A key component of Iceland's recovery was its massive currency collapse. Hardly something mises.org nuts like to endorse
i believe Austrians support the solution of letting currencies find their own value without intervention and if that means bad news at least you can start rebuilding from the bottom. But anyway, who cares about ideologic stuff like that when Rome is burning right... An old Faber quote keeps coming to mind: "Intrest rates will go much higher then anyone believes today, these things move in long cycles and overshoot both to the upside as the downside... Something must give, either massive ECB intervention or massive capital restrictions... or both.... This is where you buy risk assets. Or short Bunds right... We are a day or 2 away from people paying Germany to accept their money.
Yes but it also shows that currency debasement can lead to recovery, something they are reluctant to accept
Daal, I believe the Austrian school has different interpretations and different representatives. Mises was no Rothbard and he was no Hayek. I would think a part of the school is hard core hard currency and another part is more anti intervention so a 2 floor building collapses rather then a 150 floor building collapses when everyone knew the flaws of the structure from the beginning. Personally I think currency debasement is inevitable regardless of the system in place. Concerning the second issue, I think some progress could be made modeling society to a less interventionist world both through laws as the glass steagall act as through simple policy but obviously something like just the business cycle alone would put massive pressure on it let alone other external factors. All in all they have their flaws just as the next school but one should be dumb to dismiss everything they say as pure gold bug ranting...
A question about Italy. Who on their right might would not buy newly issued Italian debt with a EU guarantee on the 20% of losses if there is ever an default?
Yes but shouldn't take too long for the countries to move in that direction if stock markets keep falling
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Big fan of Iceland and everything they've done since the crisis, including putting bankers in the clink. Screw the creditors, let the banks go, have a quick, brutal collapse, and then build something real from there. A living, breathing case study of anti-Geithnerism, anti-Bernankeism, anti-Lagardeism ... and it's working beautifully.