The EU never ceases to amaze. The government of Hungary, led by the Fidesz party of Victor Orban, is one of the few in Europe to actually rule in the interests of the people and not bother pandering to traitors, unrepentant communists and foreign bankers currently sucking the place dry. (I’ve mentioned and praised their constitutional reforms. Canada’s Conservatives have much to learn from Fidesz.)
Now the EU and the IMF are trying to bully Hungary into reconsidering a law that would see the Hungarian National Bank’s policy more closely overseen by the Hungarian people, with members of the governing council appointed by the prime minister and not the central bank’s governor.
Now HNB governor Andras Simor is a lifelong bureaucrat who began his career at the HNB during the communist period, and was appointed to the governorship by the former communist government Fidesz replaced. Simor is determined to nip any hope of Hungary’s economic recovery in the bud by raising interest rates with Europe on the brink of financial catastrophe, hoping Hungarians will blame Fidesz and re-elect a communist government. (Who needs the euro?)
The ratings agencies who needed to have downgraded the whole euro zone to junk long ago downgraded Hungarian debt to junk status the moment they learned that Fidesz were trying to rein in Simor. Now you know whose side they’re on. Nicolae Ceausescu saw to it Romania’s creditors were paid in full and on time. If you’re an Austrian bank, you’ll much sooner want an unrepentant communist running Budapest than anything resembling a Socred who’ll tell the banks where to go.
Keep your eyes on Hungary.
Update: An alternative viewpoint.
Now the EU and the IMF are trying to bully Hungary into reconsidering a law that would see the Hungarian National Bank’s policy more closely overseen by the Hungarian people, with members of the governing council appointed by the prime minister and not the central bank’s governor.
Yeah, but “the people” always want NEW counterfeit money.
Now, disbanding the central bank and moving to free banking would be exciting, money being a commodity which should be offered by multiple issuers in the free market like any other commodity.
But of course LOCAL control is always better than CENTRAL control even in the state-run counterfeiting business.
Dick seems to miss the fact that it’s always a bad idea to tie the central bank into the political process. The purpose of the central bank is to defend the value of its currency, not to act as some kind of phony economic stimulus. Turning it into a government agency means turning the currency into funny money ala Zimbabwe.
Hungary has been turning itself into a banana republic for many years with its insane fiscal policy. The government is basically broke, and there’s only two ways out: devalue the currency or default. The EU has said they will help out but only if Hungary doesn’t go and devalue the currency as well, thus paying back their new and old loans in worthless monopoly money.
Dick’s political moralisms here are purely stupid. A bank’s first obligation is to remain solvent, and that means getting the creditors to pay back their loans, irrespective of who those debtors are. As for the drivel about “foreign bankers currently sucking the place dry”, what part of “pay off your debts” don’t you understand? Hungarians did the crime, now they can do the time.
I have no more sympathy for the Hungarians than I do for bankrupt Greeks, Portuguese, Irish or Italians. They all dug their own holes in the ground. And before anybody snivels that the previous government was a bunch of communists, well they were. And the voters freely elected them in believing the truckload of lies that were on offer. Tough, the voters were stupid, and now they’re about to get it, good and hard.
For the last time, voters are responsible for the governments they get.
In practice, the EU has simply served as war by other means for the Germans as they seek domination of all Europe.
Is the entire point of “BusinessInsider” to publish nothing but inane crap?
Seriously, the past dozen links to BI I’ve seen have been the most insipid lunacy. The site is honestly 95+% stupid linkbait.
Don’t reward it with links.
I’m with cgh in the specifics – the last thing I want a central bank to do (if one must exist), is to serve “the people”, because what “the people” want is always more and easier money, damn the consequences.
“The people” – in terms of political pressure – is exactly what I don’t want running fiscal policy.
The further a nation can distance its economy from the transnational central banking cartel who have issued credit on 100s of trillions in toxic derivatives simmering on the back burner waiting to collapse the system, the better. If your currency is tied to these scum bags get ready to truck wheel barrels ful of it to buy a sandwich.
Good for Hungary.
“Is the entire point of “BusinessInsider” to publish nothing but inane crap?”
Yeah, pretty much, IMO.
I wouldn’t call Hungary a model for anyone. Having earned a low credit rating and high interest rates in their own currency both the government and vast numbers of individuals and businesses took out lower rate foreign currency loans.
Now the government, having further trashed their own currency and made those loans all but impossible to pay back, is passing laws to change the terms of those loans.
There’s nothing to admire in this ugly situation at all. It is indeed people attempting to vote themselves other people’s money.
Occam, you really don’t know what’s going on here, do you? Hungary and its citizens blew their brains out overloading on debt all on their own. And now you want to let them off the hook? Whatever happened to the conservative notion of being responsible for your own actions?
“(The MSM) all say the same thing. Victor Orban is a dictator. Fidesz wants to do away with free elections. Fidesz wants to do away with the free press. Fidesz wants to print funny money. Fidesz hates Muslims, Jews and Gypsies. Fidesz wants to sell your kids to the Gypsies.”
Well, Dick, the part about the free press is at least partially true; three days ago Hungary’s constitutional court ruled against the government’s attempt to form a “media authority”, comprised of select government appointees, which would have forced websites and newspapers to provide “balanced” and “moral” coverage. In the free west it’s not up to governments, I would suggest, to decide under penalty of large fines what constitutes “balanced” or, especially, “moral” news coverage.
I’m no expert on banking/economics, especially as these issues pertain to sovereignty and history, so I’ll stand back on that one.
Sorry, Dick, not buying it. The media likely do tell lots of lies about Orban. They do that about everyone that isn’t one of their comfortable leftists.
But Hungary is still bad news for foreign investors. They’ve nationalized pension assets like Argentina did, simply transfered by fiat currency losses from Hungarian debtors to foreign creditors, etc.
Once a country starts behaving like Argentina all sane foreigners should avoid it like the plague.
Dick, surely you’re not defending Bible Bill and social credit, are you? That piece of economic lunacy set Alberta back a generation. It’s called a ponzi scheme, Dick, and in Alberta it collapsed the way all socialisms collapse. It ran out of other people’s money to spend.
And then there’s this bit.
“They are now defending the right of the Hungarian people, who are sovereign in Hungary, to oversee the issuance of money and regulation of its value.”
Yes indeed. And they will also suffer the consequences of any bad decisions they make. However sovereign they may be, you are not suggesting that they should be relieved the consequences of bilking their creditors, are you?
It doesn’t matter who owns the banks in this particular case. If Hungary goes through with the policy one of the first things that happens is a collapse of all of them in a run on the banks. Those Hungarians with money will frantically pull their money out while it’s still hard and ship it outside the country. In no small measure, a large part of Greece’s fiscal problems are that the country has been hemoraging money like mad for the past year and a half with Greeks doing just exactly that.
And when that happens, what the government will do is stop people from accessing their accounts for more than some nominal, rationed amount. So how’s your freedom and sovereignty look now? When you’re bankrupt you have no freedom.
EBD, I agree with you. In fact, a government press authority deciding what constitutes balance in the media sounds an awful lot like Stalinism, now doesn’t it?
Occam, you really don’t know what’s going on here, do you? Hungary and its citizens blew their brains out overloading on debt all on their own. And now you want to let them off the hook? Whatever happened to the conservative notion of being responsible for your own actions?
Posted by: cgh at December 22, 2011 6:56 PM
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Exactly cgh. How anyone can sit there and defend any of the euro countries is beyond me.. Do we just forget that they all joined and wanted a single currency? Do we also ignore that this was brought on because their BS socialist/communists ideas up until the 90’s had pushed all their budgets to the limits, and their bright idea was to form a single currency?
I guess we also ignore that we told them they needed a common bond market when they first brought the idea up? I guess we just forget that the Europeans did what they always do, think we are idiots, and went a held and did it without a common bond market anyway, eh?
Now that the IMF is letting the Hungarian people have more control over the money that the rest of the world has given them to take care of their debt problems. AKA, the massive money printing that 6 central banks did to stop the euro break up, the EFSF the ESM, we are supposed to fell bad for the Hungarian people because of the big bad banksters? Why, because they all “promised” that they would get there debt in order?(At least the Germans are doing it)
To me this article is an… EPIC FAIL…
The best part about this euro mess, the Chinese Government is going to build 36 million homes over the next five years. Wages just went up another 21% in a more remote Chinese province, and it’s Christmas time in China!
Chinese Adopt Western Holiday of Christmas
http://www.voanews.com/english/news/asia/Chinese-Adopt-Western-Holiday-136102808.html
“Occam, you really don’t know what’s going on here, do you? Hungary and its citizens blew their brains out overloading on debt all on their own. And now you want to let them off the hook? Whatever happened to the conservative notion of being responsible for your own actions?”
I know all too well what is going on. I’m not blined by romantic views of international banking.
Hungary’s socialists were intoxicated by western banking credit after the fall of communist austerity and the rush to decadent Euro socialism. Like drunken frat boys with a credit card and dad’s car – no one disputes they took on unrealistic debt load – the other side of the coin is the IMF affiliated bankers who over extended creit to such naive irresponsible people unused to western credit and debt mechanics. The banks are as guilty if not more so than the defaulters. The credit /loans should have stopped when things were able to be stabilized but the credit continued to flow.
From my reading of history the IMF and their international banking cartel are predatory in lending credit at impossible compounded rates to nations with low or flatlined GDP. No doubt they did so with more than one former soviet block nation or African nation with hopes of gaining control of their resources or currency system when the nation’s GDP to debt leverage became unmanagable. Yeah I say screw the usurous bastards good, refuse to pay their bloated compounded debt – you know damn well they are scheming right how to stick all of us with underwriting their sour credit default swaps and other toxic derivatives. Screw them before they screw you. You ain’t dealing with boy scouts.
Any business or nation with a private bank as a partner has just secured their home by inviting a theif to dinner.
Occam: “From my reading of history the IMF and their international banking cartel are predatory in lending credit at impossible compounded rates to nations with low or flatlined GDP.”
This is just too funny. It’s like blaming the murder rate on gunshops. So it seems you don’t believe in individuals or countries being responsible for their own actions.
“Impossible compounded interest rates”???
Pure drivel. The terms and conditions of these loans are clearly known before they’re signed up for. If they can’t handle the interest payments, it’s their fault. And if the interest rates are high, it’s because the banks and rating agencies are saying that they are a bad credit risk.
I think you should check your conservative credentials again. Your entire posting on this topic is one giant apology for fiscal moral hazard and excusing nations from their bad financial decisions.
“Any business or nation with a private bank as a partner has just secured their home by inviting a theif to dinner.”
Utter nonsense. Tell it to the banks who were robbed blind by the Argentinians. You’re doing nuthing here except justifying theft of private property rights by the state. And that my friend is communism.
Having read the discouraging words about the poster’s financial views, perhaps a note on the other allusion —
// (I’ve mentioned and praised their constitutional reforms. Canada’s Conservatives have much to learn from Fidesz.) //
&
// They are now defending the right of the Hungarian people, who are sovereign in Hungary, //
Borderless Nation 2011/04/15
BUDAPEST/BERLIN (own report) – In the midst of hefty protests, the Hungarian government is preparing to pass a new constitution oriented on German ethnicist policy. The document conjures up the “notion of the unified Hungarian nation,” beyond the borders of the Hungarian Republic, to include Hungarian-speaking minorities of the neighboring countries. […]
&
The ethnic oriented new constitution is the second internationally controversial measure taken by the Orbán government. At the end of 2010 and the beginning of 2011, the new Hungarian media law received wide attention throughout Europe. It imposed broad restrictions on the media’s freedom of expression […]
It seems they think that “the Hungarian people” should be sovereign whereever there are people of Hungarian extraction — and if you don’t like it you can shut up.
Canada’s Conservatives have as much to learn from Orban as from Putin or Lukashenko. Fidesz is not Conservative: it is a Nationalist-Populist party with irredentist,antisemitic overtones.
As a Hungarian friend of mine posted on his Facebook wall: Brussels didn’t come with tanks, it was Hungary who went to knock on its doors and has been happily scrapping off subsidies since (to finish it off with a very Hungarian “Az Isten bazza meg!”)
Hungary’s problems are known to everybody: a bloated, unproductive, resources-eating and corrupt state, high taxation, the smaller active workforce in Europe and an aging population. The solution is known too: the Socialist-Liberal coalition in ’94 introduced an austerity package (the Bokros Package). It costed them the reelection at the hands of Fidesz in ’98. (By the way, one of the corruption scandals of the first Fidesz term involved a company with a name which will strike a chord with Canadians: Happy End Kft.)
The bottom line is: Hungarians yearn for the Kadar years, but make up for it with anti-Communist rhetoric. Fidesz understood that well, and that, in a nutshell, is what Fidesz is about.
The featured article is drivel. Fidesz has undertaken very mixed economic policy ranging from some good spending cuts to downright bizarre like pension nationalization and this central bank jacking. The talk of the central bank ‘choking off’ an economic recovery with interest rate increases is nonsense. Without those interest rate increases, the currency will surely crash. No real economic strength can be based on fiat abuse.
Fidesz is scum they are simply a diet-fascist alternative to the previous ruling socialists who also helped get Hungary where it is. There is no ‘classically liberal’ alternative in that country they are so screwed. The EU isn’t the only evil in that neighborhood.