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Jacques René Giguère
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How do we count debt? A province or city sign a long term contract with a private operator. Is that a debt? Do we substract the "value" of service rendered while we don't do it if the service is provided directly? Or do we coun,t the value of the borrowing/equity needed by the private contractor? Debt might be a metaphysical concept. Can we use it as a policy objective or an intrument? Musing from an humble IO guy,
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TMF: the costs of the bankruptcy of a bank debtor are shifter to shareholders, depositors, employees and so on. Classic pass-through analysis.
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Determinant: He was my student...
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Avon: she is a wonderful girl. But outside whatever is relevant to her kindergarden class ( where she is marvelous) and interior decorating she is totally clueless about anything and everything. I also at that time to one of my party member who told me that he voted NPD because our MP was a "bad MP". I told him "You've known that for 10 years and you know the new one will be even worse." He said "...." (I am looking for the proper emoji....)
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Avon: a former girlfriend of mine, unversity graduate, never read a newspaper political news and never listened to any tv news. When I asked her why she voted for Jack Layton in 2011, her answer was direct and simple :"I don't know.".
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Frances: The snow is of february texture.And there are no crocus here even in summer...
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Avon: with constant macro instability, regular large scale bank failures, machine-gunning of the workers, poisonous milk and meat and infant mortality that would not be tolerated in modern Afghanistan.There is a reason why the unwashed masses asked for change...And massive free land stolen from the Indians with the necessary genocide, though nobody much cared. As an aside, my family doubling its income from 1955 to 1970 was not bad either.
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Avon: why limit ourselves to illimited funding of parties? Let's cut the middleman out and buy the politicians directly, as was done throughout history. With the guillotine every 200 years.
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TMF: central banks don't need equity. They are not bank. They were but no longer are.They evolved out of them when the biggest ones acted in the spirit of salus populi suprema lex esto. They issue money out of thin air. Turtles all the way down. Tha't the beauty of it. Some CB, like Switzerland still don't understand. The Swiss are beginning to pay for that ununderstanding.
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Nick:"Jacques Rene: that is roughly how I would describe it too (minus the bit about cronies!). But do we really want to nationalise the whole banking system?" Nationalize the loan-allocating system? Maybe not,though comparing the effect of the Chinese crony system with the New-York-London bonus industry isn't that clear...Too many people working overtime to make deals.There is something for 9-5 civil service work ethic. Anyway,do not confuse payment system and credit system. Even though we have unfortunately conflated the two.
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Nick: my students all use debit cards (old guys like me use credit cards). When they buy something at the dépanneur, the account between them and the dep is settled by their respective "banks" moving their balances at the BoC through the Canadian Payments Association. Both students and dep owner have an account at the Boc. That one account is called BMO and the other BN is merely a) a political device so we don't have a "communist monopoly bank" like Cuba and b) a convenient way to pay some crony $20M as "bank president" instead of $ 200K as assistant deputy minister in the Banking Ministry. Musing of a humble IO guy.
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Bob: it's the beginning of a beautiful friendship. Is there some nazis we can take care of?
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I am canadian. That Ben thinks so well of the supine CBC made me realise how low the BBC must have sunk in my absence...
Toggle Commented Mar 17, 2015 on Media deference at Stumbling and Mumbling
Boothe is a righty. He may have apolitical agenda but think as an economist. ANd the whole point is not about economic efficiency or even cutting taxes. It's about getting votes. Tounderstand boutique tax credit you need the age old marketing maxim :"I want YOU in the Army", "This Bud's for YOU!" "Darling it's OUR song". He may have shark eyes but politically Harper is a crooner: look the girl in the eyes while you sing.
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Frances: why are you talking about this in terms of economics? Whether it economically work or not, it's beside the point. It's rewarding the base. Making it refundable even though those who need the refundability don't have the means to enroll their children simply feed the aspirational side of the poorest. "If I coulsd have enroll my child, I would have received the credit. Praise to our great emir Stephen bin Harperovitch." As long as the recipient think it has value, it's ok. Soldiers die for a piece of metal on their chest for having defended defending the honor of a piece of cloth.
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Nick: the unemployed may pan for gold at low cost (untrue given the troble of getting to the Yukon but still). Bitcoin mining is not not for the ordinary unemployed and is costly. But gold and bitcoin are (bad pun alert) bit player. But there is no way you can mine euro. At least as long as The Amazing Merkel and Her Ordoliberal Circus play at Brussels-Frankfurt auditorium. Tickets are limited and payable only in Golden Delicious apples. Available from Wolfgand Schaüble after he has spread the orchard with Agent Orange. (God, how I enjoy mixing my metaphors with bad sarcasm.)
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If you have to dig phones to get them into circulation, you're into a gold standard-bitcoin-euro model. So gold-bitcoin-euro are not money. (musing of an humble IO guy.)
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Timlagor: about a month ago, I found myself in a restaurant in QUébec City, where I had gone last spring during another trip. In the middle of the meal, I realized I had ordered the exact same things as the last time. Creature of habit or rationnally making the same choice when faced with the same options? As for the Far Side, two I remember is the one where the female pooddle's father ask the dog "So you work in the security department of a metal recycling firm?" and the one with the female monkey asking her husband about the blond hair. Hope the long lnk work...) He sent Goodall the original as an apology and she was delighted... https://www.google.ca/search?q=the+far+side+jane+goodall&espv=2&biw=909&bih=582&tbm=isch&imgil=YEPwSMwOfFchUM%253A%253BdCaGvmFzh_QVHM%253Bhttp%25253A%25252F%25252Fideonexus.com%25252F2011%25252F09%25252F19%25252Fcelebrating-the-uns-international-day-of-peace-with-dr-jane-goodall%25252F&source=iu&pf=m&fir=YEPwSMwOfFchUM%253A%252CdCaGvmFzh_QVHM%252C_&usg=__6a3sJ-L0399RAdxvnF5mLjgAppE%3D&ved=0CCwQyjc&ei=2i4HVbDGM7CBsQSmhoH4AQ#imgrc=YEPwSMwOfFchUM%253A%3BdCaGvmFzh_QVHM%3Bhttp%253A%252F%252Fideonexus.com%252Fwp-content%252Fuploads%252F2011%252F09%252FJaneGoodallFarSide.gif%3Bhttp%253A%252F%252Fideonexus.com%252F2011%252F09%252F19%252Fcelebrating-the-uns-international-day-of-peace-with-dr-jane-goodall%252F%3B386%3B509
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rsj: given that Current account must equal-Capital account, Chinese and Russians oligarchs must run a current surplus if they want to stash the loot abroad. NAFTA and the like are our enablers to that scheme.
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Oliver: "And / or whose wages could not drop any further without the trade off becoming one of joining the informal / illegal sector or emigrating instead. Neither of which can possibly be a macroeconomic goal." Isn't that the model Germany has in mind for Greece?
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My own take of what people think about "just price" is something about LRAC. Hence the widespread hostility to surge pricing in case of emergencies.
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Since the information about the future labor market is unknown and in fact unknowable, on what basis will the insurers offer their contracts? Otherwise, it would be gambling, contrary to the Insurance and Gambling Act 1772, whose principles survived the test of times for good reasons...
Min: but those countries had to buy US goods.So the circuit is closed.Otherwise the Saudis are paid in monkey currency. So a competent CB should merely print money and give it to the oil producers. They didn't because the were concerned about "fighting inflation." They didn't understood that, at least temporarily, it was a real increase in the price of oil, a real not a monetary phenomenon. They raised interest rates, compounding the problem. Adjustment problems arise however: 1) the mechanism isn't instantaneous. When the US consumers reduce their buying of let's say housing, there is a time lag before the Saudis order jet fighters. 2) the PSST is disturbed. People employed in the "housing" industry are not immediately and may not be forever employable and employed in the jet fighters sector. Hope it's ok but busy and writing fast...
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Max, Nick: "Imports are real benefits and exports are real costs. Trade deficits directly improve our standard of living." (temporarily till you repay by a current account surplus he should add.) Like Nick, it's one thing that I try to make my students understand. Not esy to make them understanfd that a CA surplus is not "agood thing" but a debt payment...They listen too much to the commentariat. It doesn't help when sometimes, StatCan get a GDP number out and add "this will be revised downward as Import data will be available". This mlead them to think that imports are bad. Business students are taught that exports pay for imports, which is true in the financial sense, not the economic sense.Anyone who reads european sources will always see references about "the need to earn foreigh exchange" or "dollar shortage " of the 40's-70's. The more advanced may read about "those imports are ok because they are investment goods". No. Importing consumption goods are ok if they liberate resources for your own production of investment goods. It's the investment as such that is ok. Germany do not understand how their "proof-of-their-virtuous-and-behavior" current account surplus is detrimental to their living standard. I always tell students the fallacy of the "oil (or whatever)imports cost us $X billions, money that could stay here and create jobs instead of abroad." Making them understand that foreign goods are a gift (especially if you pay with your own fiat money) goes again their common sense and what they hear politicians and journos say daily. I also tell them the day I finally truly understood that. It was during an International Economics cours. For years I had been going through the motions of comparative advantages. One day, I had a flash during the class. I finally saw how imports save you the ressources necessary for exports. They thought I was having a kind of seizure...
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Jamie:" it is the production of the capital that is most important. Otherwise there is nothing to move around but whatever we can find lying around. That's the problem for pensioners. If no-one is producing pizza then pensioners can't eat pizza no matter how much they have invested or saved for their retirement." Years ago, there was serious discussion in Québec about woman staying home accumulating credit toward the RRQ system (equivalent to CPP). It was shot down by femisit claiming that it would be bad for women. In the meanwhile, fertility is co0ntinuing to crash and so are the vialbility of pension plans, whatever the actuaries might say.
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