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Originally Posted by piepounder
conversation is all over the place.
anyway back to ops question, and to simplify my first post.
Japan is waaaay worse than any other country but it doesnt seem to have hurt them.
Where do you get this idea from? Japan hasn't grown in 20 years.
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on a tangent,
Greece is ****ed no matter what. they dont have a central bank and they dont have an exchange rate to correct unemployment. ****ed. unemployed people dont pay taxes. ****ed. The only approach they can employ is austerity and bailouts.
While the euro is a big part of the problem, it's not the root cause. The root cause is that Greek culture is sick and socialist. But yes, a big part is the euro. Currency devaluation is essentially market created protectionism, and the Greeks are too incompetent to compete with the efficiencies of Germany, so without protectionism, their economy goes down the toilet.
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this is the same situation municipal and state governments face. no central bank, no exchange rate to correct unemployment and rising debt is disaster.
Right, but the root cause is still cultural/structural/competence relative to what the market desires and values.
Let's go further than countries/states/municipalities and imagine that every person had their own central bank with their own currency, freely floating. What would happen? People with highly market valued skills and attributes would have more valuable currency, allowing them to disproportionately buy more of the labor output of the lower skilled. People with low skills, like Mexican immigrants in US as happens in reality, would devalue their personal currency and receive less buying power per unit of work.
It works that way on the state/national level as well. The core problem is that people, towns, cities, municipalities, states, countries, want more than they can produce what others want. There are only two long term solutions to this:
1. Improve skills and working hours; foster economic development
2. Consume less
And there is a short term solution to this too:
3. Buy things on debt until the whole thing collapses and you become increasingly externally controlled and partial serfs with lower levels of wealth/consumption.
The US, despite its world-beating skills, is a very high level consumer that exceeds even its skills. China has stepped in to provide (3) and grow its power and wealth in the process, at the expense of the US economy and long term global peace and stability.
Apart from (2), consuming less, there are only two outs for the US here:
- Reign in China's vast theft of its wealth, such that the US can earn far more money from the fruits of its innovation
- Lead the way on innovation such as robotics and software, such that so much wealth is created that debt can be paid back.
Trump is taking the first steps to doing the first, and the second looks promising imo. I think robotics will solve a lot of wealth problems, particularly around care of the elderly, construction, etc.
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but if you have a central bank and inflation is low...there are lots of things the central bank could do, quite prudently, and those strategies are evolving.I'm not too worried about any low inflation country adding debt right now.
You're not getting to the root cause though. I'm not sure central banks can fix this root cause. Many suburbs of Chicago or Detroit, for example, would never become competent or happy regardless of whether they had their own central bank. It's a question of competence and culture, and central banking is at best a very very blunt instrument.