Thursday, November 11, 2010

Brazil's president...the only guy in the room who gets it??

Brazil's president, Luiz Inacio Lula da Silva, warned that the world would go "bankrupt" if rich countries cut back on consumption and tried to export their way to prosperity. "There would be no one to buy," he told reporters. "Everybody would like to sell."

He's apparently the only guy there who gets it.

Either that, or he wants Brazil's export boom to continue and is scaring other countries into being buyers.


Stephan said...

This G20 conference seems to me a reenactment of the London Conference in 1933.

Mike Sandifer said...

I'm sure you loved the idiotic statements Zoelick made about considering some kind of new gold standard.

mike norman said...


Zoellick is a lawyer and public policy guy. He doesn't know anything about economics (apparently). Nearly all economists agree on this one: going back to a gold standard would be a disaster.

googleheim said...

The Greeks would love a gold standard.

They are going to pass out fake Drachmas in a couple of weeks as a protest.

When the Euro gets too high, they start looking for moldy debt in Ireland or Greece just to get exports back running with a lower Euro.

When the Euro gets too low, they ( the Europeans ) come out and slug the USD as if it is under the Maastrictly bull crude agreement and neeeds to clean it's debts up.

This is the falsehood of the currency markets and what Mike NOrman points out all along ...

that's why these Schifflets pick at - not at what Mike is pointing out but they pick at his finger nails or something since they are completely myopic to the picture and what's really going on

Unknown said...

I have got some queries on this subject. can somebody answer please...?

there is offcourse someone needed to consume else who will produce and for whom?
1) so why brazil does not buy and US produces? why US only consumes while others produce.
2)and why do you think that this debt based consumption can continue for ever. Even when the lenders remain dumb as they are now, at some point of time countries like china, when they would have accumulated massive dollars would like to use it or feel less interested in it (courtsey law of diminishing utility).
3)excess of money when flows internationally as well as domestically will fuel inflation.
4)using the same logic if a consumer is necessary then the producer is necessary as well. who will produce if everybody will consume.
5)who will continue to produce (given people have a choice) if in return they get a currency which is fast losing values w.r.t commodities and which is not a good store of value.
6)overtly it looks fine that QE or printing money fuels demand which encourages production but means are as important as ends. how this demand is being sheer transfer of purchasing power from the existing money to new money. while quantitiy of money remains same, value of money reduces because more money is pumped in the economy. when demand is created by this way, it is a theft of purchasing power from those who are producing. does this not discourages producers.

I would like to know your point of view on these questions mike.


DoggeyStyleMikey_AH said...

What artificial lending standards are you talking about?!?!?!!?!?