John Fitzgerald ESRI : we're at the mercy of the USA

Starts hopeful but woah!

The USA is bankrupt FFS, and earlier in the week we had evidence that N the velocity of money there has dropped below 1. The US recession is getting worse and has a long, long way to run yet, and with N<1 all the Fed’s helicopter drops are only making the situation even worse. Hah! Serves 'em right, really. There’s the next wave of Alt-A and Option-ARM mortgage chaos still to come, the bond market bubble collapse, still plenty of asset writedowns ahead…and this clown thinks/hopes the USA is going to be in any position to ride to our rescue in a few months time?

What a moron. Is this the best the ESRI can come up with, a load of anaemic grovelling waffle, a load of servile crawling on the floor sucking his thumb and crying for Mutha?

Grow a spine, John, and get off your knees you peasant.

The angry man says most of it.

I’ll add - given unbalanced deficit spending between the US and the eurozone (and by extension the EU), a more likely outcome is that the US devalues its currency to a level where it rebuilds competitiveness, then it starts to build a recovery. With Ireland looking to sell goods and services into a dollar world economy, our uncompetitive domestic costs will leave us frozen out of this recovery.

It’s deflate and europe or deflate a lot and US/the world in my book.

The government should be offerring free adult education classes in the major (and minor) european languages, a free translation service for business ordering and selling, and help with european laws, tax rates and business rules, IMO. This risks of it going badly (or just slowly) wrong in the US are too high.

Good ideas. We are farrrr to anglocentric.

Meh. English is the language of international business. I know it’s a cliche, but it’s true.

For example, I am going to a conference in March. Although the % of native English speakers at the conference will be, I’d guess, no more than 5%, it specifically states the language the conference will be conducted in will be English.

The supply of education is a finite resource. It’s science and engineering upskilling we should focus on more so than languages, IMO.

Where can I information on US velocity of money statistics?

Try to sell plants in english in Denmark. See how far that will get you. English is the language of science and finance. But the local language is the language in which you try as an SME to sell. And we are crap at languages.

any of hte federal reserve banks… … 30_378.png

Indeed, and try to sell IT services into a SME in the rest of europe.

Or more particularly, try to buy anything from a producer (rather than from a big aggregator who already has his huge cut included).

Having lived through the tail end of the last severe recession, mid 80’s, and seen two other recessions 1991,2001, from start to finish in the US I’d have to say that so far things have been pretty much par for the course. The real pain kicks in later on in the year and the roller coaster will be fairly gut wrenching over the next 18 months but by this stage the path is pretty much set. Lots of kicking and screaming and gnashing of teeth, something the American chattering classes are very good at, but no big bust. It looked like pure 1931 for a while last years but the economy tottered away from the edge of that particular precipice by mid-December.

Ireland, the UK and Germany on the other hand are looking at various degrees of catastrophe. If you want to be really scared shit-less just look at the news coming out of Germany the last few weeks. Comparisons with 1947. I reckon that 2Q 2009 in Germany is going to be even scarier than the collapse of the UK banking system last year.

Remember, the US really is different. When you own the reserve currency the rules really dont apply to you. There will be bloody murder fighting over entitlement programs and the deficit will go up and then down, but that is pretty much business as usual. Those of us who remember the 1970’s have seen this all before.

Be interested to hear you expand on the Germany point jmc - news has been bad but I don’t see anything scarier than another bloody tough recession for Germany yet.

here are some links…,1518,585324,00.html,1518,598207,00.html

The worst is yet to come because neither Merkel or Steinbruck get it. Merkel is pure small town hausfrau, Steinbruck shoots off his mouth and then has to quickly retract and Glos is, well, Glos. Its so scary because two of the three biggest economies in europe are governed by complete incompetents.

You know you are in real trouble when someone like Sarkozy is the only one who gets it. is the only voice of prudence and sanity.

Funny 'cos it’s true. :slight_smile:

hi jmc

I think u raised 2 interesting points

Ireland, the UK and Germany on the other hand are looking at various degrees of catastrophe

how could the germans be in the same bracket as the economic bums of europe who spent all their money on whiskey and beer?


*Remember, the US really is different. When you own the reserve currency the rules really dont apply to you. *

I think the US has finally lost its reserve currency status. Nearly all the problems in the Euro financial system are because of loans to bankrupt america. This is only going to get worse when the mortgage rates are reset on the "prime " mortgages. And Obama is going to tackle the downturn by printing 8 days a week, its adios to the US$ in 2009. The question is whether the eCB wil follow the yanks to oblivion or allow the € to appreciate to US2- US$3 and more in 2010-11

So far. Think global. Think EU27. Think Latin America. Follow the money home.

Fear not, for on January 20th a Messiah shall appear among the people…

That’s not correct.

I would disagree with you on several points but the key one is that there is no currency to replace the dollar, unlike after Bretton Woods when the dollar replaced sterling.

Although a somewhat indirect explanation read the mechanics of inflation exportation in the following…

…to see why the major US creditor nations will not be dumping the dollar anytime soon. And they are the ones that matter.

Those Central Banks who dabbled with euro substitution during the last year were so badly burnt by short term F/X movements that I dont see that experiment being repeated any time soon.

What about Asia? We should focus on building indigenous companies with world-beating products and services in their niche, they you can market EVERYWHERE.