Stuff

by geezer in Paris
Sat Nov 24th, 2007 at 08:31:30 AM EST

Here's a diary for International Buy Nothing Day.

Since shortly after WWII, it has been a central element of US national strategy to dominate the world.  Many sources have shown this, not the least the recent release of policy and defense documents from the early 50s under a freedom of information act request by the National Security Archives. It was clear by then that we had in place most of the necessary domestic elements to achieve that goal.  But the Soviet Union, whether or not it was the great bear that it was made out to be, was a nuclear obstacle. The threat of a coherent international socialism and the labor movement also acted as a drag on the imperial juggernaut. Clearly, our "people control" was incomplete. So it took time. But these speed bumps have been removed from the Imperial highway, and the exploding productivity of industrial America produced an avalanche of consumer goods. Voila! The necessary Soma- the magic potion to render the masses- us- unable or uninterested in meddling in the affairs of our betters---stuff.

Great diary - read this instead of buying stuff today - In Wales


Stuff?

Across the street from our tract house in Orlando lived an older man who had everything. He would mow his lawn in front with a push mower, and his larger lawn in back with a riding mower. He would trim his tiny hedge with the trimmers, then weed-whip the rest, then pressure-wash all the toys with his washer, then wash the driveway where the telltale residue of natural ick lay. When he opened his two-car garage, one could see, besides his second car, a jet-ski and trailer, a Hobie cat,  a motorcycle, bikes,-- an endless (and typical)
array of stuff. We never knew his name, because that's the way the neighborhood was- a typical American
bedroom community with little real community at all- and he rarely ever came out unless he was doing stuff with his stuff. This man, and millions like him are -- docile.

Without a hint of state coercion, without draconian police pressure or the threat of a trip to the gulag, they have been rendered impotent. They rock no boats. They rarely meddle with the affairs of their betters, because they are too busy playing with their stuff. Cleaning their stuff, storing it, insuring it, learning how to use it, and above all, busting their ass at work to pay for their stuff.
One day my girls and I went out to the store, to buy stuff (yes, we are not immune), and there it was--the last act. A row of cars in front of his house, with a hearse at the front. His last ride. His epitaph might be:

He who dies with the most toys wins... I won!

The conditions that neoliberalism demands in order to free human beings from the slavery of the state - minimal taxes, the dismantling of public services and social security, deregulation, the breaking of the unions - just happen to be the conditions required to make the elite even richer, while leaving everyone else to sink or swim. In practice the philosophy developed at Mont Pelerin is little but an elaborate disguise for a wealth grab".
George Monbiot

Even the elite succumb to their own bullshit. They themselves think stuff is wealth.
In the empire, the incredibly poor but stuff-soaked empire, the sea we sink in is an ocean of stuff.

Not everyone took to stuff happily. An odd, discordant note in the march to Empire was the widespread public uprising that ended the Viet Nam war. Though practically every sector of the population participated, the vanguard was the young, college educated who came from an odd group- a movement that has been almost erased from our collective memory. I think it would be fair to call them "Young People Against Stuff". They had mostly grown up in privilege, but for some reason a life of stuff lost its appeal. In archetypal form, they were drawn to community more than stuff. So they tended to live sparingly and often collectively; their catalogs were filled with tools (the Whole Earth Catalog) instead of toys and they detested materialism as a way of life. Like the consumer boycott- the most powerful tool ever created in the battle against corporate control- they and their ideas were quickly vilified, branded as unwashed and un-American, their passions and victories deleted from history. In truth, it was these deserters from the world of Stuff that Nixon wished to suppress, with his CoIntelPro. He needen't have bothered-- Madison Avenue and conglomerate media saw the threat, and whipped us like dogs. The Whole Earth Catalog is now --The Sharper Image.

Liberty, Fraternity, Equality. ---Right?

The Empire arrived here in France gradually- not by military force, but by stuff-invasion.

Doing stuff with stuff is mostly a solitary thing-you commune with your toys. Your laptop. Your Blackberry. Your Mp3. -Right? You blog - not WITH the world, but TO the world, with a comfortable filter in between, and the magic off-switch to make it all disappear on command. Stuff emphasizes separateness.

Byby, Fraternity.

Stuff can rule your life. Stuff eats great gouts of time and energy. Stuff, when it becomes the central process of life, eats culture, because there is no time for culture. Or freedom. Risk your job-risk your stuff.

Byby, Liberty

And,--well, we're all equal under stuff--right?

The competition for Stuff is the ultimate tool in the real battle- the battle to control the masses. Neoliberalism and Hayekian crap reveal themselves as not just cash grabbers, but amazing tools. In a world based on competition for stuff, equality is a bad joke, an illusion- as "quaint" as the Geneva conventions are in the world of Gonzales.

Byby, Equality.

 My wife and I watched at least the latter part of the growth of a relentless media-led campaign to teach the same stuff addiction here in France that exists all over America. It has been a very successful campaign, at least partly because teaching "stuff" is pretty easy. It seems to be a clear case of swimming down stream. My wife Joyce made jokes about herself that came from her compulsive acquisition of do-dads and gewgaws, shiny things and trinkets, as being the "crow in me". But we all have this drive, and it's a dangerous handle attached to our souls. Think of the Straussian "noble lies", or the other pander philosophies that oozed out of the Mont Pelerin society and Hayek. In a rational world, their emptiness would be obvious. But they serve as the perfect justification for greed- an endless life of acquisition- as a replacement for community, and they rule our world, at the moment.

We saw at least the last part of the process in the United States. We wrote and we talked, we built our independent communities and farms, our free universities and street schools.
"What if they had a war and--nobody came?"
We got their attention--as would any philosophical movement that called into question the control technology of the elite. We were arrested, evicted and ejected, villainized and accused. Some of us "moved further back", some of us fought and lost. Eventually Joyce and I succumbed to the apparent reality of our powerlessness, and sailed away.
Twenty years later, years of joyous wandering, we came to Paris.

The day Chirac made a deal to sell the French eyeballs to Rupert Murdoch, we knew that the Empire had truly followed us.

Since that time, we have lived in South Africa and the Netherlands, and, even post-Empire, we are still in love with Paris. Like a lover being ravaged by a dread disease, we will not abandon her, because there's life in the old girl yet. We will wiggle our way through the crowds of cell-phone disabled shoppers without crushing anyone, and try to look at the wider picture.
Velib
Velib' is a wonderful idea that reduces the need to own a bicycle, and that seems to work. Clumps of good bicycles on every important corner, a small annual fee, --and--Voila! Less traffic, less pollution, less theft, less cost for the users, wonderful utility. And a little exercise without the need for spandex. And less stuff.
Old, good teachers.
The directrice of Giselle's school, in one of the most upscale areas in Paris still goes out and personally, in violation of all rules and at the risk of her job, canvases the area for potential students to form a representative racial and demographic balance. She said to us, "I don't want to direct a school for spoiled rich kids. No matter what the parents want. They can fire me if they want." And winks.  She is old, gay and communist, and I love her. They won't fire her, because she is superb, and they know it.

Many, many programs to do with recycling and conservation. Among them, this:

www.festivalenvironnement.com

The schools are full of new education in conservation and recycling, the metro is full of new containers, and it is not important whether these actually make a great change, but that they validate the idea of conservation, that conservation is not yet seen here as "losing", as Poverty. That "wealth" transcends "stuff".

Finally,
-What happens to "stuff" as the central technique of social control in a world of global warming? Of a post-peak oil world? Of Junk dollars? Of resource stretch? What happens to the Empire when the Empire's greatest source of power -consuming- is a dead duck?

I think the Empire either dies, or changes greatly. It's that last bit that worries me. I don't think it will die quietly. And no one whom I respect, who has examined the process, sees any combination of forces that might divert the Empire from the relentless pursuit of "stuff".

It's up to us to answer that question, and do something, before it's cast in stone. Paris has taken some good steps.

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My father had a garage full of little boxes labelled, for example, as bicycle bell parts. He removed the screws from any furniture that was no longer serviceable and carefully categorized and saved them. My mother took apart knitware that was no longer worn and reknitted it. I still have a poloneck that she made for me 45 years ago.

Sounds crazy, but I was born during WWII and the years after, my childhood, were years of scarcity. Sweets were rationed and I had few toys - but plenty of materials to make things with. So I learned to use (and was encouraged to use) all sorts of tools. I was wallpapering at 11, and learned the correct way to 'lay off' the paint on a panel door at the same time. Proper painting is very satisfying.

Today I have those equivalent little boxes, though not in a garage. And all the tools. My first interest in films was as much about taking apart the cameras and keepng them running in tiptop shape, as it was about what you could do with them.

I've never built a house, but I have done a lot of fencing, built two greenhouses, a large verandah, and replaced the wood tile 'pare' roofing on two wooden houses. Working with wood makes me happy - though it screws my back ;-)

I can do electrics - but in Finland your insurance only covers qualified professional work. I can't do plumbing and I can't fix cars.

The tools I use today I can't really fix - computers, recorders, cameras, printers etc. It annoys me that I can't repair these things. About the only gadget that I have that is not part of my work is an original iPod that someone else threw away, and I got a new battery installed. So I rescued it and was pleased to do so. Almost everything else I have is antique - but not valuable antique, just interesting old. Even my very loud but clean sound system is rescued from a 1976 pro recording studio. My SE 910i mobile will soon be 2 years old.

So I am a terrible shopper. I buy no 'stuff'. I would be a saint, except for the new lease car outside ;-)

You can't be me, I'm taken

by Sven Triloqvist on Sat Nov 24th, 2007 at 08:09:22 AM EST
Ah, yes. There's stuff-- and then there's stuff.

Now, there's good stuff!

Joyce's father was a plumber and heating contractor, and her earliest memory of Christmas was that her father built her a little stool that he would take along on jobs for her to sit on while he worked,--so she could learn. She was very good with tools.
After he died, they tried for three years to clean out his basement, and finally gave up. Brother Jim just adopted the stuff.

Along these lines, there were two striking differences between Paris and the US when we first came here 20 years ago.

First, here people could repair very little, and in fact, to do so was---a bit revealing, in a negative way. I could not believe that people would call a specialist to fix a stuck window. In Ohio, such skills were then almost universal. I think it was more a Paris thing than a French thing.

Second, we saw right away much knowledge about how to live comfortably and well- within an economy of scarcity.
Such knowledge existed in the US too- but was washed away by the consumer culture. Before my eyes.

I hate to own things I can't fix.

Useful talking follows experience, the more experience the better. Talking that precedes experience is known as bullshit.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Sat Nov 24th, 2007 at 02:20:32 PM EST
[ Parent ]
Don't Mend is one of the basic slogans of Huxley's Brave New World. Getting closer to that, faster and faster.

Auferre, trucidare, rapere, falsis nominibus imperium; atque, ubi solitudinem faciunt, pacem appellant.
by linca (antonin POINT lucas AROBASE gmail.com) on Sat Nov 24th, 2007 at 04:54:19 PM EST
[ Parent ]
Velibs sound nice. Except they are financed with, guess what ? Ads? More adds to sell more stuff - including cars.

Not that it prevents me using them...

Auferre, trucidare, rapere, falsis nominibus imperium; atque, ubi solitudinem faciunt, pacem appellant.

by linca (antonin POINT lucas AROBASE gmail.com) on Sat Nov 24th, 2007 at 08:20:20 AM EST
Helsinki started this in 2000, but it is for tourists - so far.

http://members.aol.com/humorme81/helsinki.htm

You can't be me, I'm taken

by Sven Triloqvist on Sat Nov 24th, 2007 at 09:15:42 AM EST
[ Parent ]
i remember amsterdam trying it out in the 60's, but the bikes got nicked after a while.

i think the first song with that great guitar player who later formed 'yes' whose name escapes me right now, oh yeah steve howe, was in a band called 'tomorrow' i saw at the marquee club doing a song called 'my white bicycle' about the phenomenon.

ads will pay for a free variety of services for everyone eventually, it looks like.

in fact it's the only positive thing i can ascribe to advertising (except for that .00000001% that's actually artistic)...sorry, no offence sven!

i'll bet yours is, anyway...

There are no blank spots on the map any more, anywhere on earth. You want a blank spot on the map, you gotta leave the map behind. Jon Krakauer

by melo (melometa4(at)gmail.com) on Mon Nov 26th, 2007 at 09:39:29 AM EST
[ Parent ]
Ach, -- the eternal quest for purity.

"Daddy, Daddy, why is the sky blue?"
"Shut up and pedal. I'm late for work."
:-)

Useful talking follows experience, the more experience the better. Talking that precedes experience is known as bullshit.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Sat Nov 24th, 2007 at 02:28:30 PM EST
[ Parent ]
And how will the poor survive when the relentless pursuit of stuff ends? Yes, that is the question. Because the end will be catastrophic and no one has made any plans or provisions for what might follow to keep everyone in the WEST in their basic needs of food and shelter. Oh, the rich need not worry, they never have. That's why the poor have been willing to pursue stuff interminably, to mimic the rich, to get a whiff of paradise. Go shopping my friend, no other alternative exists. That's the essence of the cruel, sadistic joke which has been played on the bulk of the population. Either do as we say, said Alan Greenspan and Bill Clinton, or die.
by Quentin on Sat Nov 24th, 2007 at 09:08:35 AM EST
Great stuff, this stuff-diary, and wonderful well written. I enjoyed every bit of it.
Thanks geezer!

The struggle of man against tyranny is the struggle of memory against forgetting.(Kundera)
by Elco B (elcob at scarlet dot be) on Sat Nov 24th, 2007 at 09:15:44 AM EST
"Will Europe impose exchange controls to head off disaster?"

The die is now cast. As the euro brushes $1.50 against the dollar, it is already too late to stop the eurozone hurtling into a full-fledged economic and political crisis. We now have to start asking whether the EU itself will survive in its current form.

Telegraph.co.uk - but other than that, a possible scenario?

You can't be me, I'm taken

by Sven Triloqvist on Sat Nov 24th, 2007 at 11:52:25 AM EST
[Torygraph Alert]
As the euro brushes $1.50 against the dollar, it is already too late to stop the eurozone hurtling into a full-fledged economic and political crisis.
Can someone explain whether there is any actual economic substance to that claim?

And, if $1.50 to the Euro is sufficient to guarantee an economic and political crisis in the Eurozone, why is $2.10 to the Pound not enough to send the British economy into a tailspin?

We have met the enemy, and he is us — Pogo

by Migeru (migeru at eurotrib dot com) on Sat Nov 24th, 2007 at 12:01:35 PM EST
[ Parent ]
I've emailed the guy to ask

Interviewer: What do you believe is behind this recent increase in terrorist bombings? Helpmann: Bad sportsmanship
by ceebs (bunchofwankers (at) gmail (dot) com) on Sat Nov 24th, 2007 at 12:23:54 PM EST
[ Parent ]

  1. Britain is far less dependent on manufacturing than some euro-zone states.
  2. sterling is falling aginst the euro and Swiss franc -- to 4 year lows viz euro, so the currency overshoot is not as extreme.
  3. sterling will fall a lot further, and that will rescue us. The problem for the Spain, Italy, Greece, et al, is that they cannot devalue. They are tied to the German-Austia-Dutch-Finish bloc, which has a much higher euro pain threshold.
  4. UK can and will slash interest rates. Club Med cannot do so until Germany is ready, which it is not...
<snip>
By the way, I'm not saying the eurozone is "inevitable". If Germany is willing to tolerate inflation, Club Med will be given a lifeline. I am saying that there will be a major crisis whatever.



Interviewer: What do you believe is behind this recent increase in terrorist bombings? Helpmann: Bad sportsmanship
by ceebs (bunchofwankers (at) gmail (dot) com) on Sat Nov 24th, 2007 at 07:14:43 PM EST
[ Parent ]
  1. the eurozone is a large economy, much less dependent on trade than individual members are. As I noted, exports to the US are less than 3% of GDP. And, in line with Anglo Disease stories, having a manufacturing sector is likely to be a good thing as the financial sector crashes down;

  2. true. But the impact of the Anglo Disease on that point is unclear

  3. (hmm.. in what category does he put France...?) Again the eurozone is a large economy. Most of Italy's and Spain's exports go to the rest of the eurozone and thus are not sensitive to outside exchange rates. Sterling moving against the euro has an immediate impact for most of UK's trade.

  4. The ECB has clearly chosen a policy which was no closer to German needs than to Spanish or Irish needs in the past (Germany would have required lower rates, Spain higher ones). TIt is a pragmatic institution which is not given enough credit for what it does (see Migeru's comment lower down about its awareness of its political role, and its willingness to intervene to pump liquidity in recent months, without pontificating and then folding)


In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (jeromeguillet@yahoo.fr) on Sun Nov 25th, 2007 at 04:41:35 AM EST
[ Parent ]
ceebs:

Britain is far less dependent on manufacturing than some euro-zone states.

Britain is far more dependent on financial speculation and puffery than some Eurozone states. An economy built on funny money CDOs and junk mortgages is clearly in such a strong position at the moment.

ceebs:

sterling is falling aginst the euro and Swiss franc -- to 4 year lows viz euro, so the currency overshoot is not as extreme.

Overshoot? What overshoot? We're talking about a currency which is starting an inflationary spiral and is likely to default on some or all of its obligations within the next 5-10 years.

There is no overshoot here. If anything it's faith-based nonsense like this which is making the dollar dump too cautious.

ceebs:

sterling will fall a lot further, and that will rescue us.

Because that's such good news for an economy based on rickety financial scams which imports almost everything that matters.

ceebs:

UK can and will slash interest rates. Club Med cannot do so until Germany is ready, which it is not...

The UK can't slash interest rates without creating stagflation. A rate fix is another roll-out for the Greenspan put, and we know how well that worked for the US.

Honestly - where do they find these people? He sounds like he has genetic connections to the geniuses at the Treasury who are predicting $20/bl oil.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun Nov 25th, 2007 at 08:26:10 AM EST
[ Parent ]
Fascinating answers...

You can't be me, I'm taken
by Sven Triloqvist on Sun Nov 25th, 2007 at 02:26:05 PM EST
[ Parent ]
Because we all know the Brits are more doomed than anyone.  It's just a question of when.  If Americans are up to their necks in debt, the Brits are standing on the floor of the Pacific.

Even setting aside my skepticism of claims that some sort of grand crisis on a scale previously unseen is coming, I don't see an economic or political crisis arising because of exchange rates.  But there is some argument to be made that Europe shouldn't rely on decoupling from the US to save it from the fallout here.  The markets in Europe have been rocky, and Trichet is pumping quite a lot of money into the system.

Where's your motherf*%&ing flag pin?

by Drew J Jones (blahblahblah@blahblahblah.com) on Sat Nov 24th, 2007 at 12:39:48 PM EST
[ Parent ]
Drew, do you have any idea how exposed the EU financial system is to the CDO debacle?

Have epistemological model of Complex Information environments. Will Travel.
by ATinNM on Sat Nov 24th, 2007 at 01:39:36 PM EST
[ Parent ]
Please elaborate.

Useful talking follows experience, the more experience the better. Talking that precedes experience is known as bullshit.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Sat Nov 24th, 2007 at 02:38:16 PM EST
[ Parent ]
CDO = Collateralized Debt Obligations.  These hunks of junk are bonds issued by banks "backed" - hahahahahahahaha! - by consumer credit card debt, mostly.

This will be the next domino, IMHO, to fall in the developing global financial re-adjustment.  

Knowing the exposure, meaning how much money has been "invested" - hahahahahahahaha! - in these things, by EU financial entities: banks, hedge funds, & etc., goes some way to allowing us to forecast the health of the EU financial sector over, say, the next 2 years.

At least that's the reason for my question.

Have epistemological model of Complex Information environments. Will Travel.

by ATinNM on Sat Nov 24th, 2007 at 03:47:26 PM EST
[ Parent ]
Honestly, I have no idea how much exposure the European financial system has right now to the mess going on in America, let alone specific issues like the CDOs, but my sense is that, judging by the news from August to now, there is a good bit of exposure.  A lot of European and Asian firms got involved in this, and a lot are going to be in serious trouble, I'd guess.

What the European macroeconomic picture will look like over the next few years is better for people like Jerome to discuss, because I'm not at all tuned-in to it.

Where's your motherf*%&ing flag pin?

by Drew J Jones (blahblahblah@blahblahblah.com) on Sat Nov 24th, 2007 at 04:16:57 PM EST
[ Parent ]
Thanks, Drew.  I'm in the same boat.  

Jerome?  Migeru?  You guys got anything?

Have epistemological model of Complex Information environments. Will Travel.

by ATinNM on Sat Nov 24th, 2007 at 05:13:33 PM EST
[ Parent ]
At least Trichet is pumping quite a lot of money into the system. He clearly believes the Central Bank is part of Government and has a role to play, as opposed to just watching the show from the sidelines making comments about moral hazard like his Angloamerican counterparts.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Sat Nov 24th, 2007 at 07:06:14 PM EST
[ Parent ]
You think a .75 cut since mid-September qualifies as "sitting on the sidelines"?  Your argument makes sense on Mervyn King, but Bernanke can hardly be said to have simply sat around.

Where's your motherf*%&ing flag pin?
by Drew J Jones (blahblahblah@blahblahblah.com) on Sun Nov 25th, 2007 at 09:42:08 AM EST
[ Parent ]
And Mervyn King is rumoured to be about to lower rates by .75 to ease the pressure on consumers after they pile on debt for their Christmas binge-spending.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Sun Nov 25th, 2007 at 03:38:25 PM EST
[ Parent ]
I doubt that, but I suppose it depends on what sort of timeline you're thinking of.  I do think we'll see cuts in Britain soon, if the stories on the housing industry are to be believed.

All of them will likely be cutting rates next year.  I disagree with the idea that they'll fall below 3% in the states, but they'll be significantly lower.  The question is:  How much will Europe be tied up in this?

Where's your motherf*%&ing flag pin?

by Drew J Jones (blahblahblah@blahblahblah.com) on Sun Nov 25th, 2007 at 03:49:59 PM EST
[ Parent ]
[Murdoch Alert] : Interest rates  Set to tumble: Bank of England hinted (The Sun, 15 November 2007)

INTEREST rates are set to tumble next year in a big boost for homeowners, the Bank of England hinted yesterday.

It said the UK economy would grow more slowly in 2008 -- with house price inflation slowing and consumers spending less.

Governor Mervyn King also warned that continued fallout from this summer's Northern Rock credit crisis could play a part.

He said: "This looks like a fairly sharp slowdown. What is difficult to judge is whether the slowing is bigger than we would have wanted."

City economists said it was a clear sign that interest rates would fall from their present rate of 5.75 per cent.

Sure, this is The Sun, but I saw it all over the press two weeks ago.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Sun Nov 25th, 2007 at 05:24:15 PM EST
[ Parent ]
Right, but what does "tumble" mean?  Is this a word they use in the mouth-breather papers in Britain?  And what does "next year" mean?

(And all that depends on what the definition of "is" is.  Yes, I know, all very Bill Clinton.)

Where's your motherf*%&ing flag pin?

by Drew J Jones (blahblahblah@blahblahblah.com) on Sun Nov 25th, 2007 at 06:03:28 PM EST
[ Parent ]
Well, what I said in my previous comment based on what I saw in other mouth-breathing British papers: expect two rate cuts, for a total of three quarter-points, in the first quarter of next year.

Now, whether this is an interested rumour by industry insiders who would gain from the market effects of the very rumour, or expect to be able to create such a climate of expectation as to force the hand of the BoE, I don't know. Everything is possible.

I really don't understand monetary theory so I don't know what I think the "right" interest rate policy should be over the next 6 months. But that's what I hear. I do think that lowering rates is just going to pour gasoline on the flames of the asset bubble.

We have met the enemy, and he is us — Pogo

by Migeru (migeru at eurotrib dot com) on Sun Nov 25th, 2007 at 06:09:10 PM EST
[ Parent ]
I wouldn't rule it out, obviously, given what we've seen, but that would be quite a steep drop.  That's the same drop we've seen from the Fed, which was based partly on perceived danger and partly (I think) on a perception of inevitability from Wall Street.  Things would need to get very nasty very quick to see something like that, and King has, up to this point, not revealed himself to be Mr Rate Cut.

I don't know what the BoE's mandate says specifically.  I know the Fed's, and you've told me the ECB's, but the basic premise is likely the same:  Balance stable prices (stable growth in prices really) with maximum output/employment.

If I were King, I'd be very hesitant to do anything that might be equivalent to pouring gasoline on the fire in Britain.  As it is, I think we're looking at one of the nastiest crashes around the globe there -- much worse than in America and countries with comparable bubbles.  Average and median house prices in Britain are fast-approaching double those in America, and some indices have them already surpassing that point.

Where's your motherf*%&ing flag pin?

by Drew J Jones (blahblahblah@blahblahblah.com) on Sun Nov 25th, 2007 at 06:26:49 PM EST
[ Parent ]

As the euro brushes $1.50 against the dollar, it is already too late to stop the eurozone hurtling into a full-fledged economic and political crisis. We now have to start asking whether the EU itself will survive in its current form.

Right. Because the crisis is in the eurozone, and not at all in the City or tha land of unusstainable and unpaid for McMansions and Cadillac Escalades.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (jeromeguillet@yahoo.fr) on Sat Nov 24th, 2007 at 12:06:41 PM EST
[ Parent ]
"Will Europe impose exchange controls to head off disaster?"

The die is now cast. As the euro brushes $1.50 against the dollar, it is already too late to stop the eurozone hurtling into a full-fledged economic and political crisis. We now have to start asking whether the EU itself will survive in its current form.

My, my, how things change.

Not too long ago the die was as the euro plummeted towards worthless invoking a full-fledged economic, social, and political disaster; which, in time, would cause the very EU itself to explode in a puff of nothingness.

Telegraph.co.uk - but other than that, a possible scenario?

No.

Look, the global economy requires a reserve currency that, more or less, holds its value for a reasonable period of time.  Anyone, with any sense, has already started to move away from the US dollar due to its structural weakness.  As the financial crises plays itself out the € is only going to move into a stronger position relative to the $.  

True some purchasers of new equipment (stuff) may decide to buy American based on the relative pricing but that's insignificant compared to the purchase of parts and services to maintain and upgrade the equipment (stuff) already existing in plants, shops, and homes and the relationship(s) that fosters.  

The eurozone consumer purchases will still be transacted in euros, thus supporting the euro.

Keeping a manufacturing base somewhere in the EU will help support microeconomic activity within the EU thus supporting the euro.

As the oil producers move away from the dollar the euro will be supported by Peak Oil to the extent the basket of currencies - if they are smart - incorporates the euro as a percentage of the basket.

Last, believe it or not, except for the trans-nats (and who cares about them?) most firms don't base fundamental business decisions on currency moves.  The rise of the euro versus the dollar actually illustrates why.  Any company that based their long term business decisions on the relative value of the euro/dollar as it was 2 years ago is in deep trouble today.  

Have epistemological model of Complex Information environments. Will Travel.

by ATinNM on Sat Nov 24th, 2007 at 01:34:33 PM EST
[ Parent ]
Good. All the skepticism is justified. But I would like someone to say if the following is so: if the relative relationship of the € to non-dollar currencies remains at its current levels into the future, does it really matter what happens to the dollar?

You can't be me, I'm taken
by Sven Triloqvist on Sat Nov 24th, 2007 at 02:11:55 PM EST
[ Parent ]
Time limit on my response is 2 years.  After that the affects of Peak Oil and Global Warming makes it impossible to even guess.  (Which is what, after all, I'm doing.)

Yes.  It matters to me, and others on this list, as we live in the dollar economy.  How bad it will be depends on how hard-nosed the rest of the world gets when they realize they ain't gonna their money back.  As an example, the US automotive industry, to stave off bankruptcy, utterly depends on rolling over their existing debt OR they will have to raise capital through equity to pay for principal return OR they will have to be bought-out, taken-over, by something capable of returning the principal.  

No.  To those of you living in the eurozone and who do not make a living off the international commodity trade - which includes currencies, btw - or financial services most likely all you'll see is a stronger attempt by the PRC to move into EU markets coupled with a slow rise in the amount of American goods and services attempting to enter the market.  The downside affects will be felt primarily in those EU countries that profited from the insanity of the dollar and pound areas economic policies.  

Maybe.  For those who do make their living in the international commodity trade or financial services life is about to get interesting.  (Bankers love these times.  It gives them nice warm fuzzies.   Just ask Jerome. :)

For years some of us on ET have shouting the financial Models being used were bullshit.  Over the last 3 months, say, the financial world has arisen from its dreams and realized, "Hey!  Our Models are bullshit!"  Then they thought, "If our Models are bullshit what about .....?  OH NO!"  And stopped lending to each other.

What we've got going on is a classic Flight to Quality where nobody knows where the Quality is:  euros?  yen? rubles? gold?  Slovenian Goat's Head Cheese?  

So the 'Maybe' depends on how the Flight to an Unknown Quality plays out.

(Apologies to geezer for going O/T & trampling all over his diary)

Have epistemological model of Complex Information environments. Will Travel.

by ATinNM on Sat Nov 24th, 2007 at 05:10:56 PM EST
[ Parent ]
Forgot to include:

My guess is the preliminary decision has been the € is the place to park value, at least in the short run, while things work themselves out.


Have epistemological model of Complex Information environments. Will Travel.

by ATinNM on Sat Nov 24th, 2007 at 05:21:05 PM EST
[ Parent ]
Thanks for the last--ya sorta stuck me up there-
but I'm really interested in all of this, so no real complaints. I don't know enough to comment usefully on a lot of it, but I learn.

Useful talking follows experience, the more experience the better. Talking that precedes experience is known as bullshit.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Sun Nov 25th, 2007 at 11:16:06 AM EST
[ Parent ]
Well, if I had any money I'd park it in the Norwegian Krone, the Rouble, or maybe the Kuwaiti Dinar.

Cos they got energy and the EU hasn't.

by ChrisCook (cojockathotmaildotcom) on Sun Nov 25th, 2007 at 06:31:01 PM EST
[ Parent ]
Maybe I'm thinking off base here, but I'd think that energy is no good unless you can sell it and to sell it, you need to buy a foreign currency. The Rouble might still be a good investment, though gold or the yen will be as good. Especially gold, it's always something people run to in a time of upheaval.
by nanne (zwaerdenmaecker@gmail.com) on Sun Nov 25th, 2007 at 07:56:02 PM EST
[ Parent ]
The currency in which you buy or sell energy is a purely transitory issue: it's what you do with the proceeds that matters. The fact is that the Krone, for instance, is essentially backed by all of that oil and gas, and the price of the Krone will therefore rise relative to other countries' currencies NOT backed by oil and gas, IMHO.
by ChrisCook (cojockathotmaildotcom) on Mon Nov 26th, 2007 at 05:55:22 AM EST
[ Parent ]
Some more idle speculation:

As I understand it a weaker dollar should make American exports cheaper. At the same time however imports get more expensive, plus world resource prices are going to go up and keep on going up. Japan and Europe have done a lot more than the US (or China and India for that matter) to make their industries resource and energy efficient. Maybe 'a lot' is an understatement. The US has a larger resource base than Europe or Japan, but its industry - what's left of it, anyway - still needs to import a lot of raw material.

This means that the competitive advantage the US industry will get from a weak dollar is not going to be as much as it was in the past. Might not be enough to stave off bankruptcy for one or two of Detroit's dinosaurs?

by nanne (zwaerdenmaecker@gmail.com) on Sat Nov 24th, 2007 at 06:38:32 PM EST
[ Parent ]
Can I float again the idea of pooling our dollar assets and buying inflation-index Euro bonds on dollar margin to meet our liabilities?

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Sat Nov 24th, 2007 at 07:06:02 PM EST
[ Parent ]
That's not a bad idea and if I had any dollar assets I'd sign-up.

Have epistemological model of Complex Information environments. Will Travel.
by ATinNM on Sun Nov 25th, 2007 at 01:17:13 AM EST
[ Parent ]
Would that not have been a better idea a few weeks or months ago? Is it perhaps a bit late?
You can have my bad-joke pension to play with if you want it, but a hundred more like me would be a fair start.

Useful talking follows experience, the more experience the better. Talking that precedes experience is known as bullshit.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Sun Nov 25th, 2007 at 11:19:35 AM EST
[ Parent ]
I think that I may have a better idea for dollar-holders involving real estate. I'm going to write a diary about it this coming week. Might apply broadly - that is, not just U.S.A.

paul spencer
by paul spencer (spencerinthegorge AT yahoo DOT com) on Sun Nov 25th, 2007 at 08:13:56 PM EST
[ Parent ]
Any company that based their long term business decisions on the relative value of the euro/dollar as it was 2 years ago is in deep trouble today.

Yep, seems to be the case of European flagship airbus:

Enders Rings Alarm Bells: Euro Strength Knocks Airbus Off Course - International - SPIEGEL ONLINE - News

Airbus is in trouble.
...
Even worse, Airbus earlier this year launched a restructuring program called "Power 8." The idea was to massively cut costs and stop the bleeding at the European plane manufacturer. The problem? Power 8 assumes an exchange rate of $1.35 to the euro.


The struggle of man against tyranny is the struggle of memory against forgetting.(Kundera)
by Elco B (elcob at scarlet dot be) on Sat Nov 24th, 2007 at 02:26:38 PM EST
[ Parent ]
Either they were stupid (as explained above, and hardly likely) or they had an agenda to move factories elsewhere anyway and this gives them a very good reason to.

I wonder why they continue selling planes in US Dollar and not in another currency or pool of currencies (yen, euro, ruble, live chicken, whatever).

A few oil exporting countries (some of which are airbus customers) have indicated their intention to switch from US $ to other currencies for oil so it seems quite simple to sell them the goods in the same way.

Le caoutchouc serait un matériau très précieux, n'était son élasticité qui le rend impropre à tant d'usages.- A.Allais

by armadillos (armadillo2024 (at) free (dotto) fr) on Mon Nov 26th, 2007 at 11:39:01 AM EST
[ Parent ]
A good limitation to the accumulation of "stuff" is a lack of physical space in which to put it  : )

Clearly the active encouragement of urban sprawl and acquisition of ever-bigger homes have been not-altogether innocent incentives to purchase more junk [houses, mortgages and stuff]. And from there ... the flimsier the junk is, the more often it needs to be replaced, the better the economy hums along, or so the story goes.

My question to ETers more knowledgeable than I is how we are to manage decreased consumer spending. Clearly, havoc will ensue if there is an abrupt drop-off in spending. Yet it seems that current downward trends in purchase-power are already hurting Anglo-American/EU economies as it is.

What do you suppose Western economies might do to prepare for, and accommodate, what is already being recognized by increasingly debt-ridden, strapped consumers as unsustainable levels of consumption?  

by Loefing on Sat Nov 24th, 2007 at 12:59:30 PM EST
My co-bloggers at our Walmart-specific site have been tracking the latest "black Friday". Many shoppers have posted videos of the chaos at the stores brought on by the chance of buying something you don't really need for a few dollars less than otherwise.

If you want to see some of the videos they have collected stop by at The Writing on the Wal

I keep writing about my attempts to live a "post-materialist" life style, it's good to see others taking up the same theme.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Sat Nov 24th, 2007 at 02:26:23 PM EST
And yet, Baruch Spinoza, the source of the radical arm of the Enlightenment, was a leading optician, involved in the manufacture of both spectacles and microscopes. Are these not items of "stuff"? At what point is "too much stuff" defined?

http://books.google.com/books?id=8nb0tpZvXBMC&pg=RA1-PA127&lpg=RA1-PA127&dq=spinoza+micr oscope&source=web&ots=iEJ2ejXVHC&sig=gK9gXJmprd1xauPLx4JZPZ_0WX8

by asdf on Sun Nov 25th, 2007 at 07:25:23 PM EST
Stuff was not God then, just stuff. Even if amazing stuff such as spectacles were rare.
by das monde on Mon Nov 26th, 2007 at 05:14:18 AM EST
[ Parent ]
But we all have this drive, and it's a dangerous handle attached to our souls.

very well put...  we all have a number of such dangerous handles attached to our souls.  and there is a highly trained cadre of experts who do nothing but study how to get a hold of those handles and crank them.  [damn those experts and all who sail in them.  they are as close to the Forces of Evil as I think we get in our petty little human story.]

I'm not really here, just taking a break from packing... and "packing" means, essentially, dealing with my Stuff :-(  and feeling plenty of delayed buyer's remorse, you betcha.  too tired and mentally fragmented to say anything clever... this is the point in the expatriation project where one wonders "Why am I doing this to myself?"  then one wakes up the next day and reads the latest headlines and thinks, "Oh yeah, to get out of this loonybin ASAP, now I remember."

less than 30 days to move date.  house is in escrow.  aieee.  don't expect much sense out of me for a couple of months.

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Mon Nov 26th, 2007 at 01:58:56 AM EST
you don't need to keep apologising for not making sense....lol!

cuz you do...

take care of yourself, de, and best of luck with your move, it sounds like a real pivot-point in your life.

vancouver is top of the list of places i never visited, but would love to....

the highest number of wild flowers in the world, i heard, more than 10,000 varieties...

it's great to see your head popping in every so often...

There are no blank spots on the map any more, anywhere on earth. You want a blank spot on the map, you gotta leave the map behind. Jon Krakauer

by melo (melometa4(at)gmail.com) on Mon Nov 26th, 2007 at 09:43:21 AM EST
[ Parent ]
You know you are doing the right thing, De, so treat yourself well and take it easy.  Thinking about you and sending energy, when I find it.

_Our knowledge has surpassed our wisdom. --Charu Saxena._
by metavision on Mon Nov 26th, 2007 at 12:36:01 PM EST
[ Parent ]
DeAnander:
this is the point in the expatriation project where one wonders "Why am I doing this to myself?"  then one wakes up the next day and reads the latest headlines and thinks, "Oh yeah, to get out of this loonybin ASAP, now I remember."
And then when you complete your expatriation you look at the latest headline at your destination and wonder "did I just get off the pan to fall on the fire?".

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Sun Dec 2nd, 2007 at 12:15:45 PM EST
[ Parent ]


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