Tuesday, 30 September 2014

(Bonus) quotes of the day: On currency depreciation

“The so-called improved competitiveness resulting from currency
depreciation in fact amounts to economic impoverishment. The
"improved competitiveness" means that the citizens of a country are
now getting fewer real imports for a given amount of real exports.
While the country is getting rich in terms of foreign currency, it is
getting poor in terms of real wealth — i.e., in terms of the goods and
services required for maintaining people's lives and well-being.”
- Frank Shostak, ‘Will Currency Devaluation Fix the Eurozone?

“[F]lexible exchange rates preclude an efficient allocation of resources
on an international level, as they immediately hinder and distort real
flows of consumption and investment. Moreover, they make it inevitable t
hat the necessary real downward adjustments in costs take place…in a chaotic environment of competitive devaluations, credit expansion, and inflation…
    “I do not believe we shall regain a system of international stability without
returning to a system of fixed exchange rates, which imposes on the national
central banks the restraint essential for successfully resisting the pressure of the
advocates of inflation in their countries — usually including ministers of finance.”

- F.A. Hayek, quoted in ‘An Austrian Defense of the Euro’ by Jesus Huerta de Soto


  1. Devaluation , quantitative easing by stealth
    Well we all wondered how we were going to pay for that massive borrowing didn’t we.
    For many New Zealanders we just saw our savings drop by the devaluation amount, about 10% over the last months.
    This means you are worth 10% less than you were before the Nat government started its campaign of reducing the cost of it borrowing plan.
    That’s what devaluation is , it devalues you. Your money in the bank, your home, your NZ income all devalued by ten per cent on the international stage.
    The Government borrowed about 60 billion dollars and now is quantitatively easing its way out by money sales, and devaluation.
    So overseas investors will now spook, as the lynch pin of Merril Lynch, starts to play with them..
    And who will pay for this. You will, we will, all of us are devalued. It is only Keywi babble that tells you we are better positioned as a Country.
    Pure money babble.
    Good morning Fonterra milk. Good morning President Xi, our subjects are subjected.
    We have reduced our Social welfare, education , and superannuation costs by ten per cent of our overseas borrowing to pay for this.
    Well, I am going to go right inside the Conservative party and get as absolute policy,that quantitative easing by stealth will not occur under their vote after 2017. I have three years.
    There are going to be a load of angry fixed income people out there, and I am going to light fires,
    The PM spoke of arrogance and hubris, and he is certainly showing us how.

  2. I think I've seen this before somewhere?


    Scene from Casino. Nicky meets bank manger.

    ACE opens the sliding glass door and NICKY enters.

    Hey, Ace.


    NICKY walks over to CHARLIE CLARK.

    Want something to drink? Charlie you
    want a refill?
    Yeah, refill'd be great.

    (Approaching CHARLIE)
    No, I don't want one.
    (Smiling, extends his
    Hey, Mr Clark, how you doin'?

    (Shaking hands)
    Hi. Good.

    (Sitting down with
    him on a couch)
    I've been trying to reach you.
    You're tougher to get than the

    Well, I've been busy.

    Yeah, least you could do is return
    my phone calls, though.

    Listen... Nicky... we talked about
    this... and, uh, I explained to you
    that there was the possibility you
    might have to take some kind of loss.



    I think I want my money back.

    What're you gonna do? Strong-arm me?

    You know... I think that you've gotten
    the wrong impression about me. I
    think in all fairness, I should
    explain to you what it is that I do.
    For instance, tomorrow morning I'll
    get up nice and early, take a walk
    down over to the bank and walk in
    and see you, and, uh... if you don't
    have my money for me, I'll crack
    your f**k*n' head wide open in front
    of everybody in the the bank. And
    just about the time that I'm comin'
    out of jail, hopefully, you'll be
    comin' out of your coma. And guess
    what? I'll split your f**k*n' head
    open again. Because I'm f**k*n'
    stupid. I don't give a f**k about
    jail. That's my business. That's
    what I do. And we know what you do,
    don't we, Charlie? You f**k people
    out of money and get away with it.

    (As he puts a notepad
    in his briefcase)
    You can't talk to me like...

    (Grabbing CHARLIE by
    his jacket)
    Hey, you fat Irish prick. You put my
    f**k*n' money to sleep. You go get
    my money, or I'll put your fuckin'
    brain to sleep.
    (To ACE, panting)

    Never mind f**k*n' Sam. This is
    (Walking with CHARLIE
    to the stairs.)
    I'll be there in the morning. You
    can f**k*n' try me, fatso.

    A frightened CHARLIE hurries down the stairs.

    You f**k*n' try me.

    He turns to ACE who's behind the bar.

    You think he got the point?


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