tag:blogger.com,1999:blog-3950127.post3655664273932612344..comments2009-12-10T22:56:20.130+01:00Comments on Euro Watch: The Long And Difficult Road To Wage Cuts As An Alternative To DevaluationUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-3950127.post-35086274175359184792009-01-20T07:59:00.000+01:002009-01-20T07:59:00.000+01:00Hi Elto,"Could anybody invent a more unfortunate c...Hi Elto,<BR/><BR/>"Could anybody invent a more unfortunate combination?"<BR/><BR/>Not really. This is all a very big mess now.<BR/><BR/>"And devaluation... how do you insure it is only you who devalues?"<BR/><BR/>Well quite. Everyone cannot devalue. The bigger boys have to stand there and take it like a man (if that doesn't sound excessively sexist). Some new emerging economies like India and Brazil could revalue over time, but this is too long term, and their current weight in global GDP too small for this to be of much assistance. And even they can't really revalue at this point.<BR/><BR/>But the four economies I have here - intentionally - are quite small open ones, so really if they could (3 of them can't really, although Latvia would be well advised to bolt and do a runner I think, despite the pain of breaking the peg) they should devalue, since again their weight in the whole situation is small.<BR/><BR/>For the rest, we need to find collective solutions, but again, these would seem to be some way off at this point, since people are still trying to put the fires out rather than discussing how to renew the trees and vegetation.Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-3950127.post-5734513238075737062009-01-20T04:10:00.000+01:002009-01-20T04:10:00.000+01:00The consequence of debt deflation is collapse, is ...The consequence of debt deflation is collapse, is it not?<BR/><BR/>Wage decreases are deflation, essentially, in their relationship to debt but are inflation in their relationship to asset prices. Could anybody invent a more unfortunate combination?<BR/><BR/>And devaluation... how do you insure it is only you who devalues?Anonymousnoreply@blogger.com