Mish's Global Economic Trend Analysis

---

• Another Preposterous Proposal to "Fix the Unfixable"; Political, Economic, and Mathematical Realities
• Ron Paul on Jay Leno: His Best Video Ever; Paul Soars into the Lead in Iowa Polls; Paul Passes Gingrich in New Hampshire!
• European Unemployment Rates Suggest Pressure Cooker Will Soon Blow Sky High; UK Rejects Additional Money to IMF, Sweden Wants "Conditions"
• Thatcher's Last Stand Against Socialism: Humorous Video on the Euro, European Politics, and Wealth Creation

Another Preposterous Proposal to "Fix the Unfixable"; Political, Economic, and Mathematical Realities Posted: 19 Dec 2011 10:51 PM PST The devalue-your-way to prosperity proponents are out in full force in spite of the mathematical silliness of it all. Three writers of the Wall Street Journal article Weak Currency Stands to Buoy Zone Exports propose Europe is in the midst of a "weak recession" and a falling Euro will help exporters. Weak recession? We will see about that. At the top of the "beggar-thy-neighbor", weak-currency devaluation list is Martin Feldstein who writing on the Financial Times specifically proposes A weak euro is the way forward. The Way Forward - Not Feldstein believes "The key is to expand the net exports of those trade deficit countries to the world outside the eurozone." Yet at the same time Feldstein readily admits "The politicians who planned the euro, generally did not think about future current account imbalances or other economic problems. They wanted the euro as a means of accelerating political integration." Moreover, Feldstein specifically notes "Productivity in Germany rose much faster than it did in Italy, Spain and France. Germany also placed limits on wage growth. Those two factors mean that labour costs in Germany's tradable sector have risen some 30 per cent less since the start of the euro than labour costs and prices in those countries with slower productivity growth." Proposal to Fix the Unfixable Devaluing the Euro cannot and will not fix those structural problems. In essence Feldstein wants to fix a problem that is not fixable.The amazing thing is Feldstein nonetheless wants to try anyway with proposals he knows full well cannot work. Put Feldsetein in the can-kicking group with this admission: "A decline of the euro cannot be a permanent solution to differences in productivity trends within the eurozone. But it would give those countries time to improve productivity growth before the euro's fundamental strength returns." Can the Euro Be Saved? Given that the Euro is fundamentally flawed, even if it could be saved, why should it be saved? At what cost? To whom? Feldstein does not specifically address any of those questions, although does wonder how much the Euro needs to fall. Wondering how far the Euro needs to decline to "save the euro" is akin to wondering how many peanuts elephants need to eat before one can launch a rocket ship to the moon. Ironically, Feldstein concludes "If those relative improvements in productivity do not happen, there may be no choice but to end the eurozone as we know it today." Why Don't We Start There? Getting Greece, Spain, Portugal productivity up to the standards of Germany is NOT going to happen while all those countries are on the same currency with the same interest rate (and probably not under any circumstances at all). While currency devaluation may in theory help one country in isolation, it cannot save the global economy or  Europe as an entity. Feldstein should know that, and I suspect he does. Unfortunately, he refuses to go down the only path that makes political and economic sense. This is after all, not only about economics, but also about political realities. Political and Economic Realities The political and economic reality is the Euro has failed. It was fundamentally flawed from the beginning.  Politics suggests it is too late to start over. Germany will not go along, and in my opinion, for excellent reasons. So, instead of attempting to fix the unfixable, why not work on the best plan to break up the Eurozone? Mathematical Realities Not every country can run a current account surplus. Yet, every country wants to. On May 19, 2011, Paul Krugman Praised a Weaker US Dollar. What's driving the turnaround in our manufacturing trade? The main answer is that the U.S. dollar has fallen against other currencies, helping give U.S.-based manufacturing a cost advantage. A weaker dollar, it turns out, was just what U.S. industry needed. Yet the Federal Reserve finds itself under intense pressure from the right to make the dollar stronger, not weaker. Mathematical Impossibilities  Krugman and the Fed want a weak Dollar Feldstein and European countries want a weak Euro Switzerland wants a weak Swiss Franc Japan wants a weak Yen China wants a weak Yuan Can someone, anyone, tell me how that is supposed to work? Magically it's supposed to. Yet, mathematically its impossible in relation to each. However, it is possible in relation to another currency: gold. Amazingly, not even Nouriel Roubini can figure that out, which prompted my article Dear Nouriel Roubini: The Fundamental Case for Gold Has Not Changed; To Understand, All Roubini Need Do is Look in a Mirror. Here's the deal: If the Euro slips, the dollar must by definition rise. If dollar exports then drop, the Fed may respond with QE3 and Japan may sell the Yen. Note the extreme silliness of the circular proposals to weaken everything, yet the writers cannot even see it. It's a sad testament to the absurd grip Keynesian and Monetarist theory has on academia, Nobel prize economists, and in general economic writers most places you look. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Ron Paul on Jay Leno: His Best Video Ever; Paul Soars into the Lead in Iowa Polls; Paul Passes Gingrich in New Hampshire! Posted: 19 Dec 2011 04:16 PM PST Many people have serious misconceptions about who Ron Paul is and what he stands for. In a riveting video on the Jay Leno show, to a wildly enthusiastic audience, Ron Paul explains his position on numerous subjects. Link if video does not play: Ron Paul on Tonight Show with Jay Leno Ron Paul Soars Into Lead in Latest Iowa Poll I am extremely pleased to report Paul takes lead as Gingrich collapses in Iowa Newt Gingrich's campaign is rapidly imploding, and Ron Paul has now taken the lead in Iowa. He's at 23% to 20% for Mitt Romney, 14% for Gingrich, 10% each for Rick Santorum, Michele Bachmann, and Rick Perry, 4% for Jon Huntsman, and 2% for Gary Johnson. Gingrich has now seen a big drop in his Iowa standing two weeks in a row. His share of the vote has gone from 27% to 22% to 14%. And there's been a large drop in his personal favorability numbers as well from +31 (62/31) to +12 (52/40) to now -1 (46/47). Negative ads over the last few weeks have really chipped away at Gingrich's image as being a strong conservative- now only 36% of voters believe that he has 'strong principles,' while 43% think he does not. PPP Poll Results Ron Paul eclipses Newt Gingrich in latest New Hampshire PPP poll As pleasing as the Iowa caucus poll is, the latest New Hampshire poll is an absolute stunner. Please consider Ron Paul eclipses Newt Gingrich in latest New Hampshire PPP poll Congressman Ron Paul (R-TX), a candidate for the Republican presidential nomination, continues his streak of strong poll finishes. Mr. Paul eclipsed former House Speaker Newt Gingrich in the latest Public Policy Polling poll of likely New Hampshire Republican Presidential Primary voters released Monday. Mr. Paul pulled in 19 percent of the votes to best Mr. Gingrich, who garnered 17 percent of the votes. Former Massachusetts Governor Mitt Romney, who has always been the front-runner in New Hampshire, finished in first place with 35 percent of the votes. Mr. Paul can also celebrate two other recent poll victories. Mr. Paul won both an Insider Advantage and Public Policy Polling poll of likely Iowa GOP caucusgoers Monday. Mr. Paul bested Mr. Romney by 3 percentage points in the PPP poll and by 6 percentage points in the Insider Advantage poll. The Iowa poll victories represent the first time that Mr. Paul has led in Iowa since he launched his campaign in May. With Mr. Paul in the lead in Iowa, Mr. Gingrich's campaign appears to be gasping for air. As it stands now, Mr. Paul has a healthy chance at a top-tier finish in Iowa and New Hampshire and growing chance of finishing first in Iowa and second in New Hampshire. How You Can Help  It is a sad state of affairs when more are concerned about the latest Hollywood gossip than an extremely important presidential election. That you are reading this post to this point suggests you are different. Do not be afraid to discuss politics and why you support Ron Paul. Please forward this post or the Jay Leno video to your friends and have them watch it. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

European Unemployment Rates Suggest Pressure Cooker Will Soon Blow Sky High; UK Rejects Additional Money to IMF, Sweden Wants "Conditions" Posted: 19 Dec 2011 11:17 AM PST In spite of what you hear by the nanny-zone Eurocrats, the rifts keep getting wider and the odds the Merkozy agreement gets tossed to the dogs rises every day. Today the UK put a nail in the coffin of more money to the IMF and Sweden may do so as well. Please consider Euro zone IMF lending plan in danger as UK declines European finance ministers looked unlikely to reach a target of boosting IMF resources by 200 billion euros to ward off the debt crisis on Monday, after Britain said it would not take part in a plan aimed specifically at helping the euro zone. In a three-hour conference call, ministers also assessed plans for tighter euro zone fiscal rules - a new 'fiscal compact' - that policymakers hope will insulate the 17-country currency zone against a repeat of the two-year debt crisis. Treasury sources said Britain had made it clear on the call it would not participate in the plan to increase IMF resources by up to 200 billion euros, with 150 billion of coming from euro zone central banks. While Sweden said it would take part, with conditions, Britain's decision to stay on the sidelines means it is unlikely the headline goal will be reached. Ministers had set an informal deadline of Monday to arrive at the 200 billion figure, which was agreed by EU leaders at a summit on December 8-9. Speaking during testimony to the European Parliament, ECB President Mario Draghi praised EU efforts to forge a new 'fiscal compact' as a solid base for responding to the crisis, and called the euro an "irreversible" project. Finland's opposition, if not overcome, could scupper efforts to bring the ESM into force in July 2012, a year earlier than planned, to step up crisis-fighting efforts. While EU leaders agreed at their last summit on the desire to boost IMF resources, there are doubts about whether the scheme will work, with not just Britain unenthusiastic, but the United States and Germany's Bundesbank too. "Washington cannot make bilateral loans available to the IMF without Congress approving it," German Finance Minister Wolfgang Schaeuble told German radio. "There's no chance of that and the American government has always made that clear." Market response to measures agreed at the December summit has been cool, mainly because of the reluctance of the ECB to step up bond purchases and declare its readiness to do so. As a result, ratings agency Fitch concluded on Friday that a 'comprehensive solution' to the crisis was technically and politically beyond reach. It warned that six euro zone economies, including Italy and Spain, could be hit with credit downgrades in the near future. Standard & Poor's has said it could soon downgrade nearly all the euro zone's 17 members. A declaration from the ECB that it would buy unlimited amounts of euro zone bonds for as long as necessary would immediately calm markets, but would probably break EU law and would relax pressure on politicians to reform their economies. "The ECB simply can't and won't say that, and it's very unreasonable to even expect it," one euro zone official said. Instead, the bank was likely to keep quietly buying enough Spanish and Italian bonds to keep both countries on the market but with financing costs sufficiently high to keep pressure on their lawmakers to pursue tough reforms. "This is the most expensive approach, also not likely to work in the longer run, but still it is the only one possible," the euro zone official said. Euro zone leaders agreed on December 9 to write into national constitutions a rule that budgets have to be balanced or in surplus in structural terms. If they are not, automatic corrective measures would follow. Such rules would sharply limit government borrowing, bring down debt and, euro zone politicians hope, help restore market trust in the sustainability of public finances. Pressure Cooker Will Soon Blow Sky High European nations that sign the Merkozy treaty will be locked into austerity programs with falling GDP and rising unemployment rate every step of the way. The IMF tightening the screws on Greece every month will surely not help any. European Unemployment Rates Note the unemployment rate is 22.8% in Spain and 18.3% in Greece. Combined with additional austerity measures, high-and-rising unemployment rates across Europe ensures the lid on the European pressure cooker will soon blow sky high. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Thatcher's Last Stand Against Socialism: Humorous Video on the Euro, European Politics, and Wealth Creation Posted: 19 Dec 2011 08:55 AM PST Please consider this humorous video of Margaret Thatcher's last House of Commons Speech on November 22, 1990. What Thatcher said then about the Euro, European politics, socialism and wealth creation makes as much sense today as it did then, when she made fools of the opposition in Parliament to much laughter from the conservatives. Here is a link if the video does not play: Thatcher's Last Stand Against Socialism The video is quite funny, please play it. The complete Transcript of Thatcher's Last Stand is well worth a read as well. Here are some pertinent snips on Eurozone, not all of which is in the above video. Mr. Alan Beith (Berwick-upon-Tweed) Will the Prime Minister tell us whether she intends to continue her personal fight against a single currency and an independent central bank when she leaves office? Mr. Dennis Skinner (Bolsover) No. She is going to be the [central bank] governor. [Laughter.] The Prime Minister What a good idea. I had not thought of that. But if I were, there would be no European central bank accountable to no one, least of all national Parliaments. The point of that kind of Europe with a central bank is no democracy, taking powers away from every single Parliament, and having a single currency, a monetary policy and interest rates which take all political power away from us. As my right hon. Friend the Member for Blaby (Mr. Lawson ) said in his first speech after the proposal for a single currency was made, a single currency is about the politics of Europe, it is about a federal Europe by the back door. So I shall consider the proposal of the hon. Member for Bolsover (Mr. Skinner). Now where were we? I am enjoying this. Mr. Michael Carttiss (Great Yarmouth) Cancel it. You can wipe the floor with these people. The Prime Minister Yes, indeed—I was talking about Europe and the socialist ideal of Europe. Not for us the corporatism, socialism and central control. We leave those to the Opposition. Ours is a larger vision of a Community whose member states co-operate with one another more and more closely to the benefit of all. Are we then to be censured for standing up for a free and open Britain in a free and open Europe? No. Our policies are in tune with the deepest instincts of the British people. We shall win the censure motion, so we shall not be censured for what is thoroughly right. What Thatcher said about the Euro being a "back door" mechanism for transformation of Europe into a socialist nanny state was stunningly correct. Hopefully, prime minister David Cameron will see the light and stand to to the EU and its attempt to extort another £25bn from the UK. For details, please see EU Leaders Endlessly Play "Ring-Around-the-Rosie"; Finance Ministers Seek IMF Funding Deal; EU demands £25bn lifeline from the UK. Indeed, rules have gotten so crazy in regards to agricultural policy and other rules, that Cameron should put exiting the EU to a popular vote. UK Should Exit the EU Why should UK citizens pay through the nose for inane trade regulations especially on agricultural goods? The UK needs to send a statement that it has had enough. If France wants protectionist agricultural policies then France, not the UK should suffer the consequences. Those who do not know what I am talking about can find a nice example in UK facing £20m garlic tax bill The UK Government has received a European Commission ultimatum to hand over £20 million within two months or face legal action. The wrangle is over the fact that import tariffs on frozen garlic from outside the EU are lower than the rates for fresh garlic. And, according to the Commission, UK authorities carelessly levied the lower rate applicable to frozen garlic on imports of the fresh product from China, in breach of EU customs rules. A Commission statement explained: "Between 2005 and 2006, the UK customs authorities allowed imports of fresh garlic from the People's Republic of China under wrong authorising documents. They have erroneously stated that the goods imported were frozen garlic for which significantly lower import duties apply. Why Put Up With This? The EU has inane agricultural policies, inane trade policies and tariffs, and absurd rules on labeling bottled water, for example EU Bans Claim "Drinking Water Can Prevent Dehydration". Previously, EU officials banned the selling of overly bent bananas and curved cucumbers but backed off after international ridicule. Expect more such stupidity if a European Nanny-Zone forms. What does the UK get for these endless regulations other than higher prices and direct subsidies to French farmers? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

You are subscribed to email updates from Mish's Global Economic Trend Analysis To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610

Damn Cool Pics

---

25 Funniest Lost And Found Signs - Part 2 Posted: 19 Dec 2011 02:13 PM PST Has trolling spilled over into the world of "lost and found" flyers? If these signs are signs of the times, it seems so. Don't take our word for it though; click through this list of hilarious lost signs and start thinking up your own ideas. 30 Funniest Lost And Found Signs - Part 1

The Untold Story Of The Rise In Ammunition Prices [infographic] Posted: 19 Dec 2011 01:49 PM PST More Americans are buying ammunition and guns than ever before. Are the same trends that are prompting ordinary Americans to buy gold also prompting them to stock up on guns and ammo? More Infographics. Click on Image to Enlarge. Source: ammo.net

You are subscribed to email updates from Damn Cool Pictures To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610

Seth Godin's Blog on marketing, tribes and respect : No need to update your settings!

You recently got my blog post about subscriptions.

Of course, you ALREADY have a subscription.

No need to do anything. Nothing is going to change. Sorry to confuse.

 

Seth

---

Click here to safely unsubscribe from "Seth Godin's Blog on marketing, tribes and respect." Click here to view mailing archives, here to change your preferences, or here to subscribe

---

---

Your requested content delivery powered by FeedBlitz, LLC, 9 Thoreau Way, Sudbury, MA 01776, USA. +1.978.776.9498

 

Seth's Blog : Subscription update

Subscription update

You can get this blog every day, mostly for free. Here are some options:

Certainly the easiest for some is to subscribe via Twitter by following @ThisIsSethsBlog . Many people find this simple, but the challenge is that your Twitter feed might be so active you miss some posts.

Another approach is via email. This is pretty direct though you may discover that somewhere between you and me, a spam filter that neither of us can control shows up. If you use the email option, be sure to hit the confirmation link you get in the email, and don't choose "Tweets you share with your followers" unless that's what you really want.

Some people prefer to follow the feed on facebook.

You can also get this on your Kindle, but that costs money, not a penny of which goes to me. But hey, if it works for you, go for it.

My favorite way to read blogs is with an RSS reader, of which there are many. I use NewsFire on my Mac. The beauties are many: You can read lots of blogs in a little time, there's no noise, no spam and no misdelivery. You can shortcut to add it here, or once you install your reader, just paste this link into it: http://feeds.feedburner.com/typepad/sethsmainblog

And of course, you can always bookmark this page on your browser and come visit me now and then.

I started the grandfather of this blog in 1991 (not a typo) with an email newsletter. Some of you were on that original list, twenty years ago. In this incarnation, there have been more than 4,300 posts... It's been a good run so far, I think--this blog regularly reaches over a million people. Thanks, guys (old and new), for your frequent attention and kind support.

 

• Email to a friend •

More Recent Articles

• No one ever bought anything in an elevator
• The difference between a failure and a mistake
• The simple first rule of branding and marketing anything (even yourself)
• On buying something for the first time
• Santa and the mob

[You're getting this note because you subscribed to Seth Godin's blog.]

Don't want to get this email anymore? Click the link below to unsubscribe.

---

Click here to safely unsubscribe from "Seth's Blog." Click here to view mailing archives, here to change your preferences, or here to subscribe

---

 

---

Your requested content delivery powered by FeedBlitz, LLC, 9 Thoreau Way, Sudbury, MA 01776, USA. +1.978.776.9498