[Marxism] Interesting Developments

[S. Artesian]

Yes, but if we're going to look at it, let's look at in it's entirety.  When 
the Euro was being prepared for its grand entry into the world markets back 
in 1998, economists [a suspect bunch if ever there was one] generally agreed 
that the "natural" exchange rate would be around $1.15 to the euro.

Didn't quite work out that way as the dollar rapidly reached parity and then 
continued to appreciate to about  .79-.83 per euro.

Then after the 2001 recession and the 2003 reflation, the dollar started to 
decline, to the glee of US capital goods exporters,  depreciating to near 
$1.59 per euro in 2007.  And then came Bear Stearns etc. etc.  and the rate 
dipped to $1.40/euro, then $1.25/euro and now it's back to $1.36 per euro. 
I think the dollar will begin another round of appreciation as the "green 
shoots" wither and die before even breaking the surface, something which the 
latest numbers from Japan, Mexico, Germany seem to show.


So sure the dollar has come a long way from its "overvalued" 1999-2000 
levels, and it has also come a long way from its 2007 undervalued level.


We really need to get rid of this mercantilist hangover that somehow trade 
balance, balance of payments, balance period means anything of significance 
to capitalism.  The EU ran what a E70 billion trade deficit with Russia last 
year-- does that mean Russia is going to "own" the EU in a few years?  Not 
hardly.  Quite simply, the more developed the economy, the more likely it is 
to run a trade/payments deficit with a less developed country as the less 
developed country by definition does NOT have the markets to absorb the 
value added products created by the advanced countries, and the advanced 
countries use the resources, the primary products, some of the less 
developed inputs, and the cheaper assembly costs of the less developed 
countries to feed their own domestic markets.

Within a single national economy we can see similar patterns, where the 
urban, industrial areas "import" more from agricultural areas than they 
"export" to agricultural areas, reaggrandizing the "transfer" through the 
debt and credit mechanisms of the economy.

Again, I urge people to read the working papers from the Hong Kong Monetary 
Authority and Kraemer and Dedrick on where the value is, and is added, in 
the global supply and manufacturing network.




----- Original Message ----- 
From: "Marv Gandall" <marvgandall at videotron.ca>
To: <sartesian at earthlink.net>
Sent: Thursday, May 21, 2009 4:32 PM
Subject: Re: [Marxism] Interesting Developments