This subject scares the heck out of me!

[chequita guevara]

Originally posted by Colon
South Korea did what the IMF asked it to do, even if they pretend otherwise, so did Malaysia.

They were doing quite well before, also. They got that way by following an economic policy completely opposite of what the IMF orders, heavy government involvement in the economy. Since the monetary collapse, one can't really say they're doing as well as they used to do, but at least they aren't collapsing.

[The Mad Monk]

Aluminum was worth mucho dinero at the turn of the century...more than gold, IIRC.

I will probably buy a couple thousand silver coins at some point. Not because of the economy. I've just always wanted a chest of silver. And gold. And emeralds, rubies, sapphires...

[chequita guevara]

Gold's not so rare as it used to be. It's still $300+ to the ounce, but it has been for about 20 years. It keeps dropping in value. Gold's not a good investment.

Go to Ghana to buy your gold, the country is dripping in it. Buy your silver in Mexico, and buy sapphires in Sri Lanka. Diamonds and emeralds are very tightly controled, but Ithink you can get rubies at a good price in SouthEast Asia.

[Roland]

"If national debt was bad, then so is a mortgage."

You're confusing a couple things. First there is government debt, and the private sector debt. Foreign debt is part of both. Then, the US does not invest the 400-500 billion it borrows from the rest of the world each year, but uses it for a consumption binge and malinvestment.

So the proper analogy is not a mortgage, but a consumer credit spent on junk food.



Ever tried saving up for a house? By the time you save enough, the house costs triple. By the time you save the difference, it's tripled again! The U.S. economy won't collapse until it is perceived to be unable to pay it's debts.

[Roland]

Originally posted by chegitz guevara

... heavy government involvement in the economy...

Well what the IMF suggests is a mix of policies - with a good deal of stupid policies in it. As for SK, I think the jury is still out there. Are companies still selling at a loss ? Are unproductive companies still kept afloat ?

More interesting is that Mahathir was right about the capital controls.....

[Serb]

Originally posted by Shi Huangdi




This from someone whose country relies big time on IMF money....

This from someone whose national economy was almost destroyed when we followed IMF "advises". And when we finnaly said "Thank you dear freinds, we apreciate for your help, but please f*ck off and leave us alone" our economy started to grow. It's a miracle I guess.
I'll say it again, if you don't mind:

IMF must die!!!

[Serb]

Originally posted by David Floyd
Although the IMF should, indeed, die.

WTF??? Are you trying to tell that YOU agreed with ME?

This from someone whose country dispenses huge amounts of IMF money. Damn those handout seeking countries like Russia!

This from someone whose country is the main sponsor of IMF- ( International Marauder Found??? International Mother F*ckers??? ).- a bunch of rogues who devastate foreign economies. Damn those greedy, hypocritical countries like USA!

[Sikander]

Originally posted by chegitz guevara
Well, it's not as if Argentina really had any choice. They kept doing what the IMF told them to do, and things kept getting worse. Finally they had to balk because if they pushed any further, their people would revolt, and they did.

The IMF told them to cut expenditures, but their populist state governments refused. Now no one wants their currency because they made it almost worthless by printing money rather than creating wealth. This is what you get when you combine widespread economic ignorance with a widespread sense of entitlement and a political class that would rather demagogue than lead.

Their revolt looks like a temper tantrum in it's sophistication. Argentines are sure someone stole their money, but very few are willing to admit that much of the problem was running up a bunch of debt through citizen approved government overspending, and then refusing to reduce their level of consumption in order to pay off that debt. Now no one in their right mind is going to lend them money, and they are experiencing serious cash flow problems. Well Duh.

[Roland]

Well the IMF approach to privatization in Russia was about as stupid as a bunch of Chicago boys can get.

And that's damn ****in' stupid.

[Roland]

"The IMF told them to cut expenditures, but their populist state governments refused."

It's stupid to cut spending in a recession.

"Now no one wants their currency because they made it almost worthless by printing money rather than creating wealth."

No, that is the result of the unsustainable dollar peg initiated by the IMF and heavily supported by the US under the dollarization bravado.

[Sikander]

Originally posted by Frogger
The problem with something like diamonds is that they're quantized. You can't break off a chunk to pay for breakfast...

Anyhow, it's not completely about rarity; it's also about extraction costs (how much labour goes into getting an ounce of gold). These combine to put a floor on the realtive value of gold to other goods...

So true. Gold isn't really that rare, there are tons of it within a few miles of my home, but you'd have to level a couple of mountains to extract it.

[Sikander]

Originally posted by Roland
"The IMF told them to cut expenditures, but their populist state governments refused."

It's stupid to cut spending in a recession.

Which would have been worse, cutting spending during this recession or undergoing the meltdown that Argentina is currently?

Originally posted by Roland
"Now no one wants their currency because they made it almost worthless by printing money rather than creating wealth."

No, that is the result of the unsustainable dollar peg initiated by the IMF and heavily supported by the US under the dollarization bravado.

Good point, though the situation was caused by the same thing either way, an inability or refusal to hold the line to prevent a shortfall. I agree that currency pegs are really guidelines at best, and they are all bound to end sooner or later. It's rare and difficult for two states to move in economic tandem enough to keep the relative values of their currencies identical. Argentina had to float the currency eventually, but by the time they did there was a lot of movement needed to achieve a new balance.

[Roland]

Argentina overconsumed compared to what it should have done under the dollar peg, but the peg still simply meant massive misallocations. As Alan's bubble drove the dollar up argentinian exports suffered along.

"Which would have been worse, cutting spending during this recession or undergoing the meltdown that Argentina is currently?"

They should have let the Peso or Argentino or whatever float much earlier. But spending cuts when your entire economy falls apart only drives it down further.

[Plan Austral]

The IMF recommended the government to cut the salaries 13%, they did it, they recommended the government to increase taxes, they did it.
The objective was to reduce the deficit to two thirds of it.
All this was recommended in 1999, when the Argentinean economy was recovering from the South East Asia, Russian crisis 1997-1998.
The economy was growing in 1999, the recession started when receipes of the IMF were applied.
With the recession the deficit became even higher, because there was less economical activity, and so on less money in taxes were payd to the state.

Argentina never had a big debt (more than 3 billions) until the the military coup of the late 70s early 80s.
In 1983 when democracy returned we had a debt of 45 billions mostly military expence.
12 billions of the budget, (40 billions) are to pay the debt.And all the new credits the government received were to pay the debt, not to finance my education or something.
Without the debt, the argentinean budget has superavit.

[Q Classic]

The IMF was mixed for skorea, actually.

SK isn't exactly doing well. It isn't doing bad considering the Asian Economic Turmoil struck it pretty hard. Daewoo was completely wiped out IIRC.

skorea was the only one to pay off its IMF loan in its entirety and early-- kinda like chrysler, no?--but soon after the bailout, several skorean companies found that they hadn't truly done the reforms: among the biggest to be hit were the chaebol Hyundai and Daewoo.

Hyundai got better-- split itself into multiple independent companies (Hynix (which is dangerously insolvent, so much so that it's in talks with Micron for a sale), Hyundai Motor (spectacular growth), Hyundai Group (shrinking, with some of its larger divisions gone)), and so has survived. Daewoo was pretty much Korea's Enron. it's gone-- Daewoo Motor is now part of GM, Daewoo Electronics absorbed by Samsung (this was actually pre-2000, though, Daewoo Financial is a joke, etc.)

so the IMF's reforms didn't truly help right away, even though skorea was the only one to truly go all out in trying to make them.

it turns out, however, that some of the IMF reforms did help-- some companies, like Samsung, capitalized on them and mangaed to grow and be much more successful afterwards. Samsung Electronics is second in brand recognition to Sony in the states, and has caught up or surpassed even Sony in many areas in terms of technology and quality.
Another company that's done exceptionally well is LG . with agreements with Sprint PCS and ownership of Zenith, LG's been increasing market awareness (albeit, not as successfully as Samsung), and has actually done remarkably well in the telecommunications sector.

but i digress.

the IMF reforms didn't help right away, and at best, have only slightly helped the east asian countries.
even so, skorea is doing quite well, actually-- it's the only other asian country expected to grow this year outside of china.