I just think that, why the globalization become so popular recently? That's maybe because our virtual economy increased so fast, and we need more faster real economy, so Americans have limited resources, so companies in America they need to gain resouces outside of America.
This has been going on for 400 or 500 years. Colonialism was really about feeding the virtual economies in Europe. Making the real economy match the virtual one in Europe. But now there's no more colonies to exploit.
So imperialism is also linked to capitalism, and linked to the virtual economy.
Well, this business of fractional reserve banking has made the problem very acute lately, but we've always been headed towards this point sooner or later.
But the Virtual Economy is like the faster better imperialism.
So someone said, developing countries are not going toward somewhere, some kind of development, they are the result of development.
Oh, thank you! You just blew my mind!
They are the result of the process of developing the first world.
You mean the developing world is the result of the process of developing the first world.
They're always going to be in second place, and messed up.
The inevitable outcome.
Also you can't have a war if you have the same currency.
Because you're in the same economic boat.
Like the US and china.
Because the currency represents this country's productivity, and this country's future. It's like a person's credit. if they have a war, it has a bad future and the productivity will decrease and the value of the currency will decrease.
And it's bad for the currency to decrease?
Sure, your money decreasing?
If you have 50 dollars, it could translate to 2 euro, or one euro say, but afterward you might only be able to buy half a euro, so your money has less value.
The article says that in textbooks, in a recession the government has to spend more to offset falling private demand. Can anyone explain why?
It's just like 1+1 = 2. My economics teacher said the factor to increase growth from spending is from 4 groups, that is, people, compaines, governments and exports.
So when people, companies spend less, and exports decrease, the govt should increase their spending.
But the price rises recently, everyone is complaining.
That's because our central bank devalued our currency.
When did they do that?
To stimulate exports?
How do you devalue a currency, print more?
Buy more US dollar or euro.
What does devalue mean?
Make our currency worth less
Against the dollar you mean?
That was just recently?
They often do that.
Yes. You could say, 'usually'.
I knew that China did that, to keep their currency stable.
But if they devalue the currency, how do they buy more US dollars?
Hey, good question!
Because we have the central bank reserves.
So we have money to buy or sell to control the currency.
The central bank will buy a lot of foreign currency, like dollar or euro or Japanese yen. And how do they buy the currency? They use Taiwanese dollar to buy foreign currency. They sell Taiwanese dollars in the market to buy US dollars, and in the market, when you sell something, the value of that thing will decrease, and when you buy something, the value of that thing will increase. So the central bank, they sell Taiwanese dollar to devalue it.
Who do they sell it to?
People in the market.
People actually buy the taiwan dollar?
Like companies in taiwan or foreign investors.