Is Sweden’s Devaluation Such A Bad Thing?

Well, I am writing this in the form of an extended comment, since I am on holiday and using the ecellent wifi facility in the local public library, but am about to go fo lunch. As I realised as I was going to sleep last night, my last Sweden post was always going to cause irritation and confusion.

So what follows is more like a stream of consciousness than a post. The global recovery is going to take much longer in coming than most seem to recognise, and meanwhile Sweden still needs to eat. There can be first mover advantage here, and I don’t see why others should play at “sour puss” if they simply didn’t see this. At the end of the day, is our system a competitive capitalist one, which rewards innovation and smart thinking (and state of the art monetary policy), or isn’t it? Sweden seem to be going for Lars Svensson’s ideas, and I am with them, so why shouldn’t they get the benefit of listening fo what a good economist has to tell them, rather than get all the rubbish which comes your way in a country where the government doesn’t bother to take this kind of advice. I think Svensson knows what he is doing in this regard, and bravo!

I also think we need to consider time horizons here. So many people are so busy trashing Keynes, that they forget that his greatest insight was into time horizons and policy, and not about fiscal deficits and stimulus. In the long run devaluation goes nowhere, but in the short run it can be life and death for a patient on the operating table.

So we need to consider short term dynamics here, and not long run “equilibrium” settings. Look at the depth of the Q1 contraction in Sweden. But, while everone else is sitting back and waiting (look at the mess in Japan and Germany, countries with some similarities) Sweden is reacting. Good for Sweden is all I can say.

This kind of move need have no long term implications for whether you do high value or low value work, since it is only about how to kick start an economy. Yesterday’s decision by the Swedish National Bank is equivalent to a significant fiscal stimulus, and Svensson knows this very well, and at a time when people are becoming increasingly nervous about rising fiscal deficits, then good old fashioned devaluation can get the same sort of result by different means.

Also, it is important to bear in mind that the principal objective here is to avoid deflation.

Obviously, I am not in favour of “beggar thy neighbourism”. But look, what we are testing day in and day out here are economic theories. Some said that having your own currency and having your own monetary policy didn’t matter, and those people went off and joined the euro. Economists in the UK and Sweden did not agree, and they maintained some control over their own affairs, are they now to be told by the others that this is unfair?

Basically, Latvians have decided not to devalue. That is their democratic right. But Latvians do not have the right to tell Swedes they are “disloyal” when they do devlaue, I do not follow the logic here.

Latvians are running an experiment, which will need to be followed by many other euro member countries – that of internal devaluation – we need to follow the experiment to see if it can work.

Sweden is making another experiment, people need to keep their minds more open, and be empirical. Let’s see what we can learn.

People at the ECB do not think European economies are headed for deflation. They maintain the interest rate at one percent, and do not want to practice quantitative easing. That is their right. But the Swedish National Bank do not agree with them. They think there is a significant risk of deflation in Sweden and they wish to take measures to try to protect themselves. They have the right to do that.

US citizens – according to the opinion polls – are very worried about the fiscal deficit, more worried than they are about low economic growth. That is their right. But this – and the growing concerns from Germany – means that fiscal strategies are going to be very constrained to get us out of this. So the Swedes want to know, what do we do? Answers please.

Basically our economies are stuck – weighted down by all the accumulated debt – in the absence of other adequate instruments, periodic devaluation can work like a kind of implantable cardioverter defibrillator (ICD). An ICD is basically a small device placed in the chest or abdomen. This device uses electrical pulses or shocks to help control life-threatening, irregular heartbeats, especially those that could lead the heart to suddenly stop beating (sudden cardiac arrest). If the heart stops beating, blood stops flowing to the brain and other vital organs. This usually causes death if it’s not treated in minutes. Economic biorhythmns may be remarkably similar.

Basically, this our economies are on the critical list right now, and we need some equivalent of that constant electrical stimulus to keep them afloat while we sort out the problem of what to do with all that accumulated debt in the longer term.

I was lead to think about what has happened in Sweden in this way, and about the monetary and fiscal easing potential of rotating devaluations by reading this piece from Barry Eichengreen and Douglas Irwin, where they suggest that the so called “competitive devaluations” carried out in the 1930’s may well have had the (positive) and inintended consequence of making much looser monetary conditions available than would otherwise have been the case. My principal argument though is that devaluation can serve as a kind of “short sharp shock”

Countries that remained on the gold standard, keeping their currencies fixed against gold, were more inclined to impose trade restrictions. With other countries devaluing and gaining competitiveness at their expense, they adopted restrictive policies to strengthen the balance of payments and fend off gold losses. Lacking other instruments with which to address the deepening slump, they used tariffs and similar measures to shift demand toward domestic production and thereby stem the rise in unemployment.

In contrast, countries abandoning the gold standard and allowing their currencies to depreciate saw their balances of payments strengthen. They gained gold rather than losing it. As importantly, they now had other instruments with which to address the unemployment problem. Cutting the currency loose from gold freed up monetary policy. Without a gold parity to defend, interest rates could be cut, and central banks No longer bound by the gold standard rules could act as lenders of last resort. They now possessed other tools with which to ameliorate the Depression. These worked, as shown in Figure 3. As a result, governments were not forced to resort to trade protection. his relationship is quite general, as we show in Figure 4. It also carries over to non-tariff barriers to trade such as exchange controls and import quotas.

Basically, the analogy here is that monetary policy is becoming increasingly weaker to have an effect, fiscal policy is either unpopular or unsustainable, and in the absence of either of the former, devaluation can act as something of a surrogate stimulus. Well, that’s it. Sorry this is a stream of consciousness. It needs more thought, but my stomach is calling, and I must rush for lunch.

This entry was posted in A Fistful Of Euros, Economics: Country briefings, Economics: Currencies by Edward Hugh. Bookmark the permalink.

About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

27 thoughts on “Is Sweden’s Devaluation Such A Bad Thing?

  1. Pingback: Links: 2009-07-05 - Credit Writedowns

  2. Of course it’s not a bad thing. It’s not a bad thing for _Sweden_ – and as we already know, as far as the Swedes are concerned, that’s really all that matters. The rest of the World can get stuffed, as long as their super-protectionist folkhemmet remains safe and cozy.

    Basically, those weasels are getting a free ride at the expense of the other EU members. Never mind that Swedish banks screwed up the Baltic economies in the first place; now, it’s every man for himself, and that’s right, good for Sweden, they’re getting off scot-free.

    And it’s not just finance and economy. Doing away with the conscription is another class example of this “Can’t someone else do it?”-ideology. It’s easy to downsize your army when you know that there’s someone else standing between you and the nearby Great Power.

    Harrumph. End of the obligatory anti-Swedish rant from the other side of the Gulf.

    Cheers,

    J. J.

  3. One remark only – that the Swedish banks will escape the problems in Baltics is by far not guaranteed. It becomes more and more visible in all three Baltic countries that the present new orthodox measures do not work, and devaluation is coming closer. If that happens the Svensson banks will have to write down all of the credits because internal consensus in Baltic countries has become – not to help anymore to any failing bank.

  4. “Of course it’s not a bad thing. It’s not a bad thing for _Sweden”

    Well, the thing is Jussi, whether what is good for Sweden might not be good for everyone else. ie, are there win-win factors here. Basically, the key to moving us out of the slump (yes slump, not recession) is to get the trade linkages moving again. That means some economies need to come out first, and pull the others behind them in a positive feedback mechanism. Evidently, Sweden isn’t going to pull the whole EU, but it can help the Baltics (eg) since if demand for Swedish products improves, then they can outsource work to the Baltics (if they get their price structure right) and the exports the Baltics do can help them pay down their debts to the Swedish banks. This is just one such circular channel.

    The UK can operate in like fashion. Ireland needs to correct its prices, and then the UK could help pull it out of the mire, etc etc. Turkey could help in South Eastern Europe. This would be another example.

    We need to move things, and not just sit still. The problem isn’t the banks having money to offer credits anymore, it is having worthwhile projects for the banks to invest in. We can’t do what the Chinese just did, and the Chinese shouldn’t have done it.

    Fiscal policy is nearly coming to the end of its lease, and I am just suggesting trade is now the key.

    The eurozone countries are structurally stuck, because the anti US dollar discourse means a high euro, so key countries like Germany, Spain and Italy will have no alternative to an internal price devaluation. This is a long hard road, and other countries need to eat meanwhile.

    Consensually grounded solutions at the G20 would be fantastic, but we are light years away from this kind of thing at this point. They are too busy looking for tax evaders in the Cayman Islands and playing to the gallery.

  5. Incidentally, the key piont is the commitment to hold the rate at 0.25% till the end of 2010. This makes borrowing in Krona to lend elsewhere a fairly predictable business, and hence we should see some sort of “carry based” outflow from Sweden, which is what will help hold the currency down. Perhaps the key part of the situation is the need to stop the Krona rising again (and sending Sweden into deflation in the process) as the economy slowly recovers.

    This it the technical part of the argument I think I haven’t explained very effectively so far.

  6. Really I am amazed about how happy people are to sit back and watch all our economies operating at about 80 percent of capacity. We know people want fiscal spending curtailed soon (they are worried erroneously about inflation), and people don’t want to many more massive liquidity injections (ditto), but obviously if output levels stay where they are (and they are not really rising at the moment, just dropping a bit more slowly) then large cuts in employment are inevitable, and with these output levels will drop back again as demand falls, and loan defaults rise. Still, if people are happy to sit and watch all this, please feel invited to draw up a chair, and make yourself comfortable.

  7. Short remark: Sweden is not planning to expand investments to Baltics, exactly the opposite happens. A massive deinvestment happened just days ago – the presently biggest Swedish nonfinancial investment – Bonnier newspapers in Latvia – were sold to offshore business connected with Russia. It seems that the road of internal devaluation started in Baltics bulds enormous distrust in all neighbouring countries, the circles supporting this internal devaluation externally are fallen themselves to total disbelief internally.

  8. Hi govs,

    “Short remark: Sweden is not planning to expand investments to Baltics, exactly the opposite happens.”

    Yep, I think this is obvious why, the price structure is all out of alignment. The Baltics need a large internal or external devaluation first. But many in the Baltics seem happy to sit back and be spectators on their own implosion. When the price correction has taken place, they could become attractive destinations, or let’s hope so for your sakes.

    The internal devaluation hasn’t gotten started yet really. Prices are dropping almost as quickly in Germany as they are in Estonia, and it vis against the German benchmark you need to correct. In the meantime, just hold tight and grit your teeth.

  9. Considering that the much-vaunted export-driven growth didn’t really help to solve the Finnish _domestic_ unemployment back in the ’90s, I’m sceptical that any hypothetical Swedish export-driven growth would yield better results for the Baltic states.

    Furthermore, it’s one honking big assumption that Sweden, enjoying the artificial benefits of devaluation, would even be interested in outsourcing anything. As I said, they’re _Swedes_. To paraphrase your comment; they have a long tradition of sitting back, watching someone else take the heat, and making money out of it.

    Cheers,

    J. J.

  10. Dear Jussi,

    there are many similarities between 1939 – 1945 and now, especially in Swedish money making.

  11. “Countries that remained on the gold standard, keeping their currencies fixed against gold, were more inclined to impose trade restrictions. With other countries devaluing and gaining competitiveness at their expense, they adopted restrictive policies to strengthen the balance of payments and fend off gold losses. Lacking other instruments with which to address the deepening slump, they used tariffs and similar measures to shift demand toward domestic production and thereby stem the rise in unemployment.”

    Strangely figure 2 in the Eichengreen/Irwin article is showing that countries who maintained the gold standard like Belgium and Holland had very low tariffs on imports compared with other countries. This seems to me in contradiction with the quote above.
    While other countries let loose the golden standard already in 1933, the stubborn Dutch prime minister Colijn did maintain the golden standard till 27 September 1936. On school we learn that this was bad, because it let the Dutch economy take much longer to recover from the crisis. Well maybe so, but I wonder if the current economic crisis would ever have occurred when no country has left the golden standard in the first place. The obligation to be able to convert money into gold would limit in strong degree the production of credits. So, the housing bubble which triggered this huge crises, and which was based on limitless available credit to buy houses in the U.S., would not have occurred….
    Ron.

  12. Hi Jussi,

    “I’m sceptical that any hypothetical Swedish export-driven growth would yield better results for the Baltic states.”

    Look, anything, virtually anything would have to be better than where they are going now. But look, given that the debt deflation means that domestic demand is finished for half a decade at least, and that government spending is now in strobg reverse gear as the economy contracts, where is the growth to come from to pay the pensions and the health care if not from exports?

    “Furthermore, it’s one honking big assumption that Sweden, enjoying the artificial benefits of devaluation, would even be interested in outsourcing anything.”

    Well, according to Failed State Latvia, they are doing just this right now, outsourcing health care to soak up spare capacity in Latvia’s health system.

    http://thoughtsfromlatvia.blogspot.com/2009/07/swedes-not-latvians-may-get-latvian.html

    Of course, all of this is rather irrational, given Latvia’s evident internal health problems. As FSL comments:

    “The bizarre aspect here is that one would see Sweden’s publicly financed medicine become slightly more efficient by buying services in Latvia, while Latvia’s once public-financed medical care is essentially being dismantled by budget cuts, leaving local patients with no alternative but medical care paid out of pocket.”

    The thing is, once you are bankrupt as a nation, and don’t see any point in building up export industries, what else can you do?

    On the other hand obviously I just cannot believe the European Commission is actually prepared to preside over such an affront to our dignity as common citizens of the same Europe. Still, the Swedish outsourcing part seems fine and promising as a source of revenue to finance other activities. Maybe they could take up the slack in their old people’s homes by offering low cost provision to Finnish pensioners, and use the schools they can now no longer pay for (which would have housed the children they aren’t going to have) to give low cost education to Danish interns.

  13. As Juris Kaža just commented in my Facebook, “we are stumbling from massive budget cut to budget cut, blindfolded and swinging a chain saw.”

  14. Hi govs,

    “Dear Edward, in the meanwile I have impression that you have some really big interest in observing our suffering.”

    Intellectually you mean? Definitely. Enormously. This kind of ridiculous situation must never be allowed to happen again. Obviously I do not enjoy the spectacle of all that suffering, but I cannot singlehandedly stop you from going your chosen path, but others, those who are to come, the Chile’s, Peru’s, Morocco’s of this world must learn from your (bad) example I’m afraid. At least the Baltics can serve as a test case example of what not to do.

  15. Hi Ron,

    “So, the housing bubble which triggered this huge crises, and which was based on limitless available credit to buy houses in the U.S., would not have occurred….”

    No, probably not. And maybe I wouldn’t have been able to exchange this message with you across the internet, since 50 years of unremmiting deflation might have so slowed the pace of technological change down that WordPress might never have been invented. Still, we could use snail mail, I suppose.

    And we might be looking at global population rising to 15 billion and not 9 billion in 2075, as a larger part of the world’s population would have remained stuck in the high fertility poverty trap. Life is full of those historical “might have beens but weren’t”. Come to think of it, if more people had stayed on the glod standard you and I might not even have been born.

  16. Dear Writers,

    as from my viewpoint as an insider I am somewhere surprised why the secondary issue of GDP fall has been put at forefront when discussing about Latvia. Looking at secondary issues as GDP fall, leads to wrong conclusions about (non-existing) role of internal devaluation or the external one in returining the competitiveness in Latvia.

    The core problem of Latvia is the banking crisis. The bankruptcy and bailout of the PAREX bank being the most visible event, there is a long row of 2nd order events. Latvia is in the boots of Ireland being imposed by EU to take over failed banks, but other as Ireland – outside the EUR zone. This is a deadly cocktail. Latvia is the bad schoolboy who did not take any lessons from Krugman expression “And the lesson of Ireland is that you really, really don’t want to put yourself in a position where you have to punish your economy in order to save your banks. ”

    Latvia has punished its economy, old people, hip implants and toothless mouths, children and fetuses in order to save its banks. Finito. There is nothing to discuss beoynd this point.

    And being outside EUR zone makes closer and closer the perspective to become a junk country with all sindicated debts maturing prematurely.

    Surprisingly, in 1995 when the first major banking crisis occured in Latvia, and no bailouts were done (because the big bad finger of the EU was not there), the impact of this crisis was minimal. A slowdown for max 3 months. But the EU in anticipation of butterfly effects was insisting on expensive bailouts in 2008 on New Member States. Without any exit strategy visible.

  17. Hello again govs,

    “The core problem of Latvia is the banking crisis. Latvia has punished its economy, old people, hip implants and toothless mouths, children and fetuses in order to save its banks. Finito. There is nothing to discuss beoynd this point.”

    Well basically I don’t agree. The core of Latvia (and the CEE’s) problem is the demographic issue, and how to pay for the health care and pensions for all the elderly who are about to come online as young people leave, or stay and don’t have children. The banking crisis is but a symptom of the underlying imbalance, an important symptom, but a symptom nonetheless.

  18. No internet? Really? They managed to cover the earth with a network of rails in the time that the value of money was linked to gold (and silver). So why wouldn’t mankind succeed in making a modern internet network within that same financial system? I don’t claim that the golden standard is the perfect economic system. But I do think that it is time to think out of the box with respect to our contemporary economic system, and to be not to sarcastic about other solutions. Basically the advantage of the golden standard is, that with this system banks cannot create any longer their own money to lend it out very cheaply, and in this way create financial bubble’s. They don’t have to create bubble’s of course, but the have proven to do so. Also the crisis in the 1930th started because of large scale speculations with lent money. Linking the money to gold would make this far more difficult, if not impossible. Yes, there wont be a fast impressive economic grow with this system as can be reached with the contemporary one. But more important, there wont any longer be bubble based economic implosions either. But a more modest economic grow rate does not necessarily lead to poverty. And really Edward, poor people are better of with an more honest division of wealth, than with maintaining our current economic system.
    Ron.

  19. Dear Edward, I agree that in long-run demographic problems will determine everything. Of course, if the then-Turkey will stop to deliver 10 Mio people a year to other EU economies.

    However, a pretty inexperienced and incompetent government as Latvia’s is, facing a banking doomsday at their doors, and a negative demographic perspective in 50 years (the present is better as in most WE countries), will weight these priorities at a ratio 1000000:1, will continue its thinking on a logarithmic scale.

  20. Hello Ron,

    Sorry, I didn’t mean to be sarcastic, just a little humourous. The serious point is that the kind of credit constraint which would be implied by a system based on gold would more or less by definition slow down economic growth rates (since it would be deflationary) and this may well slow down the rate of technological change. All of this is a hypothesis, since obviously the whole thing is immensly complex.

    On the other hand, if we go back to the nineteenth century, having the gold standard didn’t stop bubbles, although arguably it made it more difficult to then get out of them, although that is simply an opinion.

    Of course, being brought up in the UK in the 1950s it was obvious to me that the biggest single obstacle to the UK getting out of the economic slump it effectively entered in 1918 only to leave with the advent of WW11 was this very gold standard you are now advocating.

    But basically, I am congenitally against any radical change when it comes to economics. We need to move forward, but we need to move forward at a measured pace. I don’t go for the recent Chinese plans to create a new world order to replace the dollar either, although we do need to move away from the current see-saw between euro and USD.

    In the same way, while I was not in favour of the creation of the euro, the last thing I would want to see now would be its imminent disappearance. You have to work with what you have, and try and imporove it. My biggest fear with the euro is that it simply blows up in all our faces under its own pressure. Now that I would not like to see.

  21. Hi govs,

    I doubt that Turkey will be a migrant origin country to any great extent. The whole East European situation is exceptional, and quite unique really. Europe did not fill with Spaniards after Spain entered the EU, and my guess is that the Spanish experience will be repeated with Turkey. Turkey is already a very large migrant receiving country, which few of the CEE (except Russia) where. I think economic growth will be far too dynamic for people to be leaving in any large numbers. Generally I am a Turkey optimist, and basically for demographic reasons, plus the extended period of EU dialogue and institutional reform which precedes membership.

    Eastern Europe is at the centre of the current global crisis due to their inherently unstable demographics.

    “and a negative demographic perspective in 50 years”

    I don’t know where you get the “in 50 years” bit. Latvia’s population suffered a seismic shock in the mid 1990’s, and population has been falling since. Obviously each of us is entitled to his opinion, but as I keep trying to argue, my analysis is that the magnitude of the boom bust is due to the severity of the demographic shock. It is as simple as that. Of course you have a banking crisis, you were borrowing like mad against a future you aren’t going to have. That is what was unsustainable.

  22. Dear Edward,

    while generally agreeing that the fall of birth rates in CEE (don’t forget the Deutsche Demokratische Republik – after Westernisation the birth rate decresed significantly) is a long-term problem Numero 1 for CEE. But there is always a quantity you are operating with and using as an argument ultra non plus which in reality is not so ubiquitious one – “pay for the health care and pensions for all the elderly”. In CEE costs for that can be reduced (dismalised) as necessary, reducing the access to health care for elderly (going on now in Latvia in extreme form), reducing the pensions (going on in most CEE). The political power of elderly is in reality without impact as on governemntal management level they are absent, and the parliamentary traditions in CEE are weak and historically interrupted.

    Another remark – in Latvia with its 300 years of multicultural society tradition it is not a source of big fears that turkish people can migrate here if there will be enough jobs for all. We are by far not so parochial as Germans, Swedes or Finns. Our real problem is economic catastrophe (going over to humanitarian catastrophe) and total social and political failure.

  23. Hello Govs,

    “Our real problem is economic catastrophe (going over to humanitarian catastrophe) and total social and political failure.”

    I know. I fully appreciate this part, and you truly have my sympathy. But I also argue we need to did a little deeper and try to understand all the processes at work here. What if China suddenly became a new Latvia, it would not be funny, as I am sure you would agree. Which is why we need to get to the bottom of things. Please be patient and bear with me.

  24. @ Edward

    “Of course, being brought up in the UK in the 1950s it was obvious to me that the biggest single obstacle to the UK getting out of the economic slump it effectively entered in 1918 only to leave with the advent of WW11 was this very gold standard you are now advocating.”

    The U.K. did not have a gold standard between 1914 and 1925.
    The golden standard limits the availability of credit. Therefore within this economic system it is not easy for a country to find enough credit to pay for a military build-up that joining a world-scale war demands (maybe this is showing just an other good quality of the gold standard). This was exactly the reason that the UK government in 1914 decided to leave the gold standard and replace it with a system of fiat currency.

    I don’t claim the golden standard to be the perfect economic system. To look for the perfect economic system is as searching for the Holy Grail. Humans are not perfect and therefore it will be hard for them to come up with an perfect system. And even if they do so, it will be impossible for them to obey the rules that go with this system, because greed, egoism, stupidity and all other kinds of bad human quality’s will do their work. All this said, I do think that it is important to choose a good economic system. But even more important it will be to maintain a powerful supervision to see to it that those rules would be obeyed.
    Ron.

  25. “The U.K. did not have a gold standard between 1914 and 1925.”

    Sorry, yes I know, but it was the problem of trying to get back onto it that caused all the difficulty (at least that is my view).

    Basically, I don’t want to get into all this, since I personally see these as the problems of another age, one that I am glad is gone, and don’t especially want to get back to. But I appreciate you could take a different view.

    The problem I think we have now is how to get off the architecture of Bretton Woods two, which was configured by dollar supremacy, and away from the bipolar situation of euro up dollar down/ dollar up euro down which characterises our current position, without at the same time giving in to Chinese demagogy about the creation of a new world order.

    Since I see no easy answer to this, I think we won’t be emerging from our current difficulties for quite some time.

    “it will be impossible for them to obey the rules that go with this system, because greed, egoism, stupidity and all other kinds of bad human quality’s will do their work.”

    agreed, but then I find it hard to see this:

    “even more important it will be to maintain a powerful supervision to see to it that those rules would be obeyed.”

    since won’t just those rules be being operated by those selfsame humans with the associated greed, egoism and stupidity you just mentioned.

    That is why I have effectively given up on thinking about problems on this level, since I think they are insoluble, and focus more on macro economic problems, and real economies, where monetary factors are important, but secondary.

  26. @ Edward

    “The problem I think we have now is how to get off the architecture of Bretton Woods two, which was configured by dollar supremacy, and away from the bipolar situation of euro up dollar down/ dollar up euro down which characterises our current position, without at the same time giving in to Chinese demagogy about the creation of a new world order.”
    Down worry, problem solved. Medvedev has the solution in his pocked; http://www.bloomberg.com/apps/news?pid=20601087&sid=aeFVNYQpByU4
    Ron.

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