a free gift to total newbies from MajorDutch

[Fuzzybid]

REWARDS for FAILURE -- Bailouts - YouTube

 

[Martinghoul]

I'm not sure why you say I never respond. I say the same thing because history has proven the same thing has happened time and again whereas you seem to be in the "things are different this time" camp.

I don't conveniently ignore anything, the free market fails when the Government interferes. It seems our view of history is different.

I say that you never respond, because I have asked you a couple of questions and I keep reminding you (on a variety of threads) to respond to them. You never do, and yet you keep making the same assertions.

There are numerous, extremely well-known cases of the free mkt failing without govt interference. It's happened throughout history.

 

[new_trader]

I say that you never respond, because I have asked you a couple of questions and I keep reminding you (on a variety of threads) to respond to them. You never do, and yet you keep making the same assertions.

There are numerous, extremely well-known cases of the free mkt failing without govt interference. It's happened throughout history.

I'm not even sure how you can define a free market failure. Banks going bust for issuing too much credit? The free market is simply an adjustment process. How can you say that the market distributing land, labour and capital to where the demand is can fail? Someone knows better?

 

[meanreversion]

Central Banks and Governments have a long history of failure when it comes to price fixing. I know you disagree, you believe that CB and Governments are skilled at tweaking their Rube Goldberg systems to achieve exactly what they want...we will see.

Blimey, you've obviously not looked at a 20 year chart of $HKD or $SAR... in addition, you'd be hard pushed not to admit that the Chinese have managed their currency very tightly. I would argue that since the Asia financial crisis, central banks have become significantly better skilled at managing FX rates.

 

[Martinghoul]

I'm not even sure how you can define a free market failure. Banks going bust for issuing too much credit? The free market is simply an adjustment process. How can you say that the market distributing land, labour and capital to where the demand is can fail? Someone knows better?

Well, there are a couple of issues with the free mkt, even in abstract theory. Firstly, a free, fully unregulated mkt naturally tends to a monopolistic steady state, with all the problems this entails (deadweight loss in the economy). Secondly, a free mkt has an issue with negative externalities and, somewhat related, provision of public goods. So, even in theory, there are pretty significant issues. In practice, things get a lot more complicated.

 

[new_trader]

Blimey, you've obviously not looked at a 20 year chart of $HKD or $SAR... in addition, you'd be hard pushed not to admit that the Chinese have managed their currency very tightly. I would argue that since the Asia financial crisis, central banks have become significantly better skilled at managing FX rates.

You are arguing chalk and cheese though. Like most people, you look at the result and not the unseen consequences. Sure, a government can say that they will price fix an iPad at £10 and subsidize the manufacturer to achieve this. Everyone will have an iPad but at what cost? All the other manufacturers will go out of business and the taxpayer will be left subsidizing Apple forever. You will look at a 5 year chart of the price of an iPad and say that the Government was successful.

The Swiss CB might be 'successful' at pegging their currency, but for how long and at what cost I am not saying. My guess is at some point they will abandon it.

 

[new_trader]

Well, there are a couple of issues with the free mkt, even in abstract theory. Firstly, a free, fully unregulated mkt naturally tends to a monopolistic steady state, with all the problems this entails (deadweight loss in the economy). Secondly, a free mkt has an issue with negative externalities and, somewhat related, provision of public goods. So, even in theory, there are pretty significant issues. In practice, things get a lot more complicated.

The myth about monopolies is debunked by Murray Rothbard.

Monopoly and Competition (by Murray N. Rothbard) - YouTube

 

[wackypete2]

The Swiss CB might be 'successful' at pegging their currency, but for how long and at what cost I am not saying. My guess is at some point they will abandon it.

Just an FYI, that's all I was trying to say to begin with so that you could probably get off a few decent trades. Any other consequences of that were not relevant in that context.

Peter

 

[Martinghoul]

The myth about monopolies is debunked by Murray Rothbard.

"Debunked" is going a bit far. Rothbard's critique is well-known and has all sorts of issues. So I see absolutely no reason to assume that his view of the subject should be taken as any sort of a last word. For one, even many of his fellows (specifically, Mises and Kirzner) disagree. They certainly believe that monopoly does present a problem for a free and fully unregulated mkt. So just because one eminent Austrian economist believes that the issue can be ignored (because, ironically, he rather conveniently defines the very concept of competition away), doesn't mean that the Austrian school is oblivious of the issue. Which, incidentally, represents the sort of intellectual honesty that they deserve respect for.

Curiously, Kirzner's (and, I guess, Schumpeter's before him) argument is the most interesting one, but that's a different discussion entirely.

EDIT: just a bit of grammar tweaking.

 

[camembert]

this discussion would be better if it had pin bars in it.

 

[wackypete2]

this discussion would be better if it had pin bars in it.

A man walks into a pin bar and says "I'm a little short, put it on my account"

Peter

 

[Martinghoul]

Yeah, sorry, I take responsibility for the derailment... We should go to another thread for the discussion of economics and/or Swiss franc fundamentals. Let's get back to the pin bars here.

 

[scose-no-doubt]

A man walks into a pin bar and says "I'm a little short, put it on my account"

Peter

C'est diabolique

 

[scose-no-doubt]

Eyes open then, chaps.

 

[meanreversion]

Was there mention of AUDDKK and GBPDKK earlier, or did I imagine it?

 

[scose-no-doubt]

At the beginning of the thread I think.

 

[meanreversion]

Why would anyone choose to trade a DKK cross?

 

[Martinghoul]

Why would anyone choose to trade a DKK cross?

The only reason I can imagine is optionality, but I don't think that was the point here... It was mostly about the pin bars, if I am not mistaken, and the fact that it flopping arnd a nice round number.

 

[camembert]

what is optionality?

 

[Martinghoul]

what is optionality?

Being long (or short, depends on what you think happens) DKK is a free (not quite, but, let's say, cheep) Eurogeddon option. And I mean mostly through EURDKK.