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Between Monetary Polices Where are Markets Heading to? At the time of stock exchange drops, the FED boss, Ben Bernanke, said to his colleagues:
“Buy
everything, I shall give you so much money that you will be able to do so.
You can get as much as you want. In this way the pockets of Ben Bernanke’s colleagues were filled up risk-free and more rapidly than during the previous boom. Instead of allocating assets by market forces, where the discounted shares and equities would be acquired by those investors, who know how to multiply money, creating added value in the process, they ended up with individuals who had caused the crises in the first place and who were indeed creative, but within the area of creative accounting. The creation of junk money (for privileged bankers) is, in the literal sense of the word, equivalent to stealing from creditors and people/parties that have savings. The printing money policy is not only dishonest, but is also harmful to market mechanisms. It transpires that the crises had benefited mostly those who provoked it, since at a time when money was king they were awarded shopping money to take over discounted assets. The recipe provided by Ben Bernanke to Americans is dishonest and wrecks business relations. It was not effective performance, but getting into privileged circles guaranteed the highest and fastest-growing profits. Since we have a notion of just and fair value, perhaps one should introduce the notion of “unfair profits”, which manifested themselves in billions of dollars being handed over to selected bankers, so they could buy themselves depreciated assets.
The transfers from the Union made it possible for the Polish government to minimize effects of the crisis of 2008-2010. They also caused a complete lack of any public finance reforms in Poland. The increase in the Polish debt in the last 3 years from 529 billion Polish zloty in the end of 2007 to 778 billion zloty (195 billion euro) in the end of 2010 is a reflection of policy crash of the Polish government. The Polish deficit was one of the highest in Europe in 2010, it was higher than in Iceland and just a bit lower than the deficit of Greece. Apart from it, Poland is one of the EU member states with the highest budget deficits (higher than 6 percent in 2010), which increased their deficit between 2009 and 2010. While in 2010 Greece decreased its deficit from more than 15 percent in 2009 to about 8 percent of GDP, Poland increased its deficit from 7.1 percent to almost 8 percent of GDP. It is obvious that budget expenditures influence the GDP, however it is a short-term dependency, in the long term the results are just the opposite, the means that have been spent by the state would have been much better allocated by the market, although they would not translate so fast in the demand effect. For the ineffective increase in the GDP in the last three years, Poland will pay all the costs concern the debt increased by 250 billion PLN. |
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