This fall in the rate msut ahve the SU scare to hell.. if the dolalr doe snot fall , tehre are no new jobs to be created in the internal competitive industry..

As de Long says.. yoa hve to move a lto of peopel from construction to "other" jobs.. if the dollar does nto fall, there are no other "new jobs" int he scale and amgnitude required...then it is great depression.. but really great depression...

if thsoe jobs exist and the governemnt provides the credit it will be a recession or tough recession...but if the jobs do not exist... big trouble..

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

Is that we'd be better off in the EMU. The krona is not seen as liquid enough so people are getting out of it, weakening the currency. On the other hand I hear there is great interest in buying Swedish treasuries. Weird.

Anyway, remember how I'd say I'd much rather buy Exxon debt than US debt? The CDS for 10 year US debt is higher than on 10 year Exxon debt now...

Peak oil is not an energy crisis. It is a liquid fuel crisis.

[Europe.Is.Doomed™ Alert]

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

As to the euro, I would not worry about its rate to the dollar in the short term...

God I hope you're right.  A couple of weeks ago I converted half my (meager) yen savings into euros, because the euro seemed to be bottoming out against the yen at around 150.  Now it's down to 140.

Truth unfolds in time through a communal process.

An interesting development is that official British thinking on how to handle the crisis is moving in a Scandinavian direction.  According to an article in today's FT, the Chancellor, Alastair Darling, and the BoE Governor, Mervyn King, are working on plans based upon the (rather successful) Swedish handling of their financial crisis back in the Nineties:

'The scheme, which has echoes of a similar operation by the Swedish government in the early 1990s, would be available to all banks. In exchange for the capital injection, taxpayers might be protected through preferred shares or warrants, giving them generous dividends in future.'

Of particular interest is an Op-Ed in the paper endorsing this kind of thinking by the Tory leader, David Cameron.  It concludes by explaining that he is today discussing the crisis with 'Carl Bildt, the Swedish prime minister who 15 years ago showed how a centre-right government can intervene decisively in a financial crisis while protecting the taxpayer.'

Obviously, and understandably, Cameron is covering his back against claims that he is abandoning pure free market principles.  Equally obviously, however, that is what he is doing.

As to the euro, I would not worry about its rate to the dollar in the short term: this is driven to a large extent by the fact that European banks do a lot of business in dollars, and are currently unable to borrow such dollars on the interbank market, and thus simply have to actually buy them, thus propping the dollar up.

Remember this?

Bloomberg: U.S. Fed Agrees to $30 Billion Swap With Four Central Banks (September 24)

The U.S. Federal Reserve agreed to channel $30 billion into the global financial system by opening currency swap lines with central banks in Norway, Sweden, Denmark and Australia.

The Fed set up the currency exchange to address ``elevated pressures'' in dollar funding in markets, the Board of Governors said today in a statement.

The U.S. is broadening its effort to revive confidence in markets as concern mounts that a $700 billion plan to rescue the banking system may face delays in Congress. The Fed last week expanded its swap lines with the European Central Bank and Swiss National Bank by $70 billion, and created $110 billion in new facilities with central banks in Japan, the U.K. and Canada.

Small countries such as Norway run their domestic interbank market in US dollars which is causing them no small headaches right now.


A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

When I was growing up, politics, finance etc. seemed like a lot of useless bullshit; areas for the idiots who were too lazy to work in factories and too stupid to become scientists, engineers, et al.

Guess what?  Given the events over the past 2 weeks, I'm proven right.  The bullshitters are destroying the Mighty Anglo Empires!  Take a bow (now get off stage.)

McCain/Palin ... total sacks of SHIT!

The Euro going down against the dollar is not a bad thing as it improves the competitiveness of European industry at the time it needs it most.

The big difference between Ireland oday and Ireland in the recession of the 1980's is that:

1.  We now have a Dept/GDP ration of 25% now versus 90% then, and

2.  We have the € which insulates us against enormous hedge fund speculation and other speculation which was going on against the IR£ at the time - resulting in 18% interest rates as the Government tried to shore up the currency at the cost of ruinous interest rates which helped to destroy the real economy.

The € may not be perfect, but it is a darn sight better than having a small national Currency (remember the UK£ when it fell out of the EMS) which can be speculated against and almost destroyed by the Global behemoths.(Or mismanaged as the Iceland financial sector was).

You betcha! (as Palin might say)

Vote McCain for war without gain

Ummm, how's sterling doing ?? {scared}

keep to the Fen Causeway

A pro Europe (ex) Tory comes out of the woodwork:

John Stevens: The UK will soon be forced to rethink joining the Eurozone | Comment is free | guardian.co.uk

How the Euro is gaining currency As the credit crunch bites harder, joining the Euro may prove not just economic wisdom but simple self-preservation for the UK All comments (0)

• • John Stevens
  • guardian.co.uk,
  • Monday October 06 2008 19:30 BST
  • Article history

If one wanted a definitive measure of the anti-European bias of our financial commentators, it has been the exaggerated reaction to present uncertainties over national government bank support schemes within the European Union. Of course, the current competitive bailouts are highly undesirable, as the reaction of the markets has shown. They should and will, doubtless, be replaced by a more coherent and coordinated approach, not least as a result of the fallout we have seen. There is no alternative to this.

The Euro is not doomed! Are the euroskeptics claiming that if it hadn't been adopted then there wouldn't be any economic crisis? That doesn't make sense. Whether they were using francs, or marks, or euros, European banks would still have made the mistake of tying themselves to closely to corporate America, and made the same foolish investment and financial decisions. The UK didn't adopt the Euro, but they don't seem any better off that those that did. Maybe even worse. Sorry, but non-Euro countries are doing just as badly.

The rise in the dollar is temporary. The value of any currency ultimately depends on the credibility of the government issuing it, and the credibility of the US government is shot (speaking as an American). These people simply don't know what they're doing and it's more than obvious to people all around the world. And Obama leading the effort to ram through the bailout bill has destroyed any hopes that the Democrats will manage the economy any better. No, the dollar is toast. And the Fed is printing money as fast as it can, which is undermining whatever credibility is left. The EU nations certainly have problems, but nothing compared to those of the US, which are extremely major and which will be very long-lasting.