The economic agents now know that the market signals are false. They know that the interest rate is a political instrument and can’t give any information about the real preferences of the market – to invest or not to. That’s why everybody is in zugzwang. It’s like to play chess with closed eyes, without knowing the position on the chessboard. You’ve got to be crazy to play anything…
World Economy in Zugzwang
Fiscal (Golden) Rules in the Constitution
The Financial Stability Pact or the so-called "fiscal board" was introduced in Parliament at the beginning of the summer and will be put to vote shortly after the elections in late October. As expected some new texts are proposed both in the Constitution (see here) and in the Law for the Structure of the State Budget or the Organic Budget Law (see here). This particular formula was the most likely structure...
Europe and the Financial Markets
Almost three years after the crisis hit in 2008 there are sill some EU leaders that demonstrate total misunderstanding in the way financial markets work. Obviously, Europe suffers from excessive government debt, but according to France and Germany the only feasible solution is hidden in the implementation of more taxes, which ought to increase the funds for financial bayouts of countries with high government debt, and also in launching new administrative structures for economical manipulation.
IME Club & Library – Events and Photos (September – October, 2011)
Lawrence Reed - “Seven Principles of Sound Public Policy” (27 September 2011) & Mises Event - “Austrian School of Economics and the Crisis” (5 October 2011)
How Much Further Can the Fiscal Reserve Shrink?
The latest data shows that the fiscal reserve has shrunk to 4.683 billion lv. at the end of April. Recently, the minister of finance claimed that there has been a slight increase to around 5 billion lv. It is obvious that the fiscal reserve has shrunk by more than 60% since its 12 billion lv. peak in October 2008. This downward tendency has been in motion since the end of 2008.
Riots and Social Benefits
What is happening in London and other British cities is yet to be taken under consideration. So far, nobody pays attention to the unintended consequences, resulting from the social framework in the UK...
Employment and Wages
Recently the National Statistical Institute published data on the employed and the average wage in the second quarter of the year. In comparison with the same period last year the employed in the second quarter of 2011 decreased with 29 thousands or 1.3%, as the reduction continues to be in the sectors, affected most seriously by the crisis...
IME Summer Seminar “Europe & Liberty” (Troyan, 2011)
The seminar gathered 30 students from various countries: Macedonia, Ukraine, Belarus, Poland, Israel, Italy, Denmark, Brazil and Bulgaria. Lecturers were Pierre Garello (France), Gregory Rehmke (USA), Douglas Rassmussen (USA) and Carlo Lottieri (Italy). Krassen Stanchev also attended as a guest speaker.