GDP measures activity, it does not measure wealth. In the post-industrial service based economies of the West I do not believe that GDP figures do anything but give people something to talk about - they are a very blunt instrument to use to try and describe what is actually going on.I know there is a lot of talk about debt to GDP ratios - IMO a better metric would be the ratio of the cost of servicing debt to total government expenditure.
Also - instead of lumping the whole economy into a single figure I would rather more emphasis be given to such things as the balance between the various sectors of the economy and the Gini coefficients of the workforce. I have often referred to GDP numbers as "tractor production figures" - GDP may have been an accurate method when tractor production was a big part of our economies, this is no longer the case so can we please come up with a different way of measuring what is going on.
After all - policy is decided on such figures....
The real meaning of "globalization" is that the bourgeoisie no longer feel attached to a specific national home, as is more the case in traditional competitive imperialism.
The communist ideal of federation is a unity of self determined states, so for it genuine self determination must exist before you can have genuine federation. Neither the EU or Russia can promise genuine federation, to Ukraine or anyone, because they are not interested in self determination of peoples but in removing national borders to make profits. This kind of global expansion of capital is bound to appear in the guise of far right extremism, both pro and contra (fascists in Ukraine and Greece), because of the kind of unity wanted, which is necessarily a fake, corrupt kind, not a unity for the majority but for the minority (such as those in Davos at the moment). For instance it talks of freedoms, but curtails those freedoms in practice (Cyprus), it talks of the freedoms of the Ukrainian protesters, but not of the Greek protesters, it is selective and always moves to the right.
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Emerging market currencies have clawed back some of this morning's early losses, but the Turkish lira is still down around 0.2% against the US dollar at 2.26.
The Hungarian forint is also down on the day, off 0.6% at 311 to the US dollar.
And the ruble was also hit, touching a record low against the euro and the lowest level since March 2009 against the dollar.
Just chatted with Jeremy Cook of World First, who explained that a range of factors are pushing down emerging market currencies.
For example, the Fed's continued taper, the weak Chinese manufacturing figures (see opening post), political unrest in Ukraine and Thailand, current account deficits in many countries.
This has combined into a perfect emerging market storm.
The Hungarian forint is likely to come under more pressure, Cook added, because its central bank had indicated it wanted to maintain loose monetary policy.
And the Turkey lira is still being hit because traders fear that the huge interest rate hikes on Tuesday night leave them with few other weapons now. Cook added:
There's a school of thought that they've fired their last bullet and not landed a fatal blow in the battle to protect their currency.
And with that, I"m handing over to Nick Fletcher for the rest of the day - starting with the US GDP data for the last quarter, any moment.... Cheers all. GW
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