"The annual spring meeting of the International Monetary Fund was notable in marking the Fund’s effort to distance itself from its own long-standing tenets on capital controls and labor-market flexibility.
Slightly more than 13 years earlier, at the IMF’s Hong Kong meeting in 1997, the Fund had attempted to amend its charter in order to gain more leeway to push countries towards capital-market liberalization. The timing could not have been worse: the East Asia crisis was just brewing – a crisis that was largely the result of capital-market liberalization in a region that, given its high savings rate, had no need for it.
That push had been advocated by Western financial markets – and the Western finance ministries that serve them so loyally."
yup
" Financial deregulation in the United States was a prime cause of the global crisis that erupted in 2008, and financial and capital-market liberalization elsewhere helped spread that “made in the USA” trauma around the world."
can't fault a word of that
"The crisis showed that free and unfettered markets are neither efficient nor stable. They also did not necessarily do a good job at setting prices (witness the real-estate bubble), including exchange rates (which are merely the price of one currency in terms of another)."
again on target
capital controls for emerger nations and midgets too ??
because
"in unfettered markets...money goes to where markets think returns are highest."
and that can lead to forex mayhem
example today:
" With emerging markets booming, and America and Europe in the doldrums, its clear that much of the new liquidity being created would find its way to emerging markets. ....The resulting surge of money into emerging markets has meant that even finance ministers and central-bank governors who are ideologically opposed to intervening believe that they have no choice but to do so. Indeed, country after country has now chosen to intervene in one way or another to prevent their currencies from skyrocketing in value."
stig goes on to draw the correct job class conclusions as well as antyi metropole perphery conclusion
but might there not be another point here
note well:
in 97 emerging currencies colapsed in value
here and now they're fixin to" sky rocket "
ie threatening to wreck the GREAT TILT ( the north south profit slurry ... eh ??)
a nice coincidence of goo goo pro emerger national sovereignty and MNC best practices .
often the MNC playing the whole board for profit max sees realizations better behind barriers and with rapidly rising emerger asset markets and land lot markets and commodity prices and ...
perhaps joe is carried away with this change of policy
perhaps as the prevailing winds shift again and they must
then this benign policy like the nasty washington consensus of the 90's
will pass into a new negation's new position
.
.
"Now the IMF has blessed such interventions –" but maybe this needs undeerlining not hand wringing unease
"... as a sop to those who are still not convinced, it suggests that they should be used only as a last resort."
get the drift mates ???
tack right tack left profits can befound on either side
open border doors close border doors
just like strengthen the state weaken the state
policy follows profits not principles
but i'll let joe dream in public
" On the contrary, we should have learned from the crisis that financial markets need regulation, and that cross-border capital flows are particularly dangerous. Such regulations should be a key part of any system to ensure financial stability; resorting to them only as a last resort is a recipe for continued instability."
"There is a wide range of available capital-account management tools, and it is best if countries use a portfolio of them. Even if they are not fully effective, they are typically far better than nothing."
what about wage policy :
"The crisis has also put to the test long-standing dogmas that blame labor-market rigidity for unemployment, because countries with more flexible wages, like the US, have fared worse than northern European economies, including Germany. "
germany joe ??
the german industrial job force has faced steady stag since the germans began to eat the flesh of their euro pinned piig partners in THE ZONE
maintaining their intra zone surplus and sapping the piigs trade position
as piig price levels rose against german price levels
a nasty game that clever german social marketeering social transfering systems pulled off
while we yankees simply blew out the industrial jobs themselves
