what struck me from the blog were the comments "Of course this proves global warming." that's how you guys sound Ty. This supports global warming because a scientist said it does!

And question. You aren't bothered by the admission in the first that they can't find evidence of air temperature increase, so they assume there are 2 problems that cancel each other? Occam's razor anyone?

oh, and spanky- I surely don't know what the Economist has as it's normal take but for an article to begin "More evidence that global warming is man-made:" doesn't strike me as a huge editorial shift- not to mention that this isn't the stuff of editorials.

More evidence of global warming.
 

Still smarting over that Rumsfeld cover, huh?

More evidence of global warming.
 

It's one of the best financial journals out there and I pick it up from time to time when I'm feeling smart, like Hank. That said, I can easily picture them running Swift's "A Modest Proposal" as a straight-faced editorial piece.

More evidence of global warming.
 

Exactly. But you're letting him off too easy, Hank, by just recommending that he read the results. The "results" are no doubt as skewed as this so-called scientist's tree-hugging assumptions. This article is worthless except as an invitation for each one of us to duplicate the study and compare our results to his. Until then, enough of this "global warming" bunkum.

You know, this is just the sort of crap we always hear about the so-called "moon landings." I'm supposed to believe something just because some egghead rocket scientist tells me so? I was born at night, but not last night. At best, the accounts of our so-called "space program" are an invitation for each of us to build a lunar lander and try it for ourselves. Until then, I don't think anyone is in a position to say anthing about anything.

More evidence of global warming.
 

In socialist England maybe, here in the colonies it's centrist, at best.

More evidence of global warming.
 

So you've never picked it up then, have you?

More evidence of global warming.
 

Hmm. Maybe it's the coffee.