tag:blogger.com,1999:blog-5882645467378797266.post6433768701715817392..comments2023-07-17T11:55:51.363+02:00Comments on ObservingGreece: Reconsider Capital Controls!kleinguthttp://www.blogger.com/profile/12491174042954678023noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-5882645467378797266.post-82824144454556188962016-02-10T22:56:19.106+01:002016-02-10T22:56:19.106+01:00Fair enough. I would say though that if someone im...Fair enough. I would say though that if someone imposes this kind of constraints he will have to tolerate a higher risk premium. Not everybody would want to participate in this kind of market -some because they are opportunistic, some because they are risk averse-. That definitely make some risky states less attractive. I am not saying you don't have a point, I would want to see someone quantifying the pros and cons.<br /><br />I hope you enjoyed the live stream of Varoufakis' presentation.<br /><br />Cheers.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-73999889016825257602016-02-10T12:41:55.155+01:002016-02-10T12:41:55.155+01:00Civil societies are protected by laws and rules, t...Civil societies are protected by laws and rules, their citizens do not enjoy limitless freedom. It is a trade-off that most people are willing to make. Alas, Greeks think each individual person has infinite freedom, consequently the country is a jungle.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-28408590221447954582016-02-09T21:52:27.284+01:002016-02-09T21:52:27.284+01:00I have come across the paper "In defense of c...I have come across the paper "In defense of capital controls" which I link below. It was published in the "Socialist Register". Well, I guess I now know that I am a socialist thinker...<br /><br />http://socialistregister.com/index.php/srv/article/viewFile/5671/2568kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-38890374926159371632016-02-09T19:46:13.581+01:002016-02-09T19:46:13.581+01:00In a capital controlled environment, foreign inves...In a capital controlled environment, foreign investors would sign a contract with the state which would govern, among others, annual dividend paymens and capital repatriation. Suppose it said that capital cannot be repatriated within the first 5 years and only in annual instalments thereafter? Why would an investor be scared by that? The investor would only be scared if he couldn't trust contracts with the state.<br /><br />On the other hand, a hedge fund who sees a Greek spring on the rise and wants to participate in it by pouring in a few billion, only to take them out as soon as autumn approaches - well, that hedge fund would face some limitations.<br /><br />And yes, a free marketer would not support Tsipras. Ever.kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-81478922823505665192016-02-09T19:41:29.375+01:002016-02-09T19:41:29.375+01:00A society which has traffic controls and speed lim...A society which has traffic controls and speed limits is not a free society but a protected one... (it is society which is protected).<br /><br />Iceland is a classic case. A bunch of bankers thought they could become the Wall Street of the North Atlantic. There were no limits on capital flowing in and staggering amounts of capital flowed in. And the cost to society became quite enormous even though they were smart enough to have the banks pay part of the price.<br /><br />kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-49939380659920719422016-02-09T19:37:11.227+01:002016-02-09T19:37:11.227+01:00I did not mean domestic capital controls, only cro...I did not mean domestic capital controls, only cross-border. And instead of controls, I should have chosen a less aggressive term. Perhaps capital flows monitoring. It's not too long ago that Austrian borrowers had to secure Central Bank approval for loans from abroad. <br /><br />Yes, Switzerland has a very strong economy where they import raw materials, develop them into finished products and export those. And yet, capital flows have caused quite a few problems for Switzerland in the last years.<br /><br />In a way, Switzerland is a victim of its own success. The capital of other countries/currencies seeks the CHF because it is so strong and safe. In the process, the CHF gets even stronger.<br /><br />The Swiss Central Bank 'wasted' the equivalent of one year's GDP to keep the CHF from exploding. They purchased EUR, USD, etc. against printed CHF. The Swiss Central Bank now has a balance sheet reminiscent of a hedge fund (largest individual position: Apple). And the printed CHF went into the domestic real estate market and drove up prices. That obviously is a trend which cannot go on forever. In fact, the President of the Central Bank has often referred to 'other instruments' which are still at their disposal. He didn't mention capital controls but many people thought that that's what he had in mind.<br /><br /><br /><br /><br /><br />kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-62953987153215917342016-02-09T10:03:06.220+01:002016-02-09T10:03:06.220+01:00Mr. Kastner,
I don't think Switzerland is a g...Mr. Kastner,<br /><br />I don't think Switzerland is a good example. In relations to what it upholds. Switzerland is the millionaires/billionaires bank. Everybody likes and trusts them and takes their money there. Nobody wants Switzerland to be a weak nation nor do they care if the cost of living there drastically increases. There will always be more millionaires and billionaires to buy ever more expensive time pieces, mobile phones, pharma products, chocalate and high end ski vacationing.<br />Switzerland is supported not only in the banking industry but in the high end products they sell. Varoufakis made an interesting comment here in Greece at one point mentioning Singapore. That they import everything and manipulate it into high end products. Such nations will never will be weak. Most Greeks neglected to understand what he said and meant.<br /><br />For the remaining nations most are quite exposed to being upended by a free market. Not because of the market but due to bad management. Like Greece. With our country leaders as is and Quartreto managing us, Greece can not be a strong nation economically. At least right now. I think our narrowmindedness is our worst trait. <br /><br />As for capital controls enstilled in Greece, i guess it can be debated. For the healthy business POV, it is a nightmare and hopefully in the coming months, things will get better as far as transactions are concerned. For the every day individual, with such governments, maybe it was good as so the deposits would not continue to drop and hoarding cash elsewhere would stop as well. It also help shed clarity on small everyday transactions, where people must use plastic money to make purchases, which inturn require a receipt to be issued. This helps fight the black market of undeclared income. I see more and more little old ladies using cash cards, where up to 6 months ago was impossible to realize in their minds. Just as i saw in portugal 1 year ago.<br /><br />Even in capital controls we must find the good within the bad.<br /><br />Sincerely,<br />V<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-34351722756838982862016-02-08T22:22:00.050+01:002016-02-08T22:22:00.050+01:00Can you touch upon the trade off? What you say mig...Can you touch upon the trade off? What you say might make sense once the crisis occurred. But what investors would do if they know that at any time there might be capital controls and they kiss their investment goodbye?<br /><br />No free marketer would ever support Tsipras.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-10248211665724697982016-02-08T22:12:12.128+01:002016-02-08T22:12:12.128+01:00An economy with controls is not a free economy, bu...An economy with controls is not a free economy, but a protected (or over-regulated economy)!<br />The main problem is with Institutions (banks, agencies, etc.) and its regulations... <br />Reform the Institutions! Anonymousnoreply@blogger.com