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***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***

 
Anonymous Coward
User ID: 987404
Norway
06/23/2010 08:55 AM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
The current arrangement is certainly not going to work, imo. So, we must change approach. There are different ways to handle this problem. Since we are so far into it already, very radical measures are necessary. Even something that otherwise would be inconceivable.

---

German banks hold too much PIIGS debt. But Germany has a lot of outstanding debt of its own.

It might be possible to offset these against each other.

---- <snip> ---
 Quoting: Anonymous Coward 1011830


Bankers would never allow that to happen. Look what happens all over the world. Some bank get bailed out with the money, and the debt stays.
USA could have payed off ALL private household debt in the country with the money they sent into AIG and banks.. And guess what, the debt didn't go down at all.
Goverment money = taxpayers money, so.. If goverment had bought all the debt from failed banks, the taxpayers would be without debt, right?..
Wrong!, they just sent all the the money to the banks, and taxpayers got original debt + the bailout debt in return.

Once regular Joe figures this out there will be riots.
Anonymous Coward
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United States
06/23/2010 08:56 AM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
The Super EURO is Coming - Germany and France examine 'two-tier' euro

Thread: The Super EURO is Coming - Germany and France examine 'two-tier' euro
Anonymous Coward
User ID: 1012738
Germany
06/23/2010 09:05 AM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
The current arrangement is certainly not going to work, imo. So, we must change approach. There are different ways to handle this problem. Since we are so far into it already, very radical measures are necessary. Even something that otherwise would be inconceivable.

---

German banks hold too much PIIGS debt. But Germany has a lot of outstanding debt of its own.

It might be possible to offset these against each other.

---- <snip> ---


Bankers would never allow that to happen. Look what happens all over the world. Some bank get bailed out with the money, and the debt stays.
USA could have payed off ALL private household debt in the country with the money they sent into AIG and banks.. And guess what, the debt didn't go down at all.
Goverment money = taxpayers money, so.. If goverment had bought all the debt from failed banks, the taxpayers would be without debt, right?..
Wrong!, they just sent all the the money to the banks, and taxpayers got original debt + the bailout debt in return.

Once regular Joe figures this out there will be riots.
 Quoting: Anonymous Coward 987404


The point there was not presented very clearly. But the underlying idea was to look for ways to turn international debts into domestic debts.

Not to make the debt disappear. Rather, to turn international debt into domestic debt.

It would contravene all standing rules but the mess that´s coming will make all current rules irrelevant anyway.

As presented, the idea is just a rough sketch. I don´t even know if it could work. But it might be worth considering if it could lead to something useful.
Anonymous Coward
User ID: 925148
Switzerland
06/23/2010 09:45 AM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
Hi all.

My take for now.

It Looks like the next Date for a Change to dm2 will Be July 12th. From what i Read in the last days.

Its hard for me to Imagine Germany would do it with a haircut right at the curr Change except a real catastrophe happens First maybe they wait for One and that Will Not take much time either im afraid.

If dm2 must Be initiated before a Cat Might Be all 1:1. Then the Inflation Starts to get rid of the debt. That would Be the Way with the laest chaos.

I'm also sure they will never devalue your personal debt only debt of banks and of course gov.

We'll see how it plays out. I still wish nothing at all would change bec any change will involve much suffering but they never listen to my suggestions.

Much Love

the Swiss friend
2010

User ID: 1012309
Germany
06/23/2010 09:52 AM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
come on 131 pages on that silly rumor? What happened to the AMERO?
Anonymous Coward
User ID: 1012738
Germany
06/23/2010 10:14 AM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
Hi all.

My take for now.

It Looks like the next Date for a Change to dm2 will Be July 12th. From what i Read in the last days.

Its hard for me to Imagine Germany would do it with a haircut right at the curr Change except a real catastrophe happens First maybe they wait for One and that Will Not take much time either im afraid.

If dm2 must Be initiated before a Cat Might Be all 1:1. Then the Inflation Starts to get rid of the debt. That would Be the Way with the laest chaos.

I'm also sure they will never devalue your personal debt only debt of banks and of course gov.

We'll see how it plays out. I still wish nothing at all would change bec any change will involve much suffering but they never listen to my suggestions.

Much Love

the Swiss friend
 Quoting: Anonymous Coward 925148



I agree that it would be 1:1.

On the inflation part, instead, I am skeptical. Germany does not want inflation.

If it wanted inflation, it would just stay with the euro, which will depreciate and will suffer inflation. There would be no problem and there would be no need for a DM2.

Instead, if the DM appreciates, as is most likely to happen, Germany could just leave its public debt in euros. Germany would just see its public debt shrink in value--before even starting to pay for it!

As the debt shrinks, more money would come into Germany seeking a safe haven. So banks would be able to recapitalize quickly, just because funds would be coming in! Even without government help.

Look at the US under Reagan: the fiscal and debt situation was a catastrophe already. Reagan gave tax cuts and sustained deficits. BUT the dollar and the US economy were kept afloat nevertheless because of enormous inflows of capital into the US!

This time Germany could pull it off too.

If it uses this opportunity responsibly to reduce debt and to create the conditions to remain competitive in the future, the outlook for Germany would actually become quite good!

Nothing comparable could be achieved in the rest of euroland.
Nostradamos
User ID: 1012877
Germany
06/23/2010 11:38 AM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
The Deutsch Bundesbank will not let inflation take high ranges in Germany.

That will make the new DM an uber hard currency. A diamant in a world of marshmallows ( sorry Mr Marshmellow :-) )

There will be an massive capital inflow wich makes the new DM more hard, maybe germany will be like an black hole in the financial world, sucking all money in.

And from that point, what do you think Heli Ben and Timmy will try on the G20 meeting ? They stand with their backs to the wall and the german Tank Angela is rolling...
Anonymous Coward
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Germany
06/23/2010 11:48 AM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
Nostradamos

Yes, I think so too.

I think this is the best solution both for Germany and for everyone else.
Anonymous Coward
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06/23/2010 01:05 PM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
On the fall of the euro: If/when Italy gets in trouble, then it´s finished. See article from the Financial Times:

"Turmoil in Spain sparks fear of crisis spreading"

Google the title to access the text without subscription.
Anyway, the link is this:

[link to www.ft.com]
Nostradamos
User ID: 1012877
Germany
06/23/2010 01:52 PM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
True.

Opera ends when the fat Lady ( Italy ) has finished singing.

Then the curton ( Euro ) comes down.
MrsCK
User ID: 972213
United States
06/23/2010 02:49 PM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
Soros: if Germany maintains current policies, Germany´s exit from the euro would be beneficial

[link to abcnews.go.com]
 Quoting: Anonymous Coward 1012636



Here is Soro's speech....and talk about throwing germany under the dang bus!!!!!!!!!!!!!!

[link to www.georgesoros.com]
Anonymous Coward
User ID: 1013252
Germany
06/23/2010 03:59 PM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
True.

Opera ends when the fat Lady ( Italy ) has finished singing.

Then the curton ( Euro ) comes down.
 Quoting: Nostradamos 1012877



Maybe Spain will be big enough a problem that we will not even have to wait for Italy.

Kicking them out of the euro, at this point, would be a death sentence and would throw the whole continent into social unrest. The reason is that now no one would want the Italian lira or the Spanish peseta. This is what would probably happen: Interest rates would soar, banks would fail, the economy would just stop...

It would be better for the weaker countries to hold on to the euro together and for Germany and a few other to leave.

This would not kill the European project. The UK is in the EU but doesn´t have the euro. It makes no difference.

Weaker countries need to reform and Germany could rejoin in the future. This would help ensure that demand for the weak countries´ currency does not dry up.
Anonymous Coward
User ID: 1013252
Germany
06/23/2010 09:30 PM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
Soros: if Germany maintains current policies, Germany´s exit from the euro would be beneficial

[link to abcnews.go.com]



Here is Soro's speech....and talk about throwing germany under the dang bus!!!!!!!!!!!!!!

[link to www.georgesoros.com]
 Quoting: MrsCK 972213


Yep, his plan would send us all (not just Germany) to economic ruin.

There is no chance Italy, Spain or Greece can become competitive quickly. A major devaluation would only be the beginning.

Germany would simply not be able to pay for all of that and it would be ravaged by inflation.

We´d get competitive devaluations between the US, Europe and China. It´s a very bad idea.

It´s much easier to manage the problems that would ensue in case of a return to the DM.

---

Anyway, mainstream media reported that he was suggesting that Germany should leave the euro. That is not at all what the speech says!
MrsCK
User ID: 972213
United States
06/24/2010 06:35 AM
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---

Anyway, mainstream media reported that he was suggesting that Germany should leave the euro. That is not at all what the speech says!
 Quoting: Anonymous Coward 1013252



That how I saw it too!!! the media says one thing...but when you read what Soro "really" is not the same. Don't we just love media that don't know shit or gets the facts right!!
Anonymous Coward
User ID: 1014327
Germany
06/24/2010 01:38 PM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
---

Anyway, mainstream media reported that he was suggesting that Germany should leave the euro. That is not at all what the speech says!



That how I saw it too!!! the media says one thing...but when you read what Soro "really" is not the same. Don't we just love media that don't know shit or gets the facts right!!

 Quoting: MrsCK 972213



Exactly.
Soros´ argument was kind of mixed, though.

In the end, it should be clear that Germany will not bend, so...
Anonymous Coward
User ID: 974458
Russian Federation
06/24/2010 06:44 PM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***


Dorogoi russkii drug :)

I had to get my mind around Marxist economics, a subject new to me--and altogether rather different from Capitalist economics. It took me a while and I still am far from confident I understand the details.

But the exercise is enlightening nonetheless, because it highlights how the same issues can be examined from different perspectives and interpreted in very different ways.

Both systems appear to have some drawbacks but, in my opinion, we end up with the worst system when we mix the two... :)

In the example of the obsolete typewriter factory, for example, the effort put into building the factory falls under the category of value in Marxist economics (correct me if I am wrong). But in the Capitalist system it´s simply a cost--and, being money already spent, it is a sunk cost. That is: it´s irrelevant to future decisions. Only the consequences of what is to be decided are taken into account.

In the other examples, such as research laboratories ro railroads, actually they do have value even in the Capitalist system. Even churches and monuments can have value. The churches are a good example. The Vatican or a diocesis builds a church in the same way McDonald´s builds a restaurant. It´s their business. People go, listen to the mass, buy the candle, leave an offer: money comes in. People donate money because it makes them feel good. For the city, beautiful churches attract tourists... tourists go to see them because it makes them feel good (the same way they go to movies, for example...) So, there is an economic value.

You correctly point out that a result is that people can lose their job in the process of innovation and competition. Capitalism is far from perfect but it does take this aspect into account. In fact, the idea is of an economy that is dynamic and continuously renovating itself.

The problem of people losing their jobs is addressed by creating new jobs! The objective is to spend as few of society´s resources on a single task as possible--so that those resources can be immediately readdressed to produce something else.

Admittedly, the theory is imperfect and a bit extremist. People cannot always readapt so quickly and some people do fall through the craks in the system. So, there must be a social safety net. But it has to save those who fall, not encourage people to do nothing. And it is also necessary for the government to create the tool that allow people to develop their potential.

Governments are actually doing a very poor job. One reason is that politicians need to get reelected. Giving out wins more votes. Since they can borrow and indebt the country as they please, it is easier to do so.

Also, it is complicated to make the country efficient and competitive and competence and also consensus on what to do are hard to achieve. So, in the West, we end up making a huge mess of Capitalism, Socialism, Irresponsibility and a touch of Madness. We end up with a Capitalism that is too Socialist and a Socialism that is too Capitalistic. And by the time we figure it out, we are already deep in debt!

China still has a lot to do, but it has developed so rapidly by balancing Capitalism, Socialism and Dirigism in an effective way. I don´t think they could have done much more much quicker. So, the mix can work if there is a plan--and people who know what they are doing.

When you say: look, China is going to rule the world, I agree. But I don´t mind at all. They are doing things smarter than us and that is a positive thing. The fact that hundreds of millions of people are rising out of poverty thanks to their work is a good thing. Tomorrow, they will also be a market for our products, if we start managing our economies and societies more sensibly.

By the way, I am thinking of moving to Asia because there are better opportunities there and it would also be interesting.

I just finished reading a book on investments and there was mention of the privatizations in Russia. It said that part of the companies´ stock were given out to workers and part to ordinary citizens, in the form of vouchers, just as you said. These stocks and vouchers were given out at a fraction of their real worth. So, basically, the state gave out real value to people: they bought at a nominal price shares in companies that were actually sitting on very valuable assets.

The privatization of apartments followed a similar path, it was said.

I think it was not the most efficient way to procede. But they were given out from the Russian State to the Russian people.

In the case of Browder, I really have no reason to take sides with him at all. Only, the passages that I perceive are these (again, correct me if I am wrong):

Russian State gives to Russian citizens
Russian citizens SELL to Browder/Hermitage
Some people illegally expropriated from Browder/Hermitage

In the end:

Browder/Hermitage has paid for what it got. Those who really benefit are the few who illegally expropriated Browder/Hermitage. There is no benefit to the Russian State, nor the Russian citizens.

An expropriation could theoretically be done and even be justifiable if, as you point out, the initial giveaway was wrong, by reversing the transactions.

There would be many other ways for the State to recover what it should not have given out. But it could do so legally.

This way, some benefited without being entitled. The State and citizens suffer a double loss. First when the assets were given out at a low price. And then because incidents like this make it more difficult to develop new value in the future. In my view, this is not at all in Russia´s best interest.

On Italy and Russia: I think the probabilities are much more in favor of Russia. :) People are always more optimistic about what they know less, so this may explain our different expectations.

In the past, I had mentioned cooperation of Russian aircraft manufacturers with Western counterparts. I have read/heard that cooperation on this is actually happening already, I believe with Airbus. (I would trust Tupolev more than Airbus... but that´s just me! :) )

Regards


My dear italian friend!

The part where you are talking about economics makes me sad, very sad. It looks like you are reciting a colledge textbook, that I have read well enough. So let me try once again to break you out of the common thinking.

The notion of value that you are backing is a well-known approach, one of the practical methods of calculating such a valiue is the discounted cash flow method. This concept of value, as any other one, is rather subjective. As you mentioned, it is not constant, it can suddenly change. You mentioned that it is differnt from a price. A price is something that balances the demand and the supply, so it is very dependent on the cirumstances of the deal. A value in the way you define it accounts for the future price of your product or whatever you can do with the asset to make money woth it, and the risks. In this way, a present-day value of an asset depends on ypur _expectations_ of the risks, on your business plan, on your expectations about a great number of factors. If you think about it, you will understand that a value is even a much more subjective thing that a price it does not only depend on the current cicrumstances, but on the expectations regarding future circumstances. So if you are absolutely unaware about anything and have no expectations (like you don't know if dollar would collapse tomorrow or if there would be a civil war in ypur country), a value of anything falls close to zero. You mentioned that the past costs don't affect future decisions. Yes, it's a right strategy if _your goal is making money_. This concept of value is practical for businessmen or investors. This concept of values is a tool in a toolkit of a businessman, it can be used for decision making by a businessman. But it is not universal. You tried to tell me that that churches earn money like McDonalds does, but they actually don't, they are often subsidised. Similarly fundamental science is also subsidised by a state. It has _some_ value, but because of risks and uncertainty it would be a bad business and nobody would invest. Churches would also be a bad business. The value of such assets can't be measured with the concept of value related to discount cash flows. Every individual does loys of irrational things, owns lots of things for purely sentimental reasons, or just because of an affection, or for many other reasons other than making profit. You can't use the concept of making profit to measure everything, and it's a mistake that some theorists try to. A state is also not a corporation, it's goal is not making profits, but maintaing a decent living standard for the society over a long timeframe. This means that the state must not use the discounted cash flow to measure the value of national assetes; lots of things like cultural heritage or fundamental science or defense must be maintained despite the fact that those spendings don't give an immediate or predictable effect in terms of growing wealth. The Marxist notion of value is a concept better suited for taking political decisions. A cost of anything is combined of the cost of the components, of the labor used to produce it, and the profit. This can be repeated with the components, untill you get to the raw materials and the rent taken by their owers. So basicaly the cost of anything is ultimately a coombination of labor costs plus profits and rent made by people who didn't invest their labor. If you look from the point of view of the state, especially an isolated self-contained state, or the mankind alltogether, you will see that only as much goods can be produced as there're labor available over some period of time, and the more profit is made (eg as more people participate in the consuption of the goods without investing their labor), the less efficient use of labor is taking place. That's why the invested labor is a proper concept of value for political decisions. In fact, if an economy is going to hell, some people make crazy profits, but it means inefficiency. Even the usual capitalist ecomominc science admits that profits are made on unbalanced markets (and in theory must balance the markets - except for numerous cases that are treated as exceptions by economics theorists), and balanced markets are better for an average man. So if there're are huge imbalances in an economy and lots of profit is made, for individual businessmen the capitalist value of their assets is changing and perhaps rising, but the Marxist value of the assets in the economy isn't changing - it reflects the fact that nothing new is actually created. Marxist value is about connecting the labor people with the product of their labor. In a closed economy, or worldwide, you can't make value out of nothing, you have to spend some labor, and if you get more than the economic effect of your labot, than soomebody is getting less than the economic effect of his labor, and it means imbalances and inefficiency. In course of progress, the preaviously created assets are used, that is the labor is accumulated, the wealfare grows. A company is not a closed system; you can buy low and sell high without sacrificing anything, so you can expect your assets to grow in price more than you spend on them, and you can call your expectations "value", because the only valuable thing is benefitting from the imbalances. If tou take the society as whole, imblances are always bad because they make the system less efficient than it could be, so if anybody is enjoying the rise of "value" of his asstes, some other pary suffers losses, and as as the result of all that the whole system is working worse than it could, so those changes of "value" are meaningless. That's why the labor-based concept works better in this case. If the society prefers to build typewriter factories (no matter for waht reason), those who spent their labor for that consumed other goods, so no matter how smart was the decision to build such a plant and make typewriters, it's a part of the society and its economy, that's why it has value for the society. If it didnt't have one, it wouldn't be there. Making decisions on what to build and what not to build are made on a different level.

Shortly about the rest of what you said.. You say they SOLD their shares, and Browder BOUGHT them, and it was legal, as if ypou mean that if something was commited and it was legal than it is OK, and if something is not legal, ot is not OK. I often see Europeans follow the same logic. Maybe it's a cultural difference. Here in Russia there's such a concept as a FAIR deal. Something might be legal, but not fair, or legal but unfair. The laws themselves are constantly changing, something that was strictly prohibited and severly punished 15 years ago is widely accepted and encouraged now, and vice-versa. We in Russia don't respect unfair deals. For example, if Sarcozy fooled Putin into signing a document that was interpreted the way that Russia had to withdraw the army from Ossetia, it doesn't actually mean that Putin would think "oh, damn, I had to think better, but if I signed it, I must follow it". Nobody in Russia thinks that way. If a Russian didn't expect a contarct to work against him, he will never follow it. And the country as a whole won't. It's the way we think. Just remeber it and stop trying to fool us. The deal of acquiring the shares from the people was unfair; the circumstances were unjust, there were legal gaps, there was pressure, and people lacked information after all. It was unfair, and it will not be respected. People themselves don't respect the outcome of those deals, why do you want the government to respect it? If the govermnent says "well, you suffered losses, but you SIGNED it, you stupid morons", the people won't think "well, yes, we signed that, we must be more careful"; they will take the axes and pitchforks ang go crush and kill. Because we Russians never respect unfair deals.

As for the fact that everything could be reverted in a legal way, I agree with you that it would be much better and it is what I personally want. But it happened the way it happened; laws are not respected here, not at all.

As for China story, I am afraid of them. You don't know them at all, and you expect them to keep up with the values that ypu beleve are universal "human values", but those values are an artifact of the late Euriopean culture. Chinese are different; if they don't need you, they will let you starve to death. The world where Chenese are ruling will be very harsh. Histroically, they typically killed the whole nations on territitories they occupied. Their philosophy is Chinese-centric, and even the word for a "foreigner" is translated as "a man from the outlying districts of the empire".
Anonymous Coward
User ID: 1015363
Germany
06/25/2010 12:18 PM
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Re: ***BREAKING NEWS** The new Deutsche Mark banknotes are here**Picture will follow tomorrow***
My dear italian friend!

The part where you are talking about economics makes me sad, very sad. It looks like you are reciting a colledge textbook, that I have read well enough. So let me try once again to break you out of the common thinking.

The notion of value that you are backing is a well-known approach, one of the practical methods of calculating such a valiue is the discounted cash flow method. This concept of value, as any other one, is rather subjective. As you mentioned, it is not constant, it can suddenly change. You mentioned that it is differnt from a price. A price is something that balances the demand and the supply, so it is very dependent on the cirumstances of the deal. A value in the way you define it accounts for the future price of your product or whatever you can do with the asset to make money woth it, and the risks. In this way, a present-day value of an asset depends on ypur _expectations_ of the risks, on your business plan, on your expectations about a great number of factors. If you think about it, you will understand that a value is even a much more subjective thing that a price it does not only depend on the current cicrumstances, but on the expectations regarding future circumstances. So if you are absolutely unaware about anything and have no expectations (like you don't know if dollar would collapse tomorrow or if there would be a civil war in ypur country), a value of anything falls close to zero. You mentioned that the past costs don't affect future decisions. Yes, it's a right strategy if _your goal is making money_. This concept of value is practical for businessmen or investors. This concept of values is a tool in a toolkit of a businessman, it can be used for decision making by a businessman. But it is not universal. You tried to tell me that that churches earn money like McDonalds does, but they actually don't, they are often subsidised. Similarly fundamental science is also subsidised by a state. It has _some_ value, but because of risks and uncertainty it would be a bad business and nobody would invest. Churches would also be a bad business. The value of such assets can't be measured with the concept of value related to discount cash flows. Every individual does loys of irrational things, owns lots of things for purely sentimental reasons, or just because of an affection, or for many other reasons other than making profit. You can't use the concept of making profit to measure everything, and it's a mistake that some theorists try to. A state is also not a corporation, it's goal is not making profits, but maintaing a decent living standard for the society over a long timeframe. This means that the state must not use the discounted cash flow to measure the value of national assetes; lots of things like cultural heritage or fundamental science or defense must be maintained despite the fact that those spendings don't give an immediate or predictable effect in terms of growing wealth. The Marxist notion of value is a concept better suited for taking political decisions. A cost of anything is combined of the cost of the components, of the labor used to produce it, and the profit. This can be repeated with the components, untill you get to the raw materials and the rent taken by their owers. So basicaly the cost of anything is ultimately a coombination of labor costs plus profits and rent made by people who didn't invest their labor. If you look from the point of view of the state, especially an isolated self-contained state, or the mankind alltogether, you will see that only as much goods can be produced as there're labor available over some period of time, and the more profit is made (eg as more people participate in the consuption of the goods without investing their labor), the less efficient use of labor is taking place. That's why the invested labor is a proper concept of value for political decisions. In fact, if an economy is going to hell, some people make crazy profits, but it means inefficiency. Even the usual capitalist ecomominc science admits that profits are made on unbalanced markets (and in theory must balance the markets - except for numerous cases that are treated as exceptions by economics theorists), and balanced markets are better for an average man. So if there're are huge imbalances in an economy and lots of profit is made, for individual businessmen the capitalist value of their assets is changing and perhaps rising, but the Marxist value of the assets in the economy isn't changing - it reflects the fact that nothing new is actually created. Marxist value is about connecting the labor people with the product of their labor. In a closed economy, or worldwide, you can't make value out of nothing, you have to spend some labor, and if you get more than the economic effect of your labot, than soomebody is getting less than the economic effect of his labor, and it means imbalances and inefficiency. In course of progress, the preaviously created assets are used, that is the labor is accumulated, the wealfare grows. A company is not a closed system; you can buy low and sell high without sacrificing anything, so you can expect your assets to grow in price more than you spend on them, and you can call your expectations "value", because the only valuable thing is benefitting from the imbalances. If tou take the society as whole, imblances are always bad because they make the system less efficient than it could be, so if anybody is enjoying the rise of "value" of his asstes, some other pary suffers losses, and as as the result of all that the whole system is working worse than it could, so those changes of "value" are meaningless. That's why the labor-based concept works better in this case. If the society prefers to build typewriter factories (no matter for waht reason), those who spent their labor for that consumed other goods, so no matter how smart was the decision to build such a plant and make typewriters, it's a part of the society and its economy, that's why it has value for the society. If it didnt't have one, it wouldn't be there. Making decisions on what to build and what not to build are made on a different level.

Shortly about the rest of what you said.. You say they SOLD their shares, and Browder BOUGHT them, and it was legal, as if ypou mean that if something was commited and it was legal than it is OK, and if something is not legal, ot is not OK. I often see Europeans follow the same logic. Maybe it's a cultural difference. Here in Russia there's such a concept as a FAIR deal. Something might be legal, but not fair, or legal but unfair. The laws themselves are constantly changing, something that was strictly prohibited and severly punished 15 years ago is widely accepted and encouraged now, and vice-versa. We in Russia don't respect unfair deals. For example, if Sarcozy fooled Putin into signing a document that was interpreted the way that Russia had to withdraw the army from Ossetia, it doesn't actually mean that Putin would think "oh, damn, I had to think better, but if I signed it, I must follow it". Nobody in Russia thinks that way. If a Russian didn't expect a contarct to work against him, he will never follow it. And the country as a whole won't. It's the way we think. Just remeber it and stop trying to fool us. The deal of acquiring the shares from the people was unfair; the circumstances were unjust, there were legal gaps, there was pressure, and people lacked information after all. It was unfair, and it will not be respected. People themselves don't respect the outcome of those deals, why do you want the government to respect it? If the govermnent says "well, you suffered losses, but you SIGNED it, you stupid morons", the people won't think "well, yes, we signed that, we must be more careful"; they will take the axes and pitchforks ang go crush and kill. Because we Russians never respect unfair deals.

As for the fact that everything could be reverted in a legal way, I agree with you that it would be much better and it is what I personally want. But it happened the way it happened; laws are not respected here, not at all.

As for China story, I am afraid of them. You don't know them at all, and you expect them to keep up with the values that ypu beleve are universal "human values", but those values are an artifact of the late Euriopean culture. Chinese are different; if they don't need you, they will let you starve to death. The world where Chenese are ruling will be very harsh. Histroically, they typically killed the whole nations on territitories they occupied. Their philosophy is Chinese-centric, and even the word for a "foreigner" is translated as "a man from the outlying districts of the empire".
 Quoting: Anonymous Coward 974458



Dear Russian Friend :)

Marxist economics is indeed a bit different from Capitalist economics and there always are some cultural differences that lead to different perspectives and expectations. I can see examples of that even within Italy.

Being aware of such difference makes it easier to communicate.

Yes, the idea of value as an expectation of future benefit is one way to look at it. You are also correct pointing out that in this context there is no "objective" value and that the estimate is, thus, both subjective and constantly changing.

The world, however, is constantly changing and one can speculate about the future (in terms of probability, for example) but one does not know the future. Indeed, even the present cannot be entirely known: each has his own perspective and sees only a part of what is going on, interprets that part and draws inferences. So, reality constantly changes and, as it manifests itself, also changes expectations--and the expected value of things.

What I find puzzling from the Marxist approach (at least, insofar as I have gleaned here), is the requirement that the world is fixed. That assumption then does allow for a valuation of assets in terms of their realization cost. But change and progress will constantly create a contradiction, no? If the expectations change, there will be a discrepancy between the value in terms of costs and the value in terms of expecations.

In the Capitalist model (which is far from perfect), at least change is assumed. Constant disruption is part of the model. This problem is dealt with by promoting constant reallocation of resources.

I don´t quite see how growth is tied to incremental input of labor. Many things formerly done by hand were then done automatically. Think of milling: a water or wind mill substituted a lot of human labor. Yet, the world progressed and people started doing something else. Reducing labor in an essential job actually improved living standards. I think the mechanism can be replicated.

In the example of the typewriters, you point out that people may want to build typewriters and that´s their choice. Yes, of course. But I don´t see why I have to buy it, if I want to use a computer. If everyone wants to use computers and no one wants typewriters, then I see it as inefficient to continue devoting resources to keep producing them. I don´t know how the Marxist model handels this. In the Capitalist model, people have an incentive to innovate and make things in a better way (that is more desirable for the users, cheaper, and so on). Those who are inefficient lose out in that field, yes. But there are open opportunities elsewhere because change is expected and opportunities are open.

Honestly, I would not be pleased if I had to return to the typewriter and also had to mill my own grains by hand...

This does allow some people to make more profits. But the same people can also make big losses. Overall, as with the mill, it has produced an increase in society´s well-being for all.

But it is not a zero sum game, like cutting a pie: if I get a bigger portion, then you must get a smaller one. Value is created by efficiency. And wealth created in one sector creates demand for other sectors.

The crucial point in this model is that money remains a proxy for efficiency. This, in my view, is one of the weakest points. Because the whole system can be turned into a casino--as we have witnessed in financial markets. That indeed leads to people getting rich without doing anything and even compromising the system. This, I believe, is one example of the problems you indicate and I agree with you.

But that has to do a lot more with inadequate regulation or, rather, inadequate application of regulations than with the model itself.

It is true that not everything is made in terms of present value of future cash flows. People build a monument because... yeah, why do people build monuments? I am not sure :) Well, I imagine to celebrate, because it will make them feel better, or because there are political objectives. Going to the movies is another example of something done without a PV approach. People get satisfaction, relax. In this case, that´s consumption, not an investment.

The monument, then, can generate cash flows in the future. Think of the pyramids. I think it was madness to build them. But now they are a good asset for Egypt: many people go there to see them.

Churches can be a bit of all of this. But if you look at the Catholic Church and realize how much money it has amassed, you must come to the conclusion that however it happened, it was a good business indeed! They sell heaven. You pay now and they´ll deliver when you´re dead. Needless to say, no one ever came back to complain! :D

On the expectations about contracts: I think in Asia the approach is similar to the one you describe. The contract is considered more as a reference point... rather than expected to be applied by the letter. In the West the approach is more based on the letter of the law. In the Anglo-Saxon part of the West.

In Italy, formally, it´s the letter of the contract. In practice, nothing is reliable at all. People cheat all the time, the court system doesn´t work and judgement is neither timely nor predictable. The result: business collapses. They don´t like the results, but they don´t like to address the causes either.

I think it´s in the interest of society to find a way that allows people to clearly know what they can do and what they can´t do. If people make an agreement and then are allowed to not respect it, then there is an incentive to be dishonest. If dishonest people prevail, then honest people will likely suffer.

The best way would be that the letter and spirit of the law coincide.

But when a conflict arises, I think it is in our collective interest to promote honesty and responsibility.

Looking at a trade: do you remember the Korobochka? She didn´t want to sell the dead souls because if someone wanted to buy them, they must be worth a lot more! In the end, she didn´t sell and she kept something that was worthless to her.

This is a good example that there is not an absolute value. Also, there is always an asymmetry of knowledge and expectations. That´s the reality. Ben Franklin pointed out that the seller usually knows what he is selling a lot better than whoever happens to buy. Think of your own car or apartment. You know whatever broke in the past. It´s unlikely the buyer knows it as well as you do.

Another point is that the person who at the time sold the vouchers for Company A at 500 roubles, might have then used that money to buy shares in Company B at 200 roubles--and they may be worth 800 roubles now. Or he may have done something else that was more important to him or her.

I don´t quite see the mechanism by which such transaction should be taking place otherwise. What would be the fair value the? And why would people engage in a transaction where they were free to choose, if they thought that the offer wasn´t fair?

I think the problem does not happen when Browder buys or they keep. If they sold, it means they prefered to have the money. So, both parties were willing.

The problem happened when the vouchers and shares were distributed. And another problem happens if people end up being in need of selling. So, they sell not because they want but because they have no choice.

In this sense, I can see why it was not fair.

But these problems were not created by Browder. So, this is the reason I think the transactions could be put into question and possibly reverted.

The people got given the shares and vouchers. Let´s say they got a 100 roubles or a bottle of vodka in exchange. Well, in the end, they ended up with the 100 roubles or a bottle of vodka they did not own before.

I don´t know if Browder in the end lost more than he made.

But it is claiemd that the people who ended up owning the shares got them illegally. So, in the end, it´s just this group of people who benefit.

This process scares both foreigners and Russians from doing business in Russia. It is reported that many rich Russians have bank accounts in Switzerland, Cyprus and own houses in France, UK, etc. Why don´t they put their money in banks in Russia?

That money could create a lot of jobs for Russians.

How do you see this system as beneficial?

As for China, I know that what you say is true. China will definitely take over and the West will become poor.

Look at this now: first the West got them hooked on opium. Now the situation is repeating, but in reverse. We are hooked on debt. They are growing and developing while buy ssilly trinkets and think we´re rich. Actually, we´re just being dumb.

Making dumb decisions is the cause of the demise. Not China. That is: doing what we do, we´ll go broke anyway. I like rationality, prudence, thrift and efficiency. China has planned smartly and has even played in a world where the West set the rules--in its favor. (Think of the US dollar being the reserve currency, for example.) And they have beaten us at our own game!

Is there more to blame or to admire?

If we don´t like it, we should start changing our ways. Unfortunately, peeople will wake up when it will be too late. This also shows how uncritical and irrational our societies have become.

This has happened all the time throughout history. It happens again now. But the only thing we learn from history is that people don´t learn from history! :)

We´ll learn the hard way.

I´m thinking of moving to Asia...
:)

My Russian Friend, the conversation is interesting because we have different perspectives. I think reality is complex and can be seen from many different angles and perspectives. And we see everything through a "lense" of our own culture, experiences and social norms. So, I am not sad to read of a different point of view, but interested. I wonder if, when they meet at the G20, the politicians are really awaer of such misalignment of expectations... maybe they talk and talk and they come out with very unrealistic expectations :)

With best regards,

Poka!
Anonymous Coward
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06/29/2010 01:15 AM
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Hello and good bye from the Swiss Friend to all of you.
May God bless you and your family.
Protect yourself with PM and low profile in the internet.

---------------------------------------------------------

Die Startseite mit allen Grafiken und diese Seite wird noch bis ca. Ende Juli so stehen bleiben, Du kannst die Grafikseite oder die Links gerne kopieren und auf Deine eigene Festplatte speichern, dort im Internet aufrufen und als Favorit speichern, falls sie Dir dient. Zum Abspeichern einfach mit RECHTER Mausstaste auf die Links klicken und speichern unter der Ort auf der Festplatte wählen.

 Quoting: Anonymous Coward 1018421


Hello Swiss Friend,
Bitte ein link zur Startseite mit allen Grafiken...
MrsCK

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06/29/2010 07:34 AM
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SWISSSSSSSSSSSSSSSSS your back!!!!!!!!!!

Hope you had a great Holiday!


from texas
MrsCK

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07/01/2010 11:57 AM
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Swiss Friend any update? Having withdrawals here!!!! Love the info you provide!!!

If your traveling you can email me at internationallivve@yahoo.com


Thanks from Texas
MrsCK

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07/01/2010 03:50 PM
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SWISS SWINGS?
[link to www.postjudice.com]

QUOTE from Article:
In the intervening period, Swiss gold reserves bottomed out, in value terms, in 2003. In the last three years, the bank sold 160t of bullion and announced that no further sales were necessary. Yet something quite extraordinary has now happened to Switzerland’s official reserves. The reserves, which for many years hovered around the $70bn mark and then doubled since the onset of the global financial crisis in 2007, suddenly jumped a further 50% between April and May this year. Unexpectedly, Switzerland has overnight become 7th largest foreign reserve holder after the Asian and oil producing economies. This occurred due to the proactive stance of the bank’s new leadership to dampen speculative inflows into CHF. Indeed, Swiss National Bank bought more European government bonds since Brussels’ shock’n’awe strategy announcement than the European Central Bank itself. Much of this hyperactivity was apparently caused not so much to protect Swiss exports, but rather to shield Eastern European economies whose debt is largely denominated in Swiss Francs. It has been reported that as much as 60% of Hungarian mortgages are CHF-denominated. But in the process, the gold component of SNB’s expanded reserve, if left unadjusted, has now shrunken from 24% to 15% of the total.
Anonymous Coward
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07/04/2010 04:11 PM
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SECOND CURRENCY
Increasing the money supply without causing a devaluation of the euro!

If Greece introduced the drachma internally only, while maintaining the euro for external transactions, Greece could print money freely at home, without affecting the euro!

This may be an alternative solution to abandonment of the euro by Germany or by Greece or other weak countries.

What would happen if the US did the same?!

Maybe, this solution would allow the US$ to remain more credible, while finding a way to pay bills at home!
Anonymous Coward
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Russian Federation
07/05/2010 02:44 PM
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SECOND CURRENCY
Increasing the money supply without causing a devaluation of the euro!

If Greece introduced the drachma internally only, while maintaining the euro for external transactions, Greece could print money freely at home, without affecting the euro!

This may be an alternative solution to abandonment of the euro by Germany or by Greece or other weak countries.

What would happen if the US did the same?!

Maybe, this solution would allow the US$ to remain more credible, while finding a way to pay bills at home!
 Quoting: Anonymous Coward 1025232


It's a very old story. Recall Goldmark after WWI, or golden ruble.. In all cases it leads to a collapse of the internal currency. It's no benefeit for them to do so - switching to drachmas only makes sense if they pay debt in drachmas.
Anonymous Coward
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Switzerland
07/06/2010 04:03 AM
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Swiss Friend any update? Having withdrawals here!!!! Love the info you provide!!!

If your traveling you can email me at internationallivve@yahoo.com


Thanks from Texas
 Quoting: MrsCK



Dear CK, as you read in my last post, it was the last post. We entered the 2nd phase of the crisis.

For security low profiling is important (for me, anyway). I keep reading, but no output anymore.

07-11-10 will be a tipping point. I hope for you all (and us) it's not the haarp-induced explosion of the GOM, but it would fit all plans so far.

I'd rather wish its a bigtime market crash, the DM2 or Israel attacking, 'cause the tsunami might wipe out thousands and the methane will kill tenthousands.

May God help us all, the rest will be history.
Markets will turn down starting now until march 11, then, $ as we know it now, will not be anymore, neither the Euro.

God bless you all,
swiss friend
DM23
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07/06/2010 08:39 PM
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Und Alle so: Yeah!

Can someone please switch out the lights on this thread now.

Thanks.
MrsCK

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07/11/2010 11:03 AM
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Euro Crisis : Soros on the Euro’s deficiencies and what needs to be done

Quote:

He also details the dangers for Germany in leaving the Euro –

The Deutschmark would go through the roof and the euro would fall through the floor. This would indeed help the adjustment process of the other countries but Germany would find out how painful it can be to have an overvalued currency. Its trade balance would turn negative and there would be widespread unemployment. German banks would suffer severe exchange rate losses and require large injections of public funds. But the government would find it politically more acceptable to rescue German banks than Greece or Spain. And there would be other compensations: pensioners could retire to Spain and live like kings, helping Spanish real estate to recover.



[link to sluggerotoole.com]
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07/11/2010 11:08 AM
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[link to www.telegraph.co.uk]

EMU break-up risks global deflation shock that would dwarf Lehman collapse, warns ING
A full-fledged disintegration of the eurozone would trigger the worst economic crisis in modern history, devastate every country in Europe including Germany, and inflict a deflationary shock on the US. There would be no winners, warns the Dutch bank ING in a new report "Quantifying the Unthinkable".
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07/18/2010 02:01 AM
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bump
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07/18/2010 02:05 AM
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rant
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07/18/2010 02:05 AM
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smile_hear

News








We're dropping truth bombs like it's the end of days!