Ok, so now that we've got an aligned frame of reference, might I then ask you: Who does the current Fed strategy of dollar debasement help, and who do you believe it hurts? Similarly, if Germany were to allow the ECB to pursue a similar policy, who would he help and hurt?
Of course you are correct - as we all know, there has been NO recession or depression anywhere in the world before those evil central bankers emerged from the loins of satan.
Sarcasm aside that's closer to the truth than you understand, obviously. (You just told me that you really don't know anything... you just have an uninformed, emotional opinion. What bother posting such bilge? Somebody is just going to call you on it.) Hey... recessions weren't that big of a deal... except to politicians... until our long history of patching them over and magnifying future consequences.
I'm afraid I'm not the one arguing with 'emotions'. It's hard to imagine what logic led you to believe to the various Panics of the 19th century 'weren't that big of a deal'. But, alas, I reread of your original post and realized the out you left your self there: it's hard to refute that there would not be recessions if it weren't for governments - for the simple reason that I don't think anyone can recall a single instance in written history where there wasn't some sort government in any nontrivial economy.
Well, I don't see a strategy of Fed dollar debasement. What I do see is the mkt pricing the likely loss of the reserve ccy status by the USD, as the world starts refusing to fund the US current account deficit. Moreover, your very own Congress has given the Fed a particular mandate. If the people and their democratic government were concerned about the weakness of their ccy, why not make this an explicit part of the Fed mandate? Given that it's not the case, I don't see why the Fed shouldn't consider the weakness of the ccy a palatable side effect that results from them discharging their headline mandate. As to the group of people it hurts the most, I am pretty sure you have it right. As to the Eurozone, I am pretty sure the idea is spread the love, i.e. hurt Germany and help the periphery.
I wasn't "leaving myself an out".. it's a fact! Significant economic problems are almost always caused by governments and bankers.... not including natural disasters like famine and flooding, of course. It's not that a "government is in a nontrivial economy"... it's what they DO that messes things up. (And what they DO.. Bottom Line.. is to try to "get something for nothing"... NEVER works in the long run.)
I read about KFW debt 2 month ago on an italian newspaper, maybe someone got tired of being lectured by germans and their tricks. I not an accounting expert, but IMHO this is the part of ESA95 we are interested in: http://epp.eurostat.ec.europa.eu/cache/ITY_SDDS/Annexes/naga_a_esms_an1.pdf page 96: 2. Treatment in national accounts and rationale of the treatment 1. General case: enterpriseâs debt a. the government guarantee is not called The general principle is that a guaranteed liability is that of the issuer (debtor), as long as the latter does not call the guarantee. In the national accounts, the liability is recorded solely in the enterprise balance sheet. For the government, it is a contingent liability (ESA95, §5.05). It should not be taken into account in the calculation of government debt. In this general case, national accounts can rely on the legal and accounting aspects. The delineation of government and enterprises sector is strictly defined. It should be recalled that, as far as the national accounts and the excessive deficit procedure are concerned, government debt refers only to the government sector (S.13) and not to the public sector. .... So if you add 428 billion euros of state guaranteed KFW debt to German debt, german debt/GDP is a nice 97,4%
And that principle applies to public companies that cover more than 50% of their costs with market revenues and not with taxes. So I have to correct myself: that's not greek bookkeeping... that's Lehman bookkeeping Do rating agencies know this, or are they playing tricks too ?
I'll preface by saying that my own personal politics lean towards liberalism (though I'm not bat sht insane and believe in certain compromises given that we live with other people around us) - I say that because I want to point that I actually pose the following question with some sympathy to your views: Let me ask you: in your view, has there ever been a single form of government that hasn't caused a giant mess? I suspect you will say no - and again, I'm very sympathetic to that - but shouldn't that point out that perhaps, economic crisis is more ingrained in either natural law or human nature than can be simply scapegoated to some minority malicious actors, be them bankers, aristocrats, or technocrats?