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Sweden is one of the most forceful supporters of free trade (which is only natural when trade is 50% of your GDP), so claiming we have a protected domestic market is quite rich. Norway, however, has. At least when it comes to agricultural products. The current butter deficit in Norway has resulted in considerable butter smuggling from Sweden, with black market prices of butter topping €150 per kg (yes, really). :)

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Dec 14th, 2011 at 10:33:38 AM EST
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Sweden is one of the most forceful supporters of free trade (which is only natural when trade is 50% of your GDP), so claiming we have a protected domestic market is quite rich.

Floating currencies is a way to generate a protected domestic market.

Or, to be a bit more technical, by allowing the exchange rate to be the buffer variable that ensures balance of the foreign accounts, you obtain the Keynesian advantages of a closed economy and the Ricardian advantages of an open economy. At the same time.

(This is not a free lunch - it fucks over internationally active banks by subjecting them to exchange rate risk. But Hayek is the only one who cries for internationally active banks.)

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Dec 14th, 2011 at 10:38:20 AM EST
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Oh come on. You can't argue that having a currency of your own is protectionism. Protectionism is quotas, tariffs, subsidies for domestic suppliers or discriminatory regulations for foreign suppliers, and so on.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Dec 14th, 2011 at 10:45:04 AM EST
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Take a look at China's currency policy and tell me again that currency policy does not create a protected market.

The Chinese case is an extreme one, because they target a surplus rather than balanced foreign accounts. But the basic mechanics are not so different at all.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Dec 14th, 2011 at 11:23:24 AM EST
[ Parent ]
The Chinese have a fixed currency, the opposite of a floating currency. So I don't see how that makes a floating currency protectionism. Rather the opposite.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Dec 14th, 2011 at 11:26:38 AM EST
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