Should Jamaica adopt an international currency

[niceniss]

Re: Should Jamaica adopt an international currency

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btw...i can find no info on the excess liquidity being due to governement printing/spending

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not everyting deh pon di intanet, call di gleaner or perkins online or whichever local media for the period where the printing occurred.

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so yuh mean a big story like this wasnt carried in the gleaner....only perkins did know bout it? .and none of the post crisis anaylsis picked it up either?

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did u actually read what I said? [img]/forums/images/graemlins/70456-eyebrows.gif[/img]

u did deh a farrin during the period mek u neva know?

[Morpheous]

Re: Should Jamaica adopt an international currency

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The concern should be as long as the economy is thriving and successful with a reasonably valued currency then everything is alright.


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so what is a resonably valued currency for jamaica?
give me a number an explain how you arrive at that.

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That's a question fi the Jamaican finance minister or chancellor if unnuh hab chancellor.

Rich, tap nitpick and admit sey the devalue of jamaican currency affect people lives and the ecoonomy man cho [img]/forums/images/graemlins/70456-eyebrows.gif[/img]

Mi layout the facts, evidence and history before you aredy wid sources fi yuh read. Yuh tubban eh sar. [img]/forums/images/graemlins/tongue.gif[/img] [img]/forums/images/graemlins/grin.gif[/img]

[Tuff Gong]

Re: Should Jamaica adopt an international currency

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What does it say about Dr. Clueless, PJoke's and by extension the GOJ's role in the whole affair?


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that the liberalization though timely was no properly regulated which allowed the institutions to overextend.


btw...i can find no info on the excess liquidity being due to governement printing/spending

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I put it to that you are not looking far and hard enough, even now, the words excess liquidity is still used in financial news and reports today. Dr. Davies himself claimed he was mopping up excess liquidity in the system, but he failed to mentioned that the primary caused of this was the millions of printed currency, let loose to create an air of prosperity for the previous National Elections.

Of course the PNP has a history. In the late 70s I used to broker sales between the National Commercial Bank (A Government controlled Bank, Nationalized by the PNP in the mid-70s) and informal currency dealers. This continued until Eddie Blinds came to power. After Eddie the flood gates on irrationality was opened again and all kinds of lawlessness and lacks controls crept back into the system.

Even people who reside abroad were sending money to Jamaica because the interest rates were so attractive based on the Dr. Clueless efforts to mop up excess liquidity. A lot of those Diaspora investors went down with the crash and burn of the Financial and business sector.

Now to the extent that you cannot find any evidence is to the credit to the GOJ's effort to cover its tracks, but a simple look a the newspaper reports of that era will no doubts tell a different tale.

[RichD]

Re: Should Jamaica adopt an international currency

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Rich, tap nitpick and admit sey the devalue of jamaican currency affect people lives and the ecoonomy man cho [img]/forums/images/graemlins/70456-eyebrows.gif[/img]



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you cleary have missed completly what i have been arguing for the past few days. you going back in history an talking about the effect raod devaluatin due to an unstable currency.


i said stability is important...meaning you have to avoid devaluation however once devaluation has occured and the currnecy has stabilized and slaries and prices have adjusted..it become irrelvent what the exchange rate is at that point....as slong as you are able to keep the currency stable at the new level.

[Tuff Gong]

Re: Should Jamaica adopt an international currency

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Rich, tap nitpick and admit sey the devalue of jamaican currency affect people lives and the ecoonomy man cho [img]/forums/images/graemlins/70456-eyebrows.gif[/img]



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you cleary have missed completly what i have been arguing for the past few days. you going back in history an talking about the effect raod devaluatin due to an unstable currency.


i said stability is important...meaning you have to avoid devaluation however once devaluation has occured and the currnecy has stabilized and slaries and prices have adjusted..it become irrelvent what the exchange rate is at that point....as slong as you are able to keep the currency stable at the new level.

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.... and Rich you are clearly refusing to see the other aspect of this. Theoretically you are correct but dealing with Jamaica, even though the $Ja has being stabilized it is at great expense and the ordinary man in the street is not insulated from currency calculations as the expanded basket of goods and services in Jamaica will contain mostly imports and the joe/jane public is actively involved in the importation of these goods and services, hence the need to make a calculation.

Of course to god back slightly to your bankers collective failure of fiduciary duties, what you are asking us to accept is an Inelegant Proof. This is not very likely, each bank, financial institution and business could not have been so unlucky as to have been saddle all at one time with bad managers.

[Tuff Gong]

Re: Should Jamaica adopt an international currency

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What does it say about Dr. Clueless, PJoke's and by extension the GOJ's role in the whole affair?


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that the liberalization though timely was no properly regulated which allowed the institutions to overextend.


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I hear this argument all the time what Liberalization?
Here a dude who makes the same claim, although he asks what Donika, others, and I am asking let have the truth, the whole truth and nothing but the truth.

Let's have a study of 1990s financial sector collapse

Rev Raulston Nembhard
Saturday, May 27, 2006

No single factor can be blamed for the collapse of the financial sector in the 1990s. To date, the government has not carried out a comprehensive study of the reasons for the collapse. Indeed, there seems to be a studied reluctance on their part to do so, despite calls from the Opposition and other interest groups for this to be done.

Without any detailed study, it would seem that the problems in the sector were of a systemic nature. Many analysts are agreed that there are two factors that relate to this systemic decline. The first was the premature liberalisation of the financial sector under the late Michael Manley. It is clear that the necessary infrastructure to support the liberalisation were not in place. The necessary checks and balances were either overlooked or not seen.

Second, the macroeconomic policies pursued by government with high interest rates being used to defend an elusive exchange rate sounded the death knell of the sector.
Inflation spiralled out of control as interest rates reached into the stratosphere. Many businesses already operating on the margins were further marginalised and driven into oblivion.
Large indigenous enterprises such as Mutual Life that had weathered years of financial shocks soon buckled under the weight of the high cost of money and in many instances mismatched investments in the real estate sector. One by one financial enterprises fell: Island Life, Mutual Life, the Eagle Network, Century National Bank, Citizens Bank, Horizon, Workers Bank and a host of other small- and medium-scale enterprises. Large banks like the National Commercial Bank buckled but were shored up by government for reasons best known to themselves.

Since there seemed to have been a systemic crisis in the sector at the time of the sector's collapse, it would be disingenuous for the minister of finance to hold up largely foreign-owned banks such as Scotiabank and the Canadian Imperial Bank of Commerce (now First Caribbean International Bank) as examples of banks that demonstrated fiscal probity. It would be even more disingenuous to use these banks as models by which the government can exonerate itself for its fair share of culpability in the sector's collapse. So many institutions, including Mutual Life, could not have collapsed for the reason advanced by the minister.
The fact that so many collapsed when they did and at the rate they did, is a clear indication of a systemic "dis-ease" in the sector.

If the argument for a systemic crisis in the sector can be sustained, Mr Minister, it would have been unethical for you to use the sanctuary of Parliament, however legal your grounds, to excoriate Dr Chen-Young as you did recently in the budget debate. To some of us, it appears that in the government's attempt to "save" the sector, institutions were cherry-picked to be saved. Perhaps these institutions were more worthy of the government's generosity than others.
This has left a host of questions to be answered. Nothing but a full, impartial study of the collapse of the sector can suffice in giving the answers that are required. There are many people to whom I speak in the so-called diaspora for whom the collapse of the sector is a haunting memory. Many are averse to investing in Jamaica as a result. I often wonder how much foreign direct investment (FDI) has been stymied by people not knowing exactly what happened. A clear, comprehensive and independent study would go a far way in allaying fears in this regard.

In the meantime, the minister would be well advised to tone down his rhetoric and be more humble in acknowledging that mistakes were made in the management of the financial sector, especially under his stewardship. As human beings, we all have the capacity to make mistakes. If we make them, we correct them and then move on. What do you think, Mr Minister?

Rev Raulston Nembhard is a freelance writer out of
Orlando, Florida.
[email protected]
Let's have a study of 1990s financial sector collapse