There was an extraordinary article published on the University of New South Wales News page (January 29, 2015) by a Professor of Finance (Peter Swan) entitled – Federal finances and family budgets have a great deal in common. Juxtapose that with a blog I wrote in December 2012 – Government budgets bear no relation to household budgets. Seems – we have a problem, Houston. Well, Peter Swan has a problem and along with him a raft of mainstream economists, including some who claim to be progressive. They are coming out of the woodwork where they hid during the peak of the crisis, as fiscal stimulus packages were saving the World economies, and are now rehearsing their usual erroneous claims about the dangers of on-going deficits. Their grasp of history and facts appears to be flimsy and their logic nonsensical.…Bill Mitchell – billy blog
The Australian government is not akin to a household
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia
4 comments:
Pretty big developments with Greece today:
http://www.zerohedge.com/news/2015-02-16/eur-tumbles-greek-no-deal-today-comments-eurogroups-unacceptable-unreasonable-reques
Euro 'tumbles' a whole cent to 1.13.
It was 1.33 six months ago - which is the sort of timescales the real world works in.
Typical ZeroHedge scare story.
I get the ZH scaremongering, but the underlying story isn't insignificant.
Will be interested to see what these financial criminals north of Greece cook up on Wednesday.
Neil this supports a "trade terms" theory of forex adjustments imo....
otoh, I think if holders of EUR financial assets started to want to get out of them for some reason and exchange them for USD financial assets, the EUR could fall just based the the exchange of these financial assets vs with trade, its the exchange of real assets....
To this point imo trade terms have been more influential on the EUR/USD exchange rate over the last 6 months...
With the "grexit" looking possible, I suppose this could now swing over to where the trade in purely financial assets becomes more influential... if trade terms of real assets have currently stabilized...
rsp,
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