What did the head of the IMF mean when she recently said that we could soon see conditions " reminiscent of th?
Thursday, January 9, 2014
, Posted by Ryanita at 4:59 PM
laelaf
What did the head of the IMF
mean when she recently said
that we could soon see
conditions " reminiscent of the
1930s depression
"?
Answer
But what was unsaid was 'there is no IMF' then in 1930s. The Brettonwood twins, World Bank & IMF were the results of the exertions from the likes of, the famous John Maynard Keynes, after WWII (1945). It may be to straighten up the War funding that was and to provide funds for the War shattered Europe's reconstruction. Perhaps she (the IMF chief) saw this aspect and struck by it.
Now the scenario is different but. The tune is different. The whole affair is not confined to Europe alone or both coasts of North Atlantic. It is all encompassing. The financial Centre of Gravity is shifting east, to be coterminous with the population centre of garvity. That (shifting) is very legit. While the west is sinking at rates of 0 to 2% growth, BRICS maintains 7 to 9%; that too in a year of depression (that means if there is no depression it would be around 10%). It implies that the East is bearing the load of West too, to some extent. What is unique about Eastern economies (though not everyone) is that each has a huge domestic market that can be made immune form the global vicissitudes if desired. But the big economies particularly India & China don't want to go back into their shells having tasted the export driven growth.
IMF though called as a fund is a bank that preys upon sinking economies (now Greece) in the eyes of some. Mme.Lagarde is cosying up with the bankers of the East (Eastern business ladies proved their mettle even in the West) for IMF is a bank. She can hope to siphon funds idling and parked looking for custom, to service PIGS (or is it PIIGS?), becasue sooner Europe would be sucked dry.
The Eastern banks aim at funding their industrialisation and propping up stocks & shares. For them it has become difficult and even risky to attract hot money, that has for startegic reasons migrated to the West now. Though there are many strategic sites they fear to tread for resons best known to them. One is self-intrest. Every country wants to prop up its own industry even if it is not doing well; or prop up its own currency though it is buffetted in the Forex markets. But the same applies to this part of the world. Herein comes the role of IMF to fecilitate it.
In this whole scenario and when the commodity market is booming, I wonder why some of these Eastern economies don't 'revalue' their currencies (upward) to leverage more prosperity for their producers of the primary products. WTO can't object to that. The need of the hour is for the West to devalue their currencies that they wouldn't, given an option. The East's currency revaluation though appears unconventional closes such option for the West. Plus, it is the modern day Mantra that the currency should find its own level. But that is impliedly in a fair environment. We all know that there is no fairness (West's devaluing would be that). It is desirable for the East too, to buy West's technology (there is a rightful hunger for it now) that would become a wee bit affordable then. If the West hikes up its technology's cost then the East would (should) retaliate by hiking up its commodity prices (via currency revaluation). In India it wouldn't be inderstood since theye are yet to come out of the shibboleths like 'make the currency cheap to export more' without realising that there is a limit to every thing. At least the upvalued Rupee would ease if not offset the Petroleum bill (in a similar situation China would furiously dig more wells for petroleum).
But what was unsaid was 'there is no IMF' then in 1930s. The Brettonwood twins, World Bank & IMF were the results of the exertions from the likes of, the famous John Maynard Keynes, after WWII (1945). It may be to straighten up the War funding that was and to provide funds for the War shattered Europe's reconstruction. Perhaps she (the IMF chief) saw this aspect and struck by it.
Now the scenario is different but. The tune is different. The whole affair is not confined to Europe alone or both coasts of North Atlantic. It is all encompassing. The financial Centre of Gravity is shifting east, to be coterminous with the population centre of garvity. That (shifting) is very legit. While the west is sinking at rates of 0 to 2% growth, BRICS maintains 7 to 9%; that too in a year of depression (that means if there is no depression it would be around 10%). It implies that the East is bearing the load of West too, to some extent. What is unique about Eastern economies (though not everyone) is that each has a huge domestic market that can be made immune form the global vicissitudes if desired. But the big economies particularly India & China don't want to go back into their shells having tasted the export driven growth.
IMF though called as a fund is a bank that preys upon sinking economies (now Greece) in the eyes of some. Mme.Lagarde is cosying up with the bankers of the East (Eastern business ladies proved their mettle even in the West) for IMF is a bank. She can hope to siphon funds idling and parked looking for custom, to service PIGS (or is it PIIGS?), becasue sooner Europe would be sucked dry.
The Eastern banks aim at funding their industrialisation and propping up stocks & shares. For them it has become difficult and even risky to attract hot money, that has for startegic reasons migrated to the West now. Though there are many strategic sites they fear to tread for resons best known to them. One is self-intrest. Every country wants to prop up its own industry even if it is not doing well; or prop up its own currency though it is buffetted in the Forex markets. But the same applies to this part of the world. Herein comes the role of IMF to fecilitate it.
In this whole scenario and when the commodity market is booming, I wonder why some of these Eastern economies don't 'revalue' their currencies (upward) to leverage more prosperity for their producers of the primary products. WTO can't object to that. The need of the hour is for the West to devalue their currencies that they wouldn't, given an option. The East's currency revaluation though appears unconventional closes such option for the West. Plus, it is the modern day Mantra that the currency should find its own level. But that is impliedly in a fair environment. We all know that there is no fairness (West's devaluing would be that). It is desirable for the East too, to buy West's technology (there is a rightful hunger for it now) that would become a wee bit affordable then. If the West hikes up its technology's cost then the East would (should) retaliate by hiking up its commodity prices (via currency revaluation). In India it wouldn't be inderstood since theye are yet to come out of the shibboleths like 'make the currency cheap to export more' without realising that there is a limit to every thing. At least the upvalued Rupee would ease if not offset the Petroleum bill (in a similar situation China would furiously dig more wells for petroleum).
Can a Currency Trader legally obtain the foreign money they had traded for in coin form and cross the border?
Tradamus
A Currency Trader is a person whom buys foreign currency as an investment hoping the price will change so the trader makes profit when the trader trades back currency again.
A Currency Trader is completely legal and the trading process is usually done electronically and not physically because it is quick and easier than collecting the trade physically.
My question is if being a Currency Trader, can i legally obtain my foreign money in 'coin' form (because the metal is reliable compared to an electronic number) and then cross the border back to the United States with the traded coins.
For example-
Lets say that I want to trade $1,000 USD for Canadian Currency but i want physical Nickels instead of electronic numbers.
I think that it sounds reasonable because a trade is a trade, and shouldn't matter if i want to spend the extra gas collecting the extra weight of $1000 worth of Canadian Nickels to take home or not.
Serious answers please. Thank you.
Answer
Yes, of course you can.
But - why would you?
Coins are subject to the same rules as paper money - "The government has made a promise to..."
The paper itself is worth NOTHING and a coin, of any valuation, even the Canadian toonie ($ 2.00) by itself may carry the metal value of one to two cents. There is no silver or gold in any coins in the world these days.
Coins are bulky and heavy. It costs a lot of money to ship coins about. Would it surprise you to know that it has been statistically proven that the vast majority of coins hardly ever, in their lifetime leave the city they were issued in. They just go round and round between your stores and the local bank office.
Any one is free to buy any foreign currency (up to $ 10,000 without filing a police report) and carry them around, or put them under any mattress as you see fit.
A problem is that you pay more, get a worse exchange rate, when dealing with paper money. All currency trading is done in computers, even if you change between to accounts in your own bank.
A Canadian nickel weighs 2.35 g. 4,000 nickels would weigh 9.4 kg (20.7 lbs) It contains 96 % steel, a little bit of nickel, zink and copper plating. With a total scrap value at 0.27 c/lb, you would have carried $ 5.27 worth of metal over the border.
Don't even think of trading in currencies. The sum of the GDP of the entire world is traded every 24 h, at the speed of the fastest computers mankind can design and build.
Are you better than that? To get the really, really scary facts, read this from NASDAC
http://www.nasdaq.com/investing/forex/how-a-24-hour-trading-market-joe.aspx
Yes, of course you can.
But - why would you?
Coins are subject to the same rules as paper money - "The government has made a promise to..."
The paper itself is worth NOTHING and a coin, of any valuation, even the Canadian toonie ($ 2.00) by itself may carry the metal value of one to two cents. There is no silver or gold in any coins in the world these days.
Coins are bulky and heavy. It costs a lot of money to ship coins about. Would it surprise you to know that it has been statistically proven that the vast majority of coins hardly ever, in their lifetime leave the city they were issued in. They just go round and round between your stores and the local bank office.
Any one is free to buy any foreign currency (up to $ 10,000 without filing a police report) and carry them around, or put them under any mattress as you see fit.
A problem is that you pay more, get a worse exchange rate, when dealing with paper money. All currency trading is done in computers, even if you change between to accounts in your own bank.
A Canadian nickel weighs 2.35 g. 4,000 nickels would weigh 9.4 kg (20.7 lbs) It contains 96 % steel, a little bit of nickel, zink and copper plating. With a total scrap value at 0.27 c/lb, you would have carried $ 5.27 worth of metal over the border.
Don't even think of trading in currencies. The sum of the GDP of the entire world is traded every 24 h, at the speed of the fastest computers mankind can design and build.
Are you better than that? To get the really, really scary facts, read this from NASDAC
http://www.nasdaq.com/investing/forex/how-a-24-hour-trading-market-joe.aspx
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