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Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

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Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#191

Post by shp0ngle »

kumarvvr wrote: post #15

The drastic move to organic farming is puzzling. Any level headed person , forget a politician , would want to experiment first, see the results, gauge and then expand selectively. That is common sense . I guess when you are a dictator ish government and you rule the country with an iron first, the institutions of the state stop being anything and simply become rubber stamps. This also underlines the importance of se…

Yeah. Europe is learning this the hard way too. We cannot drastically shift to “green” and then buy everything “not green” from our adversaries!

Although the crisis is not nearly as bad as in Sri Lanka. Sri Lanka now needs to import rice, even when they were an exporter before!

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#192

Post by trhway »

murukesh_s wrote: post #140
sumanthvepa wrote: post #112

Earlier quoted context omitted.

Sri Lanka is not a dictatorship. They have regular elections. The Rajapakshas might have been authoritarian, even corrupt. But they won the last election in a landslide. Sri Lankans cannot entirely absolve themselves of blame for repeatedly electing a populist regime.

i think its an unfortunate combination of many things, covid being the main. this shows that democracies are not immune to leaders resorting to populist measures to win elections.. hope its a good lesson to lankans and rest of us.

democracy isn't just about elections (otherwise even the totalitarian fascist Russia could have been called democratic :). Elections is just a basic necessary condition of democracy, a starting point. Many of those populist regimes aren't democracies really, they are more like ochlocracies naturally hijacked by authoritarians.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#193

Post by HPsquared »

sumanthvepa wrote: post #112
nostromo wrote: post #40

Earlier quoted context omitted.

This is a common feature of dictatorships: a boneheaded decision from a central government wreaks havoc on the people in the field that would know better. It reminds me of Mao ordering all sparrows be killed because they eat agriculture seeds. This of course caused a much bigger crisis with insects destroying crops - because everyone knows sparrows also eat lots of insects.

Sri Lanka is not a dictatorship. They have regular elections. The Rajapakshas might have been authoritarian, even corrupt. But they won the last election in a landslide. Sri Lankans cannot entirely absolve themselves of blame for repeatedly electing a populist regime.

Are the two mutually exclusive? I don't see why a democracy can't elect a dictator, even a different one every couple of years. In ancient Rome the title dictator was a short-term thing.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#194

Post by pjc50 »

kumarvvr wrote: post #15

The drastic move to organic farming is puzzling. Any level headed person , forget a politician , would want to experiment first, see the results, gauge and then expand selectively. That is common sense . I guess when you are a dictator ish government and you rule the country with an iron first, the institutions of the state stop being anything and simply become rubber stamps. This also underlines the importance of se…

(The original article is very good at providing a beginner's explanation of forex crises, and should be bookmarked for every time someone wants to talk about inflation)

> A country ought to feed its people

This is much harder than it sounds, not just for dense tiny countries like Singapore but for much of Western Europe. The UK hasn't been able to feed its population from native production only since before WW2. I see a Norwegian making the same point in this thread; the proportion of Norway's five million people that could be sustainably fed by fishing, reindeer hunting, and agriculture on the few flat bits of the country is probably very small.

> provide basic services like power and medical facilities on its own

Even harder. Only a superpower could begin to attempt having its own production chain for both of those. Everyone else has to buy from Siemens or Westinghouse, or Pfizer etc.

It sounds like you're saying that only superpowers or mega-countries should exist? Would the EU count as a self-sufficiency unit for this purpose?

(edit: Singapore imports 90% of its food! https://www.sfa.gov.sg/food-farming/singapore-food-supply/th... - not really suprising given that it's an island megacity with a population of 20,000 per square mile)

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#195

Post by drited »

kumarvvr wrote: post #15

The drastic move to organic farming is puzzling. Any level headed person , forget a politician , would want to experiment first, see the results, gauge and then expand selectively. That is common sense . I guess when you are a dictator ish government and you rule the country with an iron first, the institutions of the state stop being anything and simply become rubber stamps. This also underlines the importance of se…

Not just a dictatorship problem. Look at the halting of nuclear in Germany - a decision made by Angela Merkel after a bottle of wine with her husband according to The Atlantic.

I would argue that the current energy crisis was also partly caused by the ESG drive which while laudable in aspiration got ahead of physical practical implementation capacity.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#196

Post by olalonde »

likecarter wrote: post #65
rlt wrote: post #55

Perhaps a dumb question: why does every little country need its own currency? Are they all just addicted to printing money? Ignoring the volatility and environmental concerns, why shouldn’t all these small to medium-sized countries standardize on a cryptocurrency?

The whole purpose of fiat currency is so the central bank can literally dictate interest rates and "print money" in times of crisis. Pegging currencies to the USD has been tried and usually fails.

> Pegging currencies to the USD has been tried and usually fails.

Do you have a source to back that up? I can think of many countries where it was done successfully (e.g. Hong Kong, UAE, Panama, etc.).

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#197

Post by sacrosancty »

blackoil wrote: post #3

Because of Islamophobia people elected known corrupt leaders, who made all the bad decisions possible. The pandemic and Ukraine war unraveled it all.

In some countries, Islamophobia is a valid and justifiable fear because there is a real threat of Islamists doing bombings and taking power. Hard to distinguish a non-political Muslim from an Islamist since they share so many beliefs and interests.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#198

Post by koide »

drited wrote: post #195
kumarvvr wrote: post #15

The drastic move to organic farming is puzzling. Any level headed person , forget a politician , would want to experiment first, see the results, gauge and then expand selectively. That is common sense . I guess when you are a dictator ish government and you rule the country with an iron first, the institutions of the state stop being anything and simply become rubber stamps. This also underlines the importance of se…

Not just a dictatorship problem. Look at the halting of nuclear in Germany - a decision made by Angela Merkel after a bottle of wine with her husband according to The Atlantic. I would argue that the current energy crisis was also partly caused by the ESG drive which while laudable in aspiration got ahead of physical practical implementation capacity.

What I don't get is how nuclear goes against any ESG. It's just fear.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#199

Post by astrange »

walrus01 wrote: post #23
themitigating wrote: post #11

Earlier quoted context omitted.

The US is very lucky as a significant amount of people have been taught that government aid/handouts are wrong, as in generally. I'm even impressed Trump spent a few trillion and still didn't get blasted for it by most people. The only two serious politicians who spoke up about it was Ben Sasse who in a conference call with constituents said "he spends like a drunken sailor" and Ted Cruise who at the end with the las…

What's funny is the deepest red counties in the reddest states are also the largest recipients of US domestic agriculture subsidies and benefit programs. Then you have other things like Walmart and similar McJobs where the government is indirectly subsidizing the companies, by various child food aid, healthcare and benefits to employees because the company doesn't pay enough for its employees to live without aid.

That’s not how benefits work. Giving free things to the employees makes them richer, which increases their negotiation power, which increases their wages. They would be getting paid less without it, not more.

What can cause this is welfare cliffs and systems with asset tests like SSI.

Bernie does like to say this because it sounds good, but he knows it’s false.

Re: Sri Lanka is having a textbook currency crisis, triggered by policy mistakes

#200

Post by pjc50 »

rlt wrote: post #55

Perhaps a dumb question: why does every little country need its own currency? Are they all just addicted to printing money? Ignoring the volatility and environmental concerns, why shouldn’t all these small to medium-sized countries standardize on a cryptocurrency?

Quite a lot of the smaller countries just use the US dollar.
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