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From the macroeconomic perspective of a net food and fuel importer with a trade deficit, "loss of access to the international currency markets" is functionally equivalent to "naval blockade."

That's what the defaulting governments need to prepare for. And that is what they have not done and will not do.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 11th, 2013 at 03:30:39 PM EST
[ Parent ]
There'll always be enough foreign currency available to import food and fuel for everyone, as long as there is a reasonable amount of equality or some kind of welfare state. Lot's of other imports will disappear before there is a physical lack of food and fuel.

Just look at Italy. The current account deficit has fallen a bit (IIRC), not due to greater exports, but due to falling imports. But people still afford food and fuel.

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

by Starvid on Mon Feb 11th, 2013 at 06:00:12 PM EST
[ Parent ]
as long as there is a reasonable amount of equality or some kind of welfare state

Which, under the current austerity policies, cannot be assured.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Tue Feb 12th, 2013 at 03:47:00 AM EST
[ Parent ]
The Irish experience of 1845-57 provides an instructive contrary case study.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 13th, 2013 at 02:15:49 PM EST
[ Parent ]
But the UK had no lack of foreign currency. And Ireland was a net exporter of food.

Great Famine (Ireland) - Wikipedia, the free encyclopedia

Cecil Woodham-Smith, an authority on the Irish Famine, wrote in The Great Hunger: Ireland 1845-1849 that no issue has provoked so much anger and embittered relations between England and Ireland as "the indisputable fact that huge quantities of food were exported from Ireland to England throughout the period when the people of Ireland were dying of starvation." Ireland remained a net exporter of food throughout most of the five-year famine.[fn 4]

Christine Kinealy writes that Irish exports of calves, livestock (except pigs), bacon and ham actually increased during the famine. The food was shipped under guard from the most famine-stricken parts of Ireland. However, the poor had no money to buy food and the government then did not ban exports.[66]

Ireland in that period is an example of what happens to a subordinate region that suffers a shock where the general population is denied the money to buy the basics, even the basics produced in their own region.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Wed Feb 13th, 2013 at 02:29:56 PM EST
[ Parent ]
But this is essentially the Spanish dynamic (and to some extent the Greek): Cash crops replace food crops. That the cash crops happened to be food meant that the Irish, had they had an independent government acting in the national interest, could have readily converted cash crop to food crop. Spain is not so fortunate.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 13th, 2013 at 03:11:23 PM EST
[ Parent ]
Jake:
That's what the defaulting governments need to prepare for. And that is what they have not done and will not do.

What is needed is a bloody minded opposition that can get into power, lie its ass off about how they are committed to paying all the while they are preparing to default. When they are prepared, (can get through the next winter), then do it and invite others in the same position to do the same thing. If it were any country the size of Greece or larger it would likely be game over for those supporting the current regime. They would be so busy dealing with their own domestic political consequences that they would have little time to be concerned about the defaulting country.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Feb 15th, 2013 at 01:04:21 AM EST
[ Parent ]
The problem with that is that by the time a sufficiently bloody-minded opposition gets into government, the required "lie their ass off" phase may well be longer than the political system can survive a pro-austerity government.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Feb 15th, 2013 at 01:56:52 PM EST
[ Parent ]

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