Comments on: Latvia – the insanity continues

By: Persian Gulf currency union and the forex risk to nations everywhere | The Big Picture

Wed, 16 Dec 2009 22:33:49 +0000

[...] which suffered the worst fate of small nations, has now been fast tracked for EU membership. Latvia has allowed its economy to suffer depression in order to maintain a peg to the Euro in the hopes of escaping the downside of small country [...]

By: gary

gary — Tue, 15 Dec 2009 14:26:00 +0000

Amen . Every state, country, city and individual should say no to the crushing debts imposed on them to benefit the wealthy bank families.
Local currency is the only solution.
If a corporation wants to do business, convert to local currency at a price and charge a premium for moving their money out of your region
Put an end to compound interest, It is legal slavery.

By: Anonymous

Anonymous — Wed, 14 Oct 2009 21:00:00 +0000

Very good suggestion. Please keep it yourself. Don’t reveal in the public. What an idea. Idea of the century. Great idea. I’ve never seen a country expert like you, you could solve a problem in a week. Please have a world tour and solve problems of all the government. Good Luck!

By: Peripheral Visionary

Peripheral Visionary — Tue, 13 Oct 2009 16:43:00 +0000

With all due respect, your recommendations would do nothing to solve the underlying problem of the fact that the country is dependent on imports but provides very little by way of exports. If the currency were to be unpegged–with a rapid devaluation being the likely result–that would increase the price of imports, and would make borrowing to finance imports prohibitively expensive. With few goods being produced domestically, the economy would implode, and with it any hope of financing government initiatives through taxes. The government would be forced to print money to fund the make-work initiatives, and the overall result would not be Argentina, but Zimbabwe.

The difference between Latvia and Argentina is that Argentina has strong exports built around agriculture and natural resources–Latvia doesn’t (Zimbabwe did, but destroyed its export sector through the government land seizures, which is what pushed the country into economic collapse.) The situation for Latvia is very grim, to the point that nothing short of a major infusion of capital from the outside (as Iceland is currently receiving) will save the country from collapse–monetary and fiscal policy alone will not do it.

By: Anonymous

Anonymous — Tue, 13 Oct 2009 11:45:00 +0000

how can it be that wages in Riga are about one-third they are here in the UK and yet a meal out costs me more than it would in London? The economics of the mad-house.

By: Anonymous

Anonymous — Mon, 12 Oct 2009 21:54:00 +0000

Marshall Auerbacks`s fantasy world:)

“But Latvia doesn’t produce much to export. The Baltic States have not put in place much production capacity since gaining independence in 1991. Latvia, like other post-Soviet economies, has scant domestic output to export. Industry throughout the former Soviet Union was torn up and scrapped in the 1990s. (Welcome to victorious finance capitalism, Western-style.) ”

MAYBE YOU SOME NUMBERS, PLEASE:)

No? No numbers? ai-ai-ai.

“Ever since its independence from Russia in 1991, Latvia has paid for its imported consumer goods and other purchases by borrowing mortgage credit in foreign currency from Scandinavian and other banks.”

Really? ah-ah-ah:) No. Not true.

Latvia
1. problem – Parex Bank ( about 1 billion euro)
2. problem – state budget deficit ( about 2 billion euro per year)