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EurAnalysis Kindergarten 24 replies

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  • #11,081
  • Nov 22, 2011 2:45am Nov 22, 2011 2:45am
Quoting AaronWard
Why wont it work?
It actually used to work in 1930s. Then the WW2 came. Thats why it is forbidden by Lisabon treaty and thats why Germans dont want to launch the press.
"I know one thing, that I know nothing." Sokrates
  • #11,082
  • Nov 22, 2011 2:50am Nov 22, 2011 2:50am
Quoting AaronWard
Ah, but currently the government prints and uses debt...
Hehehe, you are right. USA monetizes its debt since 1970s. They didnt experienced such a rough war like we did in Europe. They are so sick that everything would be better than FED controlling the press. The only reason why they didnt fail is because they still produce enough GDP. But once they dont,... I dont even want to think of consequences.

Makes me sad just to talk about it.
"I know one thing, that I know nothing." Sokrates
  • #11,083
  • Nov 22, 2011 2:54am Nov 22, 2011 2:54am
Quoting Tom_D_Trader
It actually used to work in 1930s. Then the WW2 came. Thats why it is forbidden by Lisabon treaty and thats why Germans dont want to launch the press.
Most of the countries I know of are currently printing large amounts of money. This list includes Japan, USA, Switzerland and China.

As for what the Germans are doing, and their restrictions on doing it... well obviously some of their money had to be printed by the government otherwise they wouldn't have any money.

Also, if I were to look at a cause for the European discomfort about government printing, I think the hyperinflation at the end of WWII and the collapse of the Soviet Union probably disturb the European leaders more than German hyperinflation in 1923. You see, the current batch of leaders directly experienced both. They were children for the first round (if they are in their late 60's) and they were adults in responsible positions for the second round.

Do you know what, exactly, is forbidden in the Lisbon treaty? (I don't)
Kill the ego, or it will kill the mission.
  • #11,084
  • Nov 22, 2011 2:58am Nov 22, 2011 2:58am
Quoting Tom_D_Trader
Hehehe, you are right. USA monetizes its debt since 1970s. They didnt experienced such a rough war like we did in Europe. They are so sick that everything would be better than FED controlling the press. The only reason why they didnt fail is because they still produce enough GDP. But once they dont,... I dont even want to think of consequences.

Makes me sad just to talk about it.
The US Gov is like Bernard Madoff... a giant ponzi scheme. As long as there are tax revenues coming in from the real economy and more creditors lining up at the door to lend more, the debts can be paid. If that dries up, it's hyperinflation time followed by a depression and bankruptcy. It's that simple... except this time the real culprits (politicians) don't go to jail as they are untouchable. Instead they will find a patsy to blame. Benny perhaps?

ADD: Actually it's not just the US gov. Add to the list the UK, Japan, Switzerland, Canada, etc... but not the EuroZone (Yet)
Those who say it cannot be done should not interrupt those who are doing it
  • #11,085
  • Nov 22, 2011 3:07am Nov 22, 2011 3:07am
Quoting AaronWard
Most of the countries I know of are currently printing large amounts of money...
I already mentioned that treaty several times and thought you have read it. I aint sure about it, I didnt read that whole crap. All I know is that it was in Czech constitution and in German constitution as well and I assumed this was projected to Lisabon. And current circumstances tend me to think I am right.

Nevertheless, yes, they have to print some in order to have something to pay with. Ofc. But monetization of sovereign debt is proven by history as leading to inevitable failure. Doesnt matter if we are talking about Weymar Germany, Argentina, or whatever.

Point of no return is when nation stops producing GDP. That is called overheating of economy and results in hyperinflation, unemployment, bankrupt and heavy social unrest. History already proved it many times. This is absolutely no way and I am pretty sure that both Japan and USA will pay heavy price for this.

It is needed to mention here, that Switzerland aint doing heavy printing. You can monetize some debt, thats normal regulation of money supply. Problems occur, while you do this as your national scheme of cheap GDP.

T
"I know one thing, that I know nothing." Sokrates
  • #11,086
  • Nov 22, 2011 3:09am Nov 22, 2011 3:09am
Spanish Bond auction today. Results are due in about 30 minutes.
Those who say it cannot be done should not interrupt those who are doing it
  • #11,087
  • Nov 22, 2011 3:12am Nov 22, 2011 3:12am
Still respecting the falling wedge but it is flirting with it.

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Those who say it cannot be done should not interrupt those who are doing it
  • #11,088
  • Nov 22, 2011 3:20am Nov 22, 2011 3:20am
Quoting Tom_D_Trader
I already mentioned that treaty several times and thought you have read it. I aint sure about it, I didnt read that whole crap. All I know is that it was in Czech constitution and in German constitution as well and I assumed this was projected to Lisabon. And current circumstances tend me to think I am right.

Nevertheless, yes, they have to print some in order to have something to pay with. Ofc. But monetization of sovereign debt is proven by history as leading to inevitable failure. Doesnt matter if we are talking about Weymar Germany,...
I know very little about European laws, a bit more about North American laws and quite a bit about Chinese laws. I always wonder why the Europeans don't monetize a good part of their debt. Monetizing their debt will likely cause serious problems, but not will certainly cause serious problems.

I am somewhat skeptical about historical processes that are inevitable. I lived through the Eighties and double digit inflation. However that something is not inevitable does not mean that it wont happen.

Further, hyperinflation is probably less a problem that a protracted depression. The hyperinflation of 1923 did not give rise to Hitler --the subsequent world depression of 1930 did.

My understanding is the Swiss are into QE big time. Part of the whole "devalue the Swissy" movement.
Kill the ego, or it will kill the mission.
  • #11,089
  • Nov 22, 2011 3:34am Nov 22, 2011 3:34am
carefull guys she squeezing a bit here could do a rip
  • #11,090
  • Nov 22, 2011 3:48am Nov 22, 2011 3:48am
This conversation starts to be on many topics, so I quoted you several times.

Quoting AaronWard
Monetizing their debt will likely cause serious problems, but not will certainly cause serious problems.
Perhaps you are right and some minor regulation of money supply could/should take place. And I aint against it. What I am totally aginst is inflation race like in USA and Japan. And I think those nations will pay heavy price for that. Price in blood.

Quoting AaronWard
I am somewhat skeptical about historical processes that are inevitable.
You see, "I know, that I know nothing." is my favourite statement. The second one in row is "Historia est magistra vitae". I give lot of value to history. People tend to do same mistakes again and again and I wont participate in this scheme under any circumstances. It is absolutely against my nature.

Quoting AaronWard
Further, hyperinflation is probably less a problem that a protracted depression. The hyperinflation of 1923 did not give rise to Hitler --the subsequent world depression of 1930 did.
You said it yourself. Subsequent depression. Although we could find many reasons for depression in those times (there was plague, oil crisis), I give the biggest value to hyperinflation. This topic is one of my favourite debate with my friend, who is a historician. He always tends to talk about pressure between post royal families, feudals and such stuff. You can look at this issue from many anges, but my angle is monetization - oil crisis - hyperinflation - unemployment - depression - war.

Quoting AaronWard
My understanding is the Swiss are into QE big time. Part of the whole "devalue the Swissy" movement.
I aint sure about that, but you may be right. Who actually knows what are they doing. I know they bought fkin hoardes of Yen in mid 2010 so it seems to me they are intervening more in currency market than by printing.

T
"I know one thing, that I know nothing." Sokrates
  • #11,091
  • Nov 22, 2011 3:52am Nov 22, 2011 3:52am
Quoting ingmarforex
carefull guys she squeezing a bit here could do a rip
Hmh, up to where huh? I hope for 3610 so I can load some more shorts. I dont see any move higher as likely, but there are some tasty margins above 3610 so if it breaks we could be heading towards 3666. I certainly wouldnt like that and see that as unlikely
"I know one thing, that I know nothing." Sokrates
  • #11,092
  • Nov 22, 2011 4:02am Nov 22, 2011 4:02am
Quoting Tom_D_Trader
Hmh, up to where huh? I hope for 3610 so I can load some more shorts. I dont see any move higher as likely, but there are some tasty margins above 3610 so if it breaks we could be heading towards 3666. I certainly wouldnt like that and see that as unlikely
she is testing now you might get your price or maybe not time will tell
  • #11,093
  • Nov 22, 2011 4:03am Nov 22, 2011 4:03am
10 yr spanish trading near 6.5% +3 bps
  • #11,094
  • Nov 22, 2011 4:05am Nov 22, 2011 4:05am
Hi Tom,

Hyperinflation is an interesting topic, but one that is typically poorly understood. Usually it is a symptom of some other problem, and is relatively short lived (1-2 years). It is far more common that it is caused by the fall of a government than it causes the fall of the government. It lives in close proximity to war and is commonly one of the prices of defeat.

I would check out shadowstats (its a website) if you are interested in hyperinflation. The guy is a number cruncher like you and his methodology is excellent. His report "Special Report on Hyperinflation" is probably one of the best doom and gloom reports out there.

I think if you reverse your cycle of cause and effect, starting with war, you will very frequently find depression proceeds war, but hyperinflation does not commonly preceded depression. Rather, hyperinflation is a very special type of depression. As far as economic phenomenon go, hyperinflation (100% or greater inflation per year) is quite rare and is always short lived.
Kill the ego, or it will kill the mission.
  • #11,095
  • Nov 22, 2011 4:05am Nov 22, 2011 4:05am
Everything is so slow, silence before the storm?
  • #11,096
  • Nov 22, 2011 4:06am Nov 22, 2011 4:06am
scary thing is this market has no volume at all air
  • #11,097
  • Nov 22, 2011 4:07am Nov 22, 2011 4:07am
South or north, east or west storm winds?

Quoting GoldMan.
Everything is so slow, silence before the storm?
  • #11,098
  • Nov 22, 2011 4:08am Nov 22, 2011 4:08am
the usseles thread has the stops above 60s so liitle push more
  • #11,099
  • Nov 22, 2011 4:13am Nov 22, 2011 4:13am
Quoting TheSwede
South or north, east or west storm winds?
No clue, been buying gold and selling dax30 but only collecting pennies today.
  • #11,100
  • Nov 22, 2011 4:13am Nov 22, 2011 4:13am
Quoting TheSwede
South or north, east or west storm winds?
It price manages to break through the resistance at 1.3550 area which also lines up with the H1 200ema and sma lines, the next stop will be the 1.3600/1.3620 area which is a medium strength supply zone. Beyond that we have the falling channel resistance at approx 1.3660/70

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area

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Those who say it cannot be done should not interrupt those who are doing it
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