Bill Mitchell – billy blog
The Balanced Budget silly season is upon us again
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Austral
Tuesday, March 3, 2015
Bill Mitchell — The Balanced Budget silly season is upon us again
Bill Mitchell – billy blog
The Balanced Budget silly season is upon us again
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Austral
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4 comments:
Australian government seems to be running bigger deficits since the collapse in China intensified and drove down domestic growth in Australian investment.
Ryan China rate cut now too....
So this is continued bearish EUR imo as things are being ratcheted down now in China... they have a long way to go vs. the ROW's ZIRP....
More fiscal drag in China now via the rate cuts so exporters are going to continue to price cut in USDs and EZ is going to have to keep responding...
"race to the bottom" continues for the export zombies...
Yup, Europe has designed itself financially to be the swing labor for the world. So with labor markets in the US and around the world doing better, Europe should capture more demand. As Europe drives down their currency, labor and export prices until they get inflation, employment and credit growth at the ECBs desired level by growing the external sector, they should improve. Seems bizarre to me, to use the already volatile external sector to buffer your economy, but...whatever, the orthodox are uncomfortable talking about sector balances because it takes away some of the pejorative description of government that might give the socialists a foothold again. Now the rest of the world will adjust to accommodate Europe as they boost their domestic economies.
In the medium term I think African growth will pull Europe out of the toilet as the development continues to accelerate. The northern African countries have thrown off their shackles and are building new more functional civil societies but have a long way to go. Sub-saharan Africa - Nigeria, Kenya, Tanzania, Ghana, Ivory Coast and several others that already have pretty decent governance and are single mindedly pursuing real economic improvement for the masses are doing very well. There are hundreds of millions of people that will likely multiply their incomes in the next decade which will help reduce the poverty and corruption and further raise the prospects for the region. Their historical ties to Europe remain institutionally and should benefit European and Middle Eastern companies. Europeans harbor deep condescension and racist attitudes because of immigration problems, like the US with Mexico, so they are almost completely blind to what is happening in popular political and social sense. But the European companies are not.
Basically what's happening in a global race to the bottom wrt wages. When that's over, then robotics takes over to drive the wage bill even lower. This is just capitalism 101.
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