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Post by mank on Aug 2, 2013 4:38:38 GMT 3
Fimbo, I wonder what evidence you are citing. Zimbabwe is not doing well at all as a borrower. Neither is it doing well satisfying its public service personnel. What do you really mean by the following? ...The political power of constituencies like teachers, the military, doctors, MPs, civil servants etc is such that there is really no risk that the government will run out of fancy pieces of paper to give them. Of course governments will never run out pieces of paper to give its subjects. But not every piece of paper that a government dishes out in the name of money is money! Money is defined by its acceptability as a medium of trade. I was in the DRC in 1995 (then Zaire). A Kenya shilling was changing for 70 New Zaire when I arrived. Within two weeks it was changing for 700 New Zaire (at least that's what they were quoting, but no one would change from anything to New Zaire - even shops were not accepting New Zaire). Private workers were pricing their services in terms of goods they needed (goats, cassava, etc). I don't know if government workers were reporting to work, but if they were, it cannot be for the salary. Money changers were lining up the streets with big bundles of New Zaire tied up with huge rubber bands the same way I used to tie up piles of used newspaper for sale to butcheries. When they needed to go somewhere they just walked and left the bundles of "money" behind. OtishOtish, There is your evidence right there. Despite incredible mismanagement, as far as I know Comrade Mugabe never defaulted on his "debts" and Zimbabwe was never bankrupt. Quite so. We should all emulate Comrade Bob's economic model: his solution to the problem of debt---i.e. simply mismanage your affairs to such an extent that nobody will lend you money---is unusual, but why not?...
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Post by nok on Aug 2, 2013 13:45:39 GMT 3
Jakaswanga; 3 Options you say ; ummm.... I see Mr. KRA as the last man standing.
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Post by jakaswanga on Aug 2, 2013 18:50:17 GMT 3
A country cannot go broke when it borrows on its own currency. The government can just print paper to pay off its debtors, employees, whatever Fimbo, How would the country be able to continue borrowing in its own currency? Where would the money be coming from? Brother Mank, For a moment I had thought Fimbo was being emmm did you say çhovya chovya elsewhere!? and I was content to shrug. Then he mentioned Zimbabue and I groaned. PRINTING PRESS AD INFINITUM AS THE MAGIC WAND [In the Eurozone this was known as the BIG BAZOOKA option!] I think Fimbos printing option would only be true, if the confidence in the currency stayed the same even as its quantity in the market increased without any additional value creation, which means the relative inflation which results from printing given quantities money, does not become hyper-inflation, which essentially means the currency is not even worth the paper it is printed on. ---This is what happened recently in Zimbabue. 1. [Mank, this Zimbabue case was unique: at one point they printed a 1 Zillion note --should that be more than 16 zeros? . The majority of the population had by then of course stopped using the official currency as a means of facilitating transactions, or ascertaining comparative values of products and services in the market place! And I think there was a week in which an inflation rate was recorded of 1M %. Only theoritical economists were still in the market, studying this test-tube case of economics upside down! courtesy of comrade Septuagenarian Mugabe.] FIMBO: THE bailout of zimbabue was done by the Chinese overseas trading bank and her affliates. DEBT CEILING RAISE REPEATEDLY by USA congress: ---Mentioned by Otishotish.2. The USA in theory, has printed its way out of the [banking crisis initiated] recession. The great OBAMA [WALL STREET] bail-out was a dollar printing press run, but the MARKET confidence in the dollar ---which is a lot of peoples reserve currency including the Chinese, did not collapse, nay, did not even as much as contemplate waivering! Why [this rock solidity of the dollar}? I guess people looked at the real value of the dollar: the productive prowess and organisational agility of the USA as an economy; her role as a consumerist motor of the world economy; and her military might ---ability to punish rebels who may contemplate an alternative world reserve currency other than the dollar. But majorly I think, the super-development of USA productive forces is the foundation of the worldwide confidence. Her abundance and capacity to attract human super talents in every field from all over the world, remains testimony to her future as a mecca of science and competititve mankind. Instils her confidence in the future. May be not as a superpower, but still a formidable power house. Mobilised into mass production, high or low tech, the USA productive forces is a monstrous potential never seen in history. That translates into market confidence. Globally. That is what I think. I therefore will maintain, if your country is not backed by that kind of productive potential, and has no recent history of such a show of productiion abilities, and you print money like paper, your currency will collapse. It would be less than toilet paper! 'Backed by no gold in the vaults' --to use an old expression!-- 'it is an empty boast!' Debtors will only accept a 'currency' they can exchange for real value internationally. Now or later. The doctrine of security. Haha Mank, it is to avoid weirdo economists like our friend Fimbo here, that I insist on studying how Hitlerite Germany did it! You get me amigo!?
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Post by jakaswanga on Aug 2, 2013 19:03:02 GMT 3
Fimbo, I was in the DRC in 1995 (then Zaire). A Kenya shilling was changing for 70 New Zaire when I arrived. Within two weeks it was changing for 700 New Zaire (at least that's what they were quoting, but no one would change from anything to New Zaire - even shops were not accepting New Zaire). Private workers were pricing their services in terms of goods they needed (goats, cassava, etc). I don't know if government workers were reporting to work, but if they were, it cannot be for the salary. Money changers were lining up the streets with big bundles of New Zaire tied up with huge rubber bands the same way I used to tie up piles of used newspaper for sale to butcheries. When they needed to go somewhere they just walked and left the bundles of "money" behind. Quite so. We should all emulate Comrade Bob's economic model: his solution to the problem of debt---i.e. simply mismanage your affairs to such an extent that nobody will lend you money---is unusual, but why not?... Mank! so you were there! Did you see the weights ---when you count money in KILOGRAMS! 20kg of 1000 denomination bills buys this.. 10kg of 10,000 denomination bills buys ... And trucks [double trailers come to the money market piled to the top] loaded with bundles of notes like Unga Ngano is ferried in Kenya lorries! One has to see it to believe it! Mank that is when you 'rational economists' look funny to me! and I feel like punching you in the jaw!
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Post by OtishOtish on Aug 2, 2013 19:36:53 GMT 3
Mank that is when you 'rational economists' look funny to me! and I feel like punching you in the jaw! Jakaswanga: Here's one of those d-scientists commenting on warnings in 2007 that 2008 on might not be so great: "The best and only realistic thing you can do in this context is to keep your eyes open and hope for the best."which is pretty much how Mama Mboga recently reacted to the news that this month her teacher-customers might be a bit short on the necessary. www.economist.com/node/14165405
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Post by jakaswanga on Aug 2, 2013 20:23:39 GMT 3
Mank that is when you 'rational economists' look funny to me! and I feel like punching you in the jaw! Jakaswanga: Here's one of those d-scientists commenting on warnings in 2007 that 2008 on might not be so great: "The best and only realistic thing you can do in this context is to keep your eyes open and hope for the best."which is pretty much how Mama Mboga recently reacted to the news that this month her teacher-customers might be a bit short on the necessary. Yes, I am afraid we teachers are going to sell all those fancy laptops. Sell school furniture, and anything else we find. Then many will personally climb on top of their boda-boda bikes and apikos to make sure they are not short-changed by hired 'pilots' . In the Congo, Mobuto during a passing ouT ceremony at a military base told the new soldiers. There will be no pay, but then you will have a gun and ammo. Use it to get paid, fool.So teachers miss July pay? they have to make that deficit somewhow, not? Kazungu Kambi and his lot may want a good lesson in micro-economics. Not all of us doubting=thomases condemn all economists. Only a certain type wont do the job. Did I not say Hjalmar Schacht, Nazi Germany's main man at econs, works wonders where your high-flying Harvard-Yale-London Oxford fella is clueless? Well, some doctors are better than some doctors at the same ailment! you will hear it if you tune 'radio trattoir', even if medical schools do not grade doctors into honours and passes!
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Post by mank on Aug 2, 2013 20:34:09 GMT 3
Fimbo, I was in the DRC in 1995 (then Zaire). A Kenya shilling was changing for 70 New Zaire when I arrived. Within two weeks it was changing for 700 New Zaire (at least that's what they were quoting, but no one would change from anything to New Zaire - even shops were not accepting New Zaire). Private workers were pricing their services in terms of goods they needed (goats, cassava, etc). I don't know if government workers were reporting to work, but if they were, it cannot be for the salary. Money changers were lining up the streets with big bundles of New Zaire tied up with huge rubber bands the same way I used to tie up piles of used newspaper for sale to butcheries. When they needed to go somewhere they just walked and left the bundles of "money" behind. Mank! so you were there! Did you see the weights ---when you count money in KILOGRAMS! 20kg of 1000 denomination bills buys this.. 10kg of 10,000 denomination bills buys ... And trucks [double trailers come to the money market piled to the top] loaded with bundles of notes like Unga Ngano is ferried in Kenya lorries! One has to see it to believe it! Mank that is when you 'rational economists' look funny to me! and I feel like punching you in the jaw! Hey Amigo, why punch my jaw now? Its Fimbo's jaw you should want to punch. He inspired those thoughts! Yes, indeed I was there when they would count money in kilograms ... in many cases they would not even bother to weigh it. They would just look at the height of the pile and say "ok, I owe you NZR 1 M, that's just about that amount." I made a mistake of contributing a few Ksh. at a church, and at the end everyone was pointing at me as a rich guy. One face of baba Moi would give you a lot of bread there! Amigo, you raise good thoughts to ponder. I will be back.
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Post by OtishOtish on Aug 2, 2013 21:13:26 GMT 3
Only a certain type wont do the job. Did I not say Hjalmar Schacht, Nazi Germany's main man at econs, works wonders where your high-flying Harvard-Yale-London Oxford fella is clueless? Er ... Nazi Germany had economists, and then they had economists; I'd make a careful distinction. Much is known of Hitler's "dealings" with those deemed to have "no racial value". Less discussed are his dealings with those of "no economic value". One of his "brighter" economists once calculated the cost to the state of a single "mental defective"/"idiot", as he put it, and then extrapolated this to the national level, to determine the total cost to the GDP. On that basis, Aktion-T4, a euthanasia program, was developed to rid the realm of "unproductive humans".
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Post by mank on Aug 2, 2013 23:56:16 GMT 3
Mank that is when you 'rational economists' look funny to me! and I feel like punching you in the jaw! Jakaswanga: Here's one of those d-scientists commenting on warnings in 2007 that 2008 on might not be so great: "The best and only realistic thing you can do in this context is to keep your eyes open and hope for the best."which is pretty much how Mama Mboga recently reacted to the news that this month her teacher-customers might be a bit short on the necessary. www.economist.com/node/14165405 OtishOtish, Yeah, yah, that d-word had to come up. Good thing you brought it up in positive context. Are you a journalist, or do you just envy them for what they do? Theirs is the profession I know to deceive by merely rearranging words rather than adding their own ... I was ready to condemn the professor, thinking that he indeed said of economics that: "The best and only realistic thing you can do in this context is to keep your eyes open and hope for the best." If an economist ever advises you to "... hope for the best", he or she won't be playing the economist's role in doing so. Upon reading the story, it is a "thumps up!" Change that d to b amigo, for "beautiful." In this case the professor is simply saying that just like you may not foresee a car swerving in front of you as you drive, till it does, (a shortcoming everyone can appreciate to be human), and you just drive watching out and hoping that nobody swerves in front of you, economists would have had no superhuman sensors for the magnitude of the 2008 shocks ... and their models were addressing the small bumps that had revealed themselves. The professor gives a great metaphor in that argument, to help those who criticize economics for not foreseeing the crisis. If there can be such a thing as good driving, or piloting, absent being able to forecast a crash that will be caused by a drank driver ahead, why is economics to be judged by how much it can forecast of random shocks rather than what it does with knowable information? Economics is not a science for foretelling the unknowable. ... I might have to qualify that because economics, unlike the driver of what might happen down the road, is not totally blind to the future - just that s/he is not in charge of foretelling the future! I was in a rush: now let me add a point of clarification. One of the first concepts to learn in economics is the Ceteris paribus principle. This is a tool that you must be equiped with, to add or decipher valuable information in a world of uncertainty. Therefore, one thing that is certain and acceptable to economists is that uncertainty is a fact of life - economists don't pretend to have the power to remove uncertainty. They only pride in the ability to provide valuable info under given circumstances. They can forecast circumstances, but such forecasting is also based on an assumption of certain other unknown factors being at certain levels ( ceteris paribus). That's not unlike the driver. A driver leaving point A can tell you the time he will arrive at point B. If he's slowed enroute because of accident that blocks the road, then his deviation from the forecasted arrival time will be understood, as long as it is comminsurate with the delay. More over the driver keeps a certain speed behind other cars, based on an assumption of normal driving for those cars. Should the car infront press on the emergency break, the driver will respond at such a time. However no driver can forecast all possible emergency breaks infront of him ... he just has to drive based on normal driving style, but still modifying that style at every point with the immediate circumstances of that moment - his skill is not in seing all that's ahead before it happens, rather of being able to anticipate what can be anticipated, and having an assortment of skills to react to what unfolds. Economists are alike, yet they deal with a world filled with much more uncertainty. So it is upon those who use economic studies to know what assumptions those studies are based on, and how closely those assumption hold in a system they wish to apply the studies.
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Post by mank on Aug 3, 2013 3:04:42 GMT 3
Fimbo, How would the country be able to continue borrowing in its own currency? Where would the money be coming from? Brother Mank, For a moment I had thought Fimbo was being emmm did you say çhovya chovya elsewhere!? and I was content to shrug I saw it from far. He was no Kamale there. His sarcasm left too much to be desired ... his punchline was something like "Duh ... DeLarue of course." I think the lesson here is, we need to know who the His Excellencies get their advise from. Fimbo could have been very pleasing to a dreamy His Excellency (remember Idi could see Uganda invading and beating the living hell out of Israel), and all of a sudden we have a disaster with no ill intent! Then he mentioned Zimbabue and I groaned. PRINTING PRESS AD INFINITUM AS THE MAGIC WAND [In the Eurozone this was known as the BIG BAZOOKA option!] You can run the press for quite a while if you are the His Excellency of a large economy. It will take a while for the global economy to give up on your paper. But it will certainly catch up with an addicted His Excellency, as it finally caught up with the Europeans. By the way, was money supply any a factor in the fall of the British Empire? I think Fimbos printing option would only be true, if the confidence in the currency stayed the same even as its quantity in the market increased without any additional value creation, .... I told you. We are outing that closet economist in the historian! I suspect the above is really what has happened in the US in recent years. With basically every pocket of the global economy groaning with pains of the 2008 financial crisis, US was in a unique position of pumping more dollars into the system without significantly diluting its dollar. The US, as a heavy weight, was still a better bet than many, as a banker for the world. It helped that all the Eurozone was offering the global market is shock and fear. Money had to stay in some form, and you can bet even while the spigot was open full throttle, the dollar remained a priority denomination for wealth - it has proven staying power even if it wavers, the world would think. Therefore Fimbo was right to an extent when he said that "it depends on capacity of the economy ..." Still, even America cannot print money for ever, without serious consequences. That is why they are ever on guard to see how far any policies in practice are messing with the dollar. They are ever conscious of the fact that it is not money simply because it is written money .... that it has to command an appeal among other currencies. 1. [Mank, this Zimbabue case was unique: at one point they printed a 1 Zillion note --should that be more than 16 zeros? . The majority of the population had by then of course stopped using the official currency as a means of facilitating transactions, or ascertaining comparative values of products and services in the market place! And I think there was a week in which an inflation rate was recorded of 1M %. Only theoritical economists were still in the market, studying this test-tube case of economics upside down! courtesy of comrade Septuagenarian Mugabe.] No kidding! Such rates of inflation will get the attention of many an economist. FIMBO: THE bailout of zimbabue was done by the Chinese overseas trading bank and her affliates. And the Chinese probably did this knowing that they will remove from Zimbabwe something that's not enumerated in Mugabe's dollars! They don't just go around the world looking for delinquents to bail out. Self interest is king ... but it solves weird problems of the world ... Mugabe got help, Chinese dream got a chance! DEBT CEILING RAISE REPEATEDLY by USA congress: ---Mentioned by Otishotish.2. The USA in theory, has printed its way out of the [banking crisis initiated] recession. The great OBAMA [WALL STREET] bail-out was a dollar printing press run, but the MARKET confidence in the dollar ---which is a lot of peoples reserve currency including the Chinese, did not collapse, nay, did not even as much as contemplate waivering! Why [this rock solidity of the dollar}? I guess people looked at the real value of the dollar: the productive prowess and organisational agility of the USA as an economy; her role as a consumerist motor of the world economy; and her military might ---ability to punish rebels who may contemplate an alternative world reserve currency other than the dollar. But majorly I think, the super-development of USA productive forces is the foundation of the worldwide confidence. Her abundance and capacity to attract human super talents in every field from all over the world, remains testimony to her future as a mecca of science and competititve mankind. Instils her confidence in the future. May be not as a superpower, but still a formidable power house. Mobilised into mass production, high or low tech, the USA productive forces is a monstrous potential never seen in history. That translates into market confidence. Globally. That is what I think. I therefore will maintain, if your country is not backed by that kind of productive potential, and has no recent history of such a show of productiion abilities, and you print money like paper, your currency will collapse. It would be less than toilet paper! 'Backed by no gold in the vaults' --to use an old expression!-- 'it is an empty boast!' Debtors will only accept a 'currency' they can exchange for real value internationally. Now or later. The doctrine of security. Needless to say, amigo, on that issue we think alike! To add to my earlier rationalization of why US could print money without seriously hurting the value of its currency, think about what the money was for! It went to support recovery of proven industries that the world at large would have felt the bang, had they collapsed ... someone (I think Fimbo) mentioned the multiplier recently. You can be sure that by saving the US motor industry, the dollar saved much pain to global economies that have a relation with the US motor industry. But not just those with direct linkages ... the economy is highly linked. The American investor who makes money by manufacturing cars puts that money into something else that someone else relies on to make money ... and the chain continues. That chain would have been broken by the collapse of the American auto industry. The banking sector is even more trivial - So, looking at the supply of dollars that US has so much expanded from 2008, it is not the typical "paper money" spill that the Mugabes and Kuku wa Zabanga do. The world actually had a thirst for extra dollars! No surprise therefore that the dollar has remained strong, or has not lost as much value as would have been the case in a typical case of money printing. Another thing about US money press is that even domestically, US is ever investing. Borrowing is no problem really, if you put the debt into projects that will recoup their cost, either directly, or through their product (e.g. through better roads, a better educated generation, etc) ... not so if you borrow just so you can send your Mpig on another royal tour around the world! ... The stoop aid kinds of projects we're seeing in some countries. Haha Mank, it is to avoid weirdo economists like our friend Fimbo here, that I insist on studying how Hitlerite Germany did it! You get me amigo!? ... I like OtishOtish's extension of this.
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fimbo
Junior Member
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Post by fimbo on Aug 3, 2013 6:27:58 GMT 3
Mank, I was only providing a positive rather than a normative analysis of the situation.
You seems to have rubbished the printing press option when we all know that is the most likely scenario for Jubilee to wiggle out of this quagmire.
The only other alternatives are to f** the beneficiaries of government largesse or f** its debtors (otherwise known as a default/bankruptcy).
On a side note, there are ways to deal printing press, as inflation expectation became elevated, the CBK may raise interest rates to mop up the any excess liquidity.
Another side note, is there a Credit Default Swap market for our Treasury Bills and Treasury Bonds. If there was one, I bet the prices of those CDSes have hardly budged.
The moral of the story here is that politics trumps economics. The administration will deal with political imperatives before economic ones.
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fimbo
Junior Member
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Post by fimbo on Aug 3, 2013 7:03:39 GMT 3
...
Like I said, I am not advocating what you seem to be attributing to me. I am merely point out some facts. Full disclosure, I am not even a Jubilee supporter.
I think you have it all backwards. The government spends (purchases goods and services) then goes out looking for ways to pay for its spending. If the purchases were on useless things then paying for them is problematic. On the other hand if the purchases increased productive potential then there is less problems finding the money.
I am having difficulty imagining how a government can spend AD INFINITUM unproductively. After all it has to spend before paying the piper!!!
Often a policy maker will find that the government has ran out of money because of past mistakes, so what to do? Do you stop doing the necessary things because "there is no money?"
Monetary policy is not for the fainthearted.
I think we are just about ready to delve into Keynesian verses Austrian School debate on Business Cycles, what they are, where they come from and what to do about them.
One thing both the Keynesians and Austrian School agree on is that when a country has it own currency, it will not default on local debts.
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Post by jakaswanga on Aug 3, 2013 10:17:54 GMT 3
Like I said, I am not advocating what you seem to be attributing to me. I am merely point out some facts. Full disclosure, I am not even a Jubilee supporter. Come on F imbo, we are discussing economic theory here, and Jubilee is merely half a comma in the footnotes. If fin-sec Rotich decides to activate his brains from their current 'tropical hibernation' and gives a detailed presentation on how he will handle the current cash-strap of the Kenyan state, then may be we will afford him a glance! Now all Rotich is doing is fiddling with payslips, now of soldiers, then of teachers, then county governments, and he is too jua-kali for my made in Girmania finance sensibilities. But I agree, like you I think he will have to print money. Like Moi did in the run to the 1997 election to fund his 'election'! CBK has to increase the money supply. Decrease the value of the Kenyan shilling. He has to be the Inflationman. ---If we add the taxes already in place to a further devaluation in the offing I think we are heading toward the bankrupcy of Wanjiku.Oh yeah? set me right! when does the option of running the printing press loom? if not already during crisis where otherwise the government will be defaulting on its obligations? ---Having failed to convince creditors to give it a life-line. For corrupt and unstable countries, the risk-index means they always have a problem accessing loans, and if they do, the terms, even by the great IMF and WB, are still so horrible that, in the African case, we all went into the smiling arms of the eastern dragon soon as he looked our way. This is your opening statement Fimbo We have seen countries go broke and bankrupt having printed their own money. We have seen not only debtors, but citizens too abandon the paper currency because it is worthless. Your statement then does include a dangerous fallacy: that the value of the money stays the same regardless of massive increases in the quantity circulating.Only the USA and a few others can manage that. When Rotich finally succumbs to the inevitable and starts the Delaroue press running, we will be talking inflation. Kenya is in no position to increase her money supply, while maintaining the value of the ksh. So Flood the market, cheapen the price will hold for us. The Kenya shilling will be 'chodhre ka gik molewo e chiro'! that is from 86 to the dollar, it could 'worthtless' to 140 to the dollar! ---unless like Zimbabue, we mortgage some good natural resources to a money man. May be you misunderstood. I used the word ad-infinitum in reference to the great bazooka option of the ECB: Not spending, but opening the taps of money supply full throttle like the Obama administration had done, until the problem is solved. Printing press is of course not an option in the EU, because of ideological reasons, sometimes called moral reservations emanating from the Lutheran-Weber philosophical base of the German Central Bankers. Eg: If Kenyan GDP is just $40bn. Weber would think: PAY AS YOU EARN. So Kenyan politicians and bureaucrats could never deserve salaries comparable to USA senators [$15 trn GDP]. They have to eat humble pie. Very humble pie, because that is what they earn for the country, and it is what the country then, in turn, should pay them for it. Agreed. And that is why I go for Hitler's Schacht in monetary policy. Only economist I know in history who boasted he could stop a hyperinflation in no time and turn the economy around totally in 3 years. AND HE DID. These days economists talk of natural rates of unemployment of 35% [Spain], 40% [Kenya], 60% [Haiti], 12% [USA]. What do you say when you know Hjalmar looked at Hitler and said: I guarantee zero rate of unemployment in 3 years. And he did. Yes, I found out just how tough-hearted a real economist in politics need be in a crisis. And using that standard, I have come to characterise your Bernankes, Draghis, Rotichs and Ndung'us, Moyos and Zumas as children diks in a large hor! Worthless. But they also agree, the price would very well be the total impoverisation of the population, the kingdom of widespread squalor. On paper, the government of Zimbabue paid her civil servants yes, with its killion, zillion bank denominations. I n practice nobody was accepting these in the market. Not even the governmet banks themselves would accept deposits in its zillions denominations. No, the South african rand was the local currency, in addition to coins, and the US dollar of course. NB: I think the south african central bank increase the rand supply, to cater for the new country which had adopted the rand as her official unoffical currency! So to me, tales about none bankruptcies when you have own currency are yarns I read with delight, like the one of Jesus feeding 6 thousand with 6 loaves. true he did, the bible says. But I would never run a secondary school on it ---dotcoms would burn the school down--- let alone a government on it!
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Post by jakaswanga on Aug 3, 2013 10:26:59 GMT 3
Mank, I was only providing a positive rather than a normative analysis of the situation. You seems to have rubbished the printing press option when we all know that is the most likely scenario for Jubilee to wiggle out of this quagmire. The only other alternatives are to f** the beneficiaries of government largesse or f** its debtors (otherwise known as a default/bankruptcy). On a side note, there are ways to deal printing press, as inflation expectation became elevated, the CBK may raise interest rates to mop up the any excess liquidity. Another side note, is there a Credit Default Swap market for our Treasury Bills and Treasury Bonds. If there was one, I bet the prices of those CDSes have hardly budged. The moral of the story here is that politics trumps economics. The administration will deal with political imperatives before economic ones. Fimbo, with the following quote, I was thinking Mank had pretty well covered his bases? you do not think so? COMMAND AN APPEAL AMONG OTHER CURRENCIES! Rotich can print, no problem, but what does he have in store to maintain that c ommand appeal, possibly to be dumbed down as exchange rate at the forex bureaus? a Nigerian once complained to me: the dollar has lost respect for the Naira! since then I refer to exchange rate as 'respect rate'!
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Post by jakaswanga on Aug 3, 2013 12:57:43 GMT 3
Brother Mank, For a moment I had thought Fimbo was being emmm did you say çhovya chovya elsewhere!? and I was content to shrug I saw it from far. He was no Kamale there. His sarcasm left too much to be desired ... his punchline was something like "Duh ... DeLarue of course." I think the lesson here is, we need to know who the His Excellencies get their advise from. Fimbo could have been very pleasing to a dreamy His Excellency (remember Idi could see Uganda invading and beating the living hell out of Israel), and all of a sudden we have a disaster with no ill intent! Then he mentioned Zimbabue and I groaned. PRINTING PRESS AD INFINITUM AS THE MAGIC WAND [In the Eurozone this was known as the BIG BAZOOKA option!] You can run the press for quite a while if you are the His Excellency of a large economy. It will take a while for the global economy to give up on your paper. But it will certainly catch up with an addicted His Excellency, as it finally caught up with the Europeans. By the way, was money supply any a factor in the fall of the British Empire? ....................... ... I like OtishOtish's extension of this. Now that you mention the British empire, and ask if money supply was any factor in the fall thereof, the central position of debt and bankers in the modern economy, becomes even more imperative to discuss. One of the greatest and core disputes which, to me, heralds the fall of the British empire, and of any colonial project, is about the conditions of credit. Debt bondage. And the natural desire of humans to get from under it. America, not yet then the USA, but what we can mostly call New Engeland ---- Rhode Island, Massachusetts, New Hampshire Connecticut, Pennsylvania, New York,----- was becoming one of the most dynamic colonies of Great Britain, a rich picking, and they were discovering stuff and going places. For instance, the need to issue their own 'bills of credit', IOUs and conduct local business and respond to local crises such as war against the Indians and the Spanish, quickly. England and London was far, and the London bankers running her currency, the pound sterling, even further from the priorities on the ground in the New World. Not to mention the snob and scorn of them aristocrats for the lowly wildmen whom they had banished abroad. Something had to give. Too, L ondon merchants of course wanted to keep the colonies in lucrative bondage, for that was the method of making super profits. For this, o ne has to CONTROL the currency in which the trade, or the debts' are conducted. The economic policy machinery. Key then, is contol over the currency of financial repatriation, the currency in which the created wealth and debts are denoted. ----NB--- No colony will be able to print their way out of that iron fix. Adolf Hitler would later realise this as he looked at the terms the treaty of Versailles imposed on Germany; and he would convice a large section of the German intelligentsia, who already had realised this, that he was seriously going to trash Versaillles, and get away with it. He did, then got greedy, in his turn plotting to dominate other nations. And BOOM, Germany was bombed back to pre-history ---only to rise again like the fabled Phoenix. But that is another story!]The desire of the Lords of credit to control currencies is perfectly understandable: some currencies can collapse, and if you hold all your wealth in it, down you go. Or, if all your debtors hold their wealth in it, and they go under with them, you too in time must sink! ---like the toxic mortgage crisis in the USA just shown. Debt interest rates is a proboscis of sucking others dry, and the bible called it 'usury'! The bank of England then passed its CURRENCY acts of 1751 --against New England territories at first, specifically meant to keep New England in debt bondage, ie banning them from issuing own currency or IOUs! Then later the 1764 Currency act of Mother England against all colonies. ENGRAVING THE DEBT BONDAGE IN LAW FOREVER. It had to unravel, given the dynamism of the American colonies. The 'war' of American independence had began by a currency act by the far-off motherland. John Adams: ' there are two ways to colonise and enslave a people. By war, and by debt. We shall never succumb to either. Not before Engeland, not before God.'[I will find out if by this time [the 1770s] lakes Like Kavirondo or Victoria had been 'discovered' or not! So yes Mank, it was the politics of money supply, who controls it and in what currency, that broke up the British empire. If you ask me, which you did! --that is a 'shambol'Once colony America rebelled, the rest would follow. ---I have forgotten how long it took Kenya to achieve her independence from the UK, but may be Kenya will, like the Americans, at long last! At another level of course the colonial enterprise just became too expensive to sustain! And loss-making businessess have to fold up sooner or later. Money supply dried up, and no amount of printing press runs would bluff the stalled engine on! NB: Mank my brother. You like otishotish's extension on this ... arresting run-away inflation and wonders of the Nazi chief economist? Since when do you do 'morality' in econometrics? Otishotish's is a moral intervention, and I will look into it in the historical class, but just when the economists bug bit me, you will spare me the drama! Sawa?
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Post by mank on Aug 3, 2013 17:31:38 GMT 3
Oh brother Jakaswanga,
That bug bit, and bit well. Two measures of that kerosine of yours is on me if (and when) the very rare occasion of our meeting occurs. Before you say that chance is practically zero, let me tell you that some American won two major lotteries on the same day just a few weeks ago ... there is no chance too small to materialize even when it is too small to enumerate - just don't go paying for them. You won this from me at least when you responded so aptly to Fimbo's attempt to throw away his baby and blame us for malicious damage. It seems Fimbo is no longer giving Rotich and the son of Jomo "an all clear on" the road to mindless printing any more.
Fimbo, I am relieved.
I am not sure what fire I got myself into with that Hitleritte thing. What is of Hitler than fits economic models really? I had many teachers in my student life that answered that kind of question with "that's a very good question", and I was left waiting for a good answer each time. Mention Hitler, and its time for people-talk. There was no economics in my pitch; sorry to disappoint. But I am not yet convinced that Hitler was not an economic agent. If you have a good description from psychologists as to what really mattered to Hitler, then I bet it is also apparent to you that Hitler went for that value of his the same way a monopolist goes for the last penny a buyer is willing to pay. But let's rest that lunatic.
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Post by OtishOtish on Aug 3, 2013 20:50:02 GMT 3
Friend Mank: Hitler certainly fancied himself as an economist. In 1936, having disagreed with Schacht over the need to spend money and effort on re-armament, the Fuhrer personally led the drafting of the Four-Year Plan for the German economy. His memo on the plan is an interesting read. (The memo was first produced as evidence, Exhibit 48, by the Schacht defense team at the Nuernberg Trials: Goering had been put in charge; Schacht was shown the door the following year and later imprisoned, and so he could reasonably claim to having not been "part of it".) The Fuhrer As Economist: First, a shot across the bows of the lesser economists and all who get excited about economic theories:"The nation does not live for the economy or for the leaders of the economy, for the economic or financial theories; but finance and economy, the leaders of the economy, and all theories have to serve exclusively this struggle for the maintenance of our nation"
[page 788 of ***] ... Next, the private sector being told that it has to perform or, like the "unproductive humans" being subjected to euthanasia, lose the right to exist:"Above all, it is not the task of the governmental economic institutions to rack their brains over production methods. This matter does not concern the Ministry of Economics at all. Either we have a private economy today, then it is its task to rack its brains about production methods, or we believe that the determination of the production methods is the task of the government; then we do not need the private economy any longer." ... The Ministry of Economics has only to set the tasks of the national economy; the private industry has to fulfill them. But if the private industry considers itself unable to do this, then the National Socialist State will know by itself how to resolve the problem.[page 790 of ***] Finally, an idea of where all this was going:"I therefore deem necessary the passing of two laws by the Reichstag: ... b. a law making Jewry in its entirety answerable for damage done to German industry and thereby to the German nation by individual members of this criminal group. ... I herewith set the following tasks;
I. The German Armed Forces must be ready for combat within four years.
II. The German economy must be mobilized for war within four years."[pages 791-792 of ***] *** = NUERNBERG MILITARY TRIBUNAL, DOCUMENT NI-4955, PROSECUTION EXHIBIT 411, pp 786-792 www.mazal.org/archive/nmt/07/NMT07-T0786.htm
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Post by OtishOtish on Aug 3, 2013 20:59:57 GMT 3
And now, how about the original question/point and it other implied questions: Whither the Kenyan economy? Is it economic-planning-by-confusion? Will taxpayers in my other country have to contribute to saving Kenya from bankruptcy?
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Post by jakaswanga on Aug 3, 2013 22:18:24 GMT 3
Friend Mank: Hitler certainly fancied himself as an economist. In 1936, having disagreed with Schacht over the need to spend money and effort on re-armament, the Fuhrer personally led the drafting of the Four-Year Plan for the German economy. His memo on the plan is an interesting read. (The memo was first produced as evidence, Exhibit 48, by the Schacht defense team at the Nuernberg Trials: Goering had been put in charge; Schacht was shown the door the following year and later imprisoned, and so he could reasonably claim to having not been "part of it".) The Fuhrer As Economist: First, a short across the bows of the lesser economists and all who get excited about economic theories:"The nation does not live for the economy or for the leaders of the economy, for the economic or financial theories; but finance and economy, the leaders of the economy, and all theories have to serve exclusively this struggle for the maintenance of our nation"
[page 788 of ***] ... Next, the private sector being told that it has to perform or, like the "unproductive humans" being subjected to euthanasia, lose the right to exist:"Above all, it is not the task of the governmental economic institutions to rack their brains over production methods. This matter does not concern the Ministry of Economics at all. Either we have a private economy today, then it is its task to rack its brains about production methods, or we believe that the determination of the production methods is the task of the government; then we do not need the private economy any longer." ... The Ministry of Economics has only to set the tasks of the national economy; the private industry has to fulfill them. But if the private industry considers itself unable to do this, then the National Socialist State will know by itself how to resolve the problem.[page 790 of ***] Finally, an idea of where all this was going:"I therefore deem necessary the passing of two laws by the Reichstag: ... b. a law making Jewry in its entirety answerable for damage done to German industry and thereby to the German nation by individual members of this criminal group. ... I herewith set the following tasks;
I. The German Armed Forces must be ready for combat within four years.
II. The German economy must be mobilized for war within four years."[pages 791-792 of ***] *** = NUERNBERG MILITARY TRIBUNAL, DOCUMENT NI-4955, PROSECUTION EXHIBIT 411, pp 786-792 www.mazal.org/archive/nmt/07/NMT07-T0786.htm Otishotish, Setting the tasks for economists is not being or fancying onself an economist, methinks. He is the Fuhrer, and fancies himself knowledgeable of the DESTINY of his nation. Then he sets tasks to be fulfilled toward that ambition, program of his party [NAZI] ---including the tasks of the faculty/ministry of sports. That does not make the Fuhrer a sportsman. Just like when he orders engineers to come up with a 'peoples car' ---easy to repair, technically formidable, yet cheap on fuel consumption, comfortable and affordable to the avarage Karl and Otto. ---That does not make him an engineer. Merley the possessor and articulator of a particular vision. And that is what fellows get elected for, to effect a vision. The problem as I see it is the near 100% failure rate of politicians! Now take a look at the following exchange between Fuhrer Adolf and Herr Dr. Schaft. ---I was going to post it in the relevant thread, but that later! www.fourhourday.org/content/docs/Hjalmar%20Schacht.pdfThese days of natural rates of unemployment some of them as high as 12% in the dollar zone and 25% in the Eurozone, there are no certified economists who can think of a ZERO RATE OF UNEMPLOYMENT. wELL, what brains type do you think Schaft had: He just looked at the Fuhrer and said: There is stuff I know and will put to use, and within no time, you will have every able-bodied german at work. Basta! Mank! the day I read the memoirs of Herr Schaft, and found out he is not compulsory reading [in the sense of reading as used at Oxford] in every economic faculty of the world, I started to develop a kind of contempt for those carriculum. Looking at 50 years of post-colonial African economic nightmare, I understand the elements folks like Kibaki, Kiano, Ouko Robert, Tom Mboya, missed in their diets! ---The loose nut in their heads why their policies stalled! kaput! Does it not amaze you Mank, even pre-occupy you a moment, that a man of Kibaki's brilliance can spend all his working life in government, and retire leaving Kenya with a power generation capacity of hardly 7,000 KW, while Spain has equivalent population generates an excess of 500 billion KW? Clever but feeble in mentality. That is what I think.
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Post by OtishOtish on Aug 4, 2013 2:42:10 GMT 3
Jakaswanga:
I have no problems with the general idea of "vision" but within reason. My boss is my boss, but he also knows that he hired me because I know one or two things.
Back to Kenya: what do you think of the vision of laptops and milk for all?
By the way, as you set off this Saturday evening to enjoy Mama Mbogas's hospitality and that of her zaftig helpers, I note that, RE the Fuhrer, (a) the definition of "unproductive humans" was later extended to include "habitual drunkards" and (b) that of "unnatural sex" was extended to include any kind of ding-dong that would not help promote the realm by way of producing proper volk---"any sexual intercourse between members of the opposite sex purely for the physical gratification of one of the parties" [So said the court. Naturally, this had no economic or racial value, even if carried out by proper Germans.]
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Post by OtishOtish on Aug 4, 2013 3:15:44 GMT 3
Mank, I was only providing a positive rather than a normative analysis of the situation. You seems to have rubbished the printing press option when we all know that is the most likely scenario for Jubilee to wiggle out of this quagmire. The only other alternatives are to f** the beneficiaries of government largesse or f** its debtors (otherwise known as a default/bankruptcy). On a side note, there are ways to deal printing press, as inflation expectation became elevated, the CBK may raise interest rates to mop up the any excess liquidity. Another side note, is there a Credit Default Swap market for our Treasury Bills and Treasury Bonds. If there was one, I bet the prices of those CDSes have hardly budged. The moral of the story here is that politics trumps economics. The administration will deal with political imperatives before economic ones. If this was your main point, then I would partially agree with you. I disagree with the "politics trumps economics"; that doesn't always work unless it's a country of "goats", and Kenya, going by its history, could well be one. I agree to the extent that if it comes to the worst, then I too believe that the DDD will resort to the printing press, and Kenyans should wake up and see the light of day. But for how long would the printing press run? Uhuru appears to be fond of "recreational substances" and his other "personal problems" are being handled in Europe, but, contrary to popular belief, he is not entirely stupid. Would he go for a scheme that he knew would be short-lived? Ruto on the other hand is a Good Christian---no recreational substances, no "unnatural" ding-dong, and he is even a better long-range planner. Look at his history: he tried his hands at selling groundnuts by the roadside, then university and a bit of teaching, finally (from 1992) a very lucrative career in violence around elections. (Until now.) He will agree to the printing press as long as he can later say that "The Devil Uhuru made me do it!" (See The Story of the Hustler's Scuttle Jet.) Hard to know which way it would go, but I think Ruto is the man to watch. In fact, I already wonder if Uhuru is already no more than just president in name.
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Post by mank on Aug 4, 2013 5:22:50 GMT 3
Mank, I was only providing a positive rather than a normative analysis of the situation. You seems to have rubbished the printing press option when we all know that is the most likely scenario for Jubilee to wiggle out of this quagmire. The only other alternatives are to f** the beneficiaries of government largesse or f** its debtors (otherwise known as a default/bankruptcy). On a side note, there are ways to deal printing press, as inflation expectation became elevated, the CBK may raise interest rates to mop up the any excess liquidity. Another side note, is there a Credit Default Swap market for our Treasury Bills and Treasury Bonds. If there was one, I bet the prices of those CDSes have hardly budged. The moral of the story here is that politics trumps economics. The administration will deal with political imperatives before economic ones. If this was your main point, then I would partially agree with you. I disagree with the "politics trumps economics"; that doesn't always work unless it's a country of "goats", and Kenya, going by its history, could well be one. I agree to the extent that if it comes to the worst, then I too believe that the DDD will resort to the printing press, and Kenyans should wake up and see the light of day. But for how long would the printing press run? Uhuru appears to be fond of "recreational substances" and his other "personal problems" are being handled in Europe, but, contrary to popular belief, he is not entirely stupid. Would he go for a scheme that he knew would be short-lived? Ruto on the other hand is a Good Christian---no recreational substances, no "unnatural" ding-dong, and he is even a better long-range planner. Look at his history: he tried his hands at selling groundnuts by the roadside, then university and a bit of teaching, finally (from 1992) a very lucrative career in violence around elections. (Until now.) He will agree to the printing press as long as he can later say that "The Devil Uhuru made me do it!" (See The Story of the Hustler's Scuttle Jet.) Hard to know which way it would go, but I think Ruto is the man to watch. In fact, I already wonder if Uhuru is already no more than just president in name. OtishOtish, Why do I find it difficult to afford Fimbo the benefit of the doubt on this? You see, the reason the title of this thread is a question whether a Country like Kenya can go Bankrupt is essentially because of a concern with the extravagant government. So it is not the question whether Ouru might result in printing paper ... it is whether whatever the good government results to (most likely printing paper and robbing individuals and business at the bank) might lead your first country to bankruptcy. It is to that concern that Fimbo gave us this assurance: A country cannot go broke when it borrows on its own currency. The government can just print paper to pay off its debtors, employees, whatever Fimbo, How would the country be able to continue borrowing in its own currency? Where would the money be coming from? ....Where would the money be coming from? DelaRue I am glad that Fimbo has changed his view, as he seems to. But I would rather he came clean and withdrew that first statement. Otherwise it is difficult to reconcile that first pitch with his latest and the title of the thread.
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Post by OtishOtish on Aug 4, 2013 6:10:41 GMT 3
Friend Mank:
An old saying: "Never kick a man when he's down".
"Objectively" that's very poor advice. As a matter of fact that one can readily confirm, the very best time to kick a man (preferably in the head) is when he's down, for the very simple reason that he is hardly in a position to give a substantive response. But here on Jukwaa we are all ladies and gentlemen, and so we exercise appropriate restraint.
So then, can we go back to your opening statements on this thread? These are issues that have to be dealt with. A fimbo is good for a caning or for sticking up ... can't remember what I wanted to write there.
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Post by mank on Aug 4, 2013 6:22:12 GMT 3
Friend Mank: An old saying: "Never kick a man when he's down". "Objectively" that's very poor advice. As a matter of fact that one can readily confirm, the very best time to kick a man (preferably in the head) is when he's down, for the very simple reason that he is hardly in a position to give a substantive response. But here on Jukwaa we are all ladies and gentlemen, and so we exercise appropriate restraint. So then, can we go back to your opening statements on this thread? These are issues that have to be dealt with. A fimbo is good for a caning or for sticking up ... can't remember what I wanted to write there. Oooh buddy! I couldn't agree more. Incidentally I am watching boxing as I read this, so I will pretend you are commenting about the dud of my color that just got hit in the head ... and down! I hope Fimbo knows, this is just defense of the G-science. Remember G for good ... not D ... oops ... I thought you said a man doesn't hit another when the latter is down. Brother got another whacking ... well, he was standing, staggering. Why can't you remember what you intended to write? Are you on Jakaswanga's liquids too? You talk history like him ... Holy hell, things change quick. Since I started telling you about the bout I am watching, let me finish it. Brother came back giving the light colored dude such blows in the globes, the light colored guy is now spraying blood through his eyes. Ref is stopping this thing. It won't be a technical, because bro had been whacked enough himself. Its a tie! Oh, where were we? Well, its where you couldn't remember what you were going to say.
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Post by mank on Aug 4, 2013 6:47:29 GMT 3
Does it not amaze you Mank, even pre-occupy you a moment, that a man of Kibaki's brilliance can spend all his working life in government, and retire leaving Kenya with a power generation capacity of hardly 7,000 KW, while Spain has equivalent population generates an excess of 500 billion KW? Clever but feeble in mentality. That is what I think. I gave up on General K long time ago ... I think 1992, to be precise. It was with mixed emotions, therefore, that I received the news that he had replaced baba M oh 1. Fortunately my expectations were too low by then. There is always a payback to too low expectations. You got me interest in that German history, but you also lost me. I don't know what that study of yours is meant for ... actually I developed a mechanism to block my ears way back in Std 6, and I had a great history teacher. But I always wondered, "so you say Vasco Da Gama reached East cost 1497 (or whenever that was ... which I remember was the only question I knew for fact I got correct in CPE ) ... so what if he did? Does history ever draw lessons for the future? Sorry ... if we can, lets stay with Country's and their potential for bankruptcy.
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