Mish's Global Economic Trend Analysis

Reader From Budapest Explains Hungary's Refugee Predicament

Posted: 05 Sep 2015 06:31 PM PDT

In response to US Role in Europe's Refugee Crisis; Migration in Numbers a reader Peter from Budapest explains Hungary's predicament in the European refugee mess. Peter Writes ....

Hi Mish,

I writing to you from Budapest. Let me give you a brief take on the refugee crisis.

There's been an average influx of about a 1000 or more people on Hungary's Southern border for the past several month. This number is rising.

By EU/Schengen rules, refugees must register before they can go on. Countries that do not abide by the rules risk their Schengen status.

Moreover, if Hungary simply sends them on, the refugees can legally be sent back to Hungary.

In short, unless the migrants' route towards Germany is cleared, they are quite possible Hungary's problem. Hungary has a population of about 10 million people, and by the end of August, the number of refugees surpassed 120,000.

In short, the Hungarian government is between a rock and a hard place. It may seem the solution is to send them on, but as explained above, this can backfire.

Cheers,
Peter

The main points of entry are Hungary, Greece, and Italy and those countries are the ones struggling most under the weight of existing rules.

The heart of the matter is open borders. The borders should be open to every county in the EU, but to open the borders to all takers from Syria, African nations, etc., is 100% guaranteed to cause a problem.

And it has. Australia's solution was to send them back. Europe eventually faces the same decision.

Mike "Mish" Shedlock

G20 Hypocrites Want to "Double Down Against Competitive Currency Devaluation"

Posted: 05 Sep 2015 10:07 AM PDT

In a joint meeting of totally useless finance and labour ministers, the G20 Seeks to 'Double Down' Against Devaluation

There is a shared belief among the members of the Group of 20 leading economies in the need to "double down" against competitive currency devaluation and avoid it in both policy and language, a senior U.S. Treasury official said on Saturday.

Speaking to reporters on the sidelines of the G20 meeting of central bankers and finance ministers in the Turkish capital Ankara, the official said the final communique from the meeting was expected to address competitive devaluation, where countries attempt to drive down a currency to boost exports.

"There is a shared sense that the G20 needs to double down on its principle that competitive devaluation is a bad thing."

Currencies have come into sharp focus at the G20 meeting, after China devalued the yuan in a surprise move in August, sparking market turmoil.

G20 Hypocrites Translated

The G20 believes the yuan should go higher.

That's quite a collection of clowns all in one place. All they lack is ample makeup. If those hypocrites actually believed what they stated, QE would go out the window in a second.

ECB president Mario Draghi is the top clown at the moment. He hopes to drive the euro lower to increase inflation. His method of choice is QE rather than a peg or fixed rate of exchange.

For some reason QE is an acceptable means to drive a currency lower, but China's peg is not. The irony is the yuan might plunge if China floated it as the G20 and US treasury wants.

Mike "Mish" Shedlock

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Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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