26-07-2002 08:10									#31
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quote: Originally posted by Colon South Korea did what the IMF asked it to do, even if they pretend otherwise, so did Malaysia. (even with those high profile currency controls that actually were quite meaningless) and I'd say both are doing rather well nowadays.

SK isn't exactly doing well. It isn't doing bad considering the Asian Economic Turmoil struck it pretty hard. Daewoo was completely wiped out IIRC.

As for Malasysia, again my impression is it's not doing bad but not exactly well either. Then again I do not exactly keep a tab on it

	26-07-2002 08:13									#32
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quote: Originally posted by Lord Merciless I don't understand the fuss about our trade deficit: we are getting the goods and services from other countries, while we just print out bunch papers in exchange. What's so bad about other countries regarding our papers as so valuable?

When you owe other people money, they will come collect the debt sooner or later. How do you think Japanese companies owning a whole bunch of US companies? Think Sony in particular.

	26-07-2002 08:44									#33
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quote: They protest against their own government because it had been doing what the IMF told it to do. They protest now to stop it from continuing to follow the IMF.

IMF must die!!!

	26-07-2002 08:52									#34
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quote: I don't know exactly how much copper and aluminum trade for but they're priced in cents per ton, not dollars per ounce

No they aren't. Copper sells at just under a dollar a pound (canadian). Hi-quality aluminum is even more expensive, IIRC...

	26-07-2002 09:11									#35
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The good thing about gold, in particular, is that it is rare. Using a common metal for barter would bring about a Hitchhiker's Guide to the Galaxy-type society in which they land on a planet and decide that leaves should be the currency, therefore everyone is rich. Actually, that is much like the fiat money system - paper becomes valuable just because, it isn't based on anything rare enough to hold true value.

Diamonds would be another good measure of worth, I think, and silver less so.

Everyone went off the gold standard for one reason, when it comes down to it - to give the government more control over the economy. You can bring up any example you want, and that's what it comes down to.

However, a government controlling the economy is a bad idea, because economics is a force of its own that doesn't need to be controlled by an entity. When a government tries to interfere with the economy, they usually end up messing it up. Government interference, for example, brought about the Great Depression, and the devaluation of the German Mark for another example.

Paper money is OK, as long as it is based on something - it can represent gold, for example, as long as the gold exists, and the paper money can be converted into gold if desired.

Sure, deficit spending would go away, but why is this a bad thing?

*waits patiently for Wraith to show up and explain far better than I did*

	26-07-2002 09:20									#36
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Gold is also malleable, doesn't tarnish, compact, easily recognizable, and makes pretty pretty jewelry.

	26-07-2002 09:32									#37
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Exactly.

But in my non-expert opinion, what makes it most valuable in terms of usefullness for currency is its relative rarity, combined with the fact that it is safe to handle, unlike something such as uranium.

	26-07-2002 09:35									#38
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The problem with something like diamonds is that they're quantized. You can't break off a chunk to pay for breakfast...

Anyhow, it's not completely about rarity; it's also about extraction costs (how much labour goes into getting an ounce of gold). These combine to put a floor on the realtive value of gold to other goods...

	26-07-2002 09:47									#39
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quote: The problem with something like diamonds is that they're quantized. You can't break off a chunk to pay for breakfast...

Oh, I know that, gold is much better.

quote: Anyhow, it's not completely about rarity; it's also about extraction costs (how much labour goes into getting an ounce of gold). These combine to put a floor on the realtive value of gold to other goods...

True as well. But what I'm getting it is the difference between gold and, for example, iron. Gold is much rarer, and hence a much better indicator of wealth and value than iron.

	26-07-2002 09:55									#40
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Even if iron was rare, it wouldn't hold it's value. Why?

It rusts

	26-07-2002 09:58									#41
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Good point.

Bah! Just accept my point the way it was intended and don't nitpick dammit!

	26-07-2002 10:01									#42
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If national debt was bad, then so is a mortgage. Ever tried saving up for a house? By the time you save enough, the house costs triple. By the time you save the difference, it's tripled again! The U.S. economy won't collapse until it is perceived to be unable to pay it's debts.

Australia recently had higher debt per capita than the U.S, yet turned it around. As long as they don't print money that isn't accounted for, i think they'll be okay

	26-07-2002 10:02									#43
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quote: Originally posted by David Floyd Bah! Just accept my point the way it was intended and don't nitpick dammit!

(pick...pick...pick...pick...pick.....)

	26-07-2002 10:09									#44
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quote: Originally posted by Serb IMF must die!!!

This from someone whose country relies big time on IMF money....

	26-07-2002 10:12									#45
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Although the IMF should, indeed, die.

This from someone whose country dispenses huge amounts of IMF money. Damn those handout seeking countries like Russia!

	26-07-2002 10:51									#46
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quote: Originally posted by Colon South Korea did what the IMF asked it to do, even if they pretend otherwise, so did Malaysia.

They were doing quite well before, also. They got that way by following an economic policy completely opposite of what the IMF orders, heavy government involvement in the economy. Since the monetary collapse, one can't really say they're doing as well as they used to do, but at least they aren't collapsing.

	26-07-2002 10:53									#47
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Aluminum was worth mucho dinero at the turn of the century...more than gold, IIRC.

I will probably buy a couple thousand silver coins at some point. Not because of the economy. I've just always wanted a chest of silver. And gold. And emeralds, rubies, sapphires...

	26-07-2002 10:54									#48
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Gold's not so rare as it used to be. It's still $300+ to the ounce, but it has been for about 20 years. It keeps dropping in value. Gold's not a good investment.

Go to Ghana to buy your gold, the country is dripping in it. Buy your silver in Mexico, and buy sapphires in Sri Lanka. Diamonds and emeralds are very tightly controled, but Ithink you can get rubies at a good price in SouthEast Asia.

	26-07-2002 12:12									#49
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"If national debt was bad, then so is a mortgage."

You're confusing a couple things. First there is government debt, and the private sector debt. Foreign debt is part of both. Then, the US does not invest the 400-500 billion it borrows from the rest of the world each year, but uses it for a consumption binge and malinvestment.

So the proper analogy is not a mortgage, but a consumer credit spent on junk food.



Ever tried saving up for a house? By the time you save enough, the house costs triple. By the time you save the difference, it's tripled again! The U.S. economy won't collapse until it is perceived to be unable to pay it's debts.

	26-07-2002 12:16									#50
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quote: Originally posted by chegitz guevara ... heavy government involvement in the economy...

Well what the IMF suggests is a mix of policies - with a good deal of stupid policies in it. As for SK, I think the jury is still out there. Are companies still selling at a loss ? Are unproductive companies still kept afloat ?

More interesting is that Mahathir was right about the capital controls.....

	26-07-2002 13:17									#51
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quote: Originally posted by Shi Huangdi This from someone whose country relies big time on IMF money....

This from someone whose national economy was almost destroyed when we followed IMF "advises". And when we finnaly said "Thank you dear freinds, we apreciate for your help, but please f*ck off and leave us alone" our economy started to grow. It's a miracle I guess.
I'll say it again, if you don't mind:

IMF must die!!!

	26-07-2002 13:29									#52
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quote: Originally posted by David Floyd Although the IMF should, indeed, die.

WTF??? Are you trying to tell that YOU agreed with ME?

quote: This from someone whose country dispenses huge amounts of IMF money. Damn those handout seeking countries like Russia!

This from someone whose country is the main sponsor of IMF- ( International Marauder Found??? International Mother F*ckers??? ).- a bunch of rogues who devastate foreign economies. Damn those greedy, hypocritical countries like USA!

	26-07-2002 13:30									#53
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quote: Originally posted by chegitz guevara Well, it's not as if Argentina really had any choice. They kept doing what the IMF told them to do, and things kept getting worse. Finally they had to balk because if they pushed any further, their people would revolt, and they did.

The IMF told them to cut expenditures, but their populist state governments refused. Now no one wants their currency because they made it almost worthless by printing money rather than creating wealth. This is what you get when you combine widespread economic ignorance with a widespread sense of entitlement and a political class that would rather demagogue than lead.

Their revolt looks like a temper tantrum in it's sophistication. Argentines are sure someone stole their money, but very few are willing to admit that much of the problem was running up a bunch of debt through citizen approved government overspending, and then refusing to reduce their level of consumption in order to pay off that debt. Now no one in their right mind is going to lend them money, and they are experiencing serious cash flow problems. Well Duh.

	26-07-2002 13:31									#54
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Well the IMF approach to privatization in Russia was about as stupid as a bunch of Chicago boys can get.

And that's damn ****in' stupid.

	26-07-2002 13:33									#55
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"The IMF told them to cut expenditures, but their populist state governments refused."

It's stupid to cut spending in a recession.

"Now no one wants their currency because they made it almost worthless by printing money rather than creating wealth."

No, that is the result of the unsustainable dollar peg initiated by the IMF and heavily supported by the US under the dollarization bravado.

	26-07-2002 13:34									#56
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quote: Originally posted by Frogger The problem with something like diamonds is that they're quantized. You can't break off a chunk to pay for breakfast... Anyhow, it's not completely about rarity; it's also about extraction costs (how much labour goes into getting an ounce of gold). These combine to put a floor on the realtive value of gold to other goods...

So true. Gold isn't really that rare, there are tons of it within a few miles of my home, but you'd have to level a couple of mountains to extract it.

	26-07-2002 13:44									#57
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quote: Originally posted by Roland "The IMF told them to cut expenditures, but their populist state governments refused." It's stupid to cut spending in a recession.

Which would have been worse, cutting spending during this recession or undergoing the meltdown that Argentina is currently?

quote: Originally posted by Roland "Now no one wants their currency because they made it almost worthless by printing money rather than creating wealth." No, that is the result of the unsustainable dollar peg initiated by the IMF and heavily supported by the US under the dollarization bravado.

Good point, though the situation was caused by the same thing either way, an inability or refusal to hold the line to prevent a shortfall. I agree that currency pegs are really guidelines at best, and they are all bound to end sooner or later. It's rare and difficult for two states to move in economic tandem enough to keep the relative values of their currencies identical. Argentina had to float the currency eventually, but by the time they did there was a lot of movement needed to achieve a new balance.

	26-07-2002 13:53									#58
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Argentina overconsumed compared to what it should have done under the dollar peg, but the peg still simply meant massive misallocations. As Alan's bubble drove the dollar up argentinian exports suffered along.

"Which would have been worse, cutting spending during this recession or undergoing the meltdown that Argentina is currently?"

They should have let the Peso or Argentino or whatever float much earlier. But spending cuts when your entire economy falls apart only drives it down further.

	26-07-2002 17:26									#59
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The IMF recommended the government to cut the salaries 13%, they did it, they recommended the government to increase taxes, they did it.
The objective was to reduce the deficit to two thirds of it.
All this was recommended in 1999, when the Argentinean economy was recovering from the South East Asia, Russian crisis 1997-1998.
The economy was growing in 1999, the recession started when receipes of the IMF were applied.
With the recession the deficit became even higher, because there was less economical activity, and so on less money in taxes were payd to the state.

Argentina never had a big debt (more than 3 billions) until the the military coup of the late 70s early 80s.
In 1983 when democracy returned we had a debt of 45 billions mostly military expence.
12 billions of the budget, (40 billions) are to pay the debt.And all the new credits the government received were to pay the debt, not to finance my education or something.
Without the debt, the argentinean budget has superavit.

	26-07-2002 19:19									#60
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The IMF was mixed for skorea, actually.

quote: SK isn't exactly doing well. It isn't doing bad considering the Asian Economic Turmoil struck it pretty hard. Daewoo was completely wiped out IIRC.

skorea was the only one to pay off its IMF loan in its entirety and early-- kinda like chrysler, no?--but soon after the bailout, several skorean companies found that they hadn't truly done the reforms: among the biggest to be hit were the chaebol Hyundai and Daewoo.

Hyundai got better-- split itself into multiple independent companies (Hynix (which is dangerously insolvent, so much so that it's in talks with Micron for a sale), Hyundai Motor (spectacular growth), Hyundai Group (shrinking, with some of its larger divisions gone)), and so has survived. Daewoo was pretty much Korea's Enron. it's gone-- Daewoo Motor is now part of GM, Daewoo Electronics absorbed by Samsung (this was actually pre-2000, though, Daewoo Financial is a joke, etc.)

so the IMF's reforms didn't truly help right away, even though skorea was the only one to truly go all out in trying to make them.

it turns out, however, that some of the IMF reforms did help-- some companies, like Samsung, capitalized on them and mangaed to grow and be much more successful afterwards. Samsung Electronics is second in brand recognition to Sony in the states, and has caught up or surpassed even Sony in many areas in terms of technology and quality.
Another company that's done exceptionally well is LG . with agreements with Sprint PCS and ownership of Zenith, LG's been increasing market awareness (albeit, not as successfully as Samsung), and has actually done remarkably well in the telecommunications sector.

but i digress.

the IMF reforms didn't help right away, and at best, have only slightly helped the east asian countries.
even so, skorea is doing quite well, actually-- it's the only other asian country expected to grow this year outside of china.