Sunday, July 06, 2008

On Speculation

Cross-posted on JoeSettler

Stanley Fisher has finally raised the question of what is hiding behind the strange momentum of the Shekel.

It is my opinion, that overall, it is not good for the Israeli economy that the shekel is so strong in relation to the dollar. But more importantly, to this layman, it doesn’t make sense that the shekel is so strong compared to the dollar. That the dollar started to finally weaken when there was thought that Olmert might resign, and then slid back up, when we realized that he wouldn’t, may be entirely coincidental – or not.

Fisher discussed the rising inflation and rising shekel and recommended no government moves to correct it such as ceilings or controls, as they would just cause more damage. He is probably right, but read the next sentence…

Fisher said something I found to be extremely scary.

"The recent sharp appreciation of the shekel was unexpected, and although we have not found any evidence for claims of speculative activity in the exchange rate, it is hard to explain it," said Fischer.

In short, Fisher doesn’t understand why the shekel has gotten so strong.

But, Fisher suspects that someone may be playing with the shekel, but he can’t find any definitive proof of it (yet).

Well Stanley, you may be catching on, and in that case the government must take the right step to protect itself.

And I want to throw the name George Soros at you as suspect number 1.

I’ve discussed Soros’s interest in the Shekel in October last year. And his interest in Israeli politics which can be summed up in one sentence he said There are strong voices arguing that Israel must never negotiate from a position of weakness. They are wrong.”

Soros has managed to bring down the economies of countries and major banks with his currency speculation; His strong, radical-left agenda, and anti-Zionist position would make Israel a delightful target for his currency speculations and dangerous philosophy that Israel should be weak.

And that is what JoeSettler thinks is going on right now.

So Stanley, start considering the obvious, and start taking measures to protect us against from the crash that Soros may have planned for us.

Wherever I am, my blog turns towards Eretz Yisrael טובה הארץ מאד מאד


Anonymous said...

Some people think it could be Martin Schlaf, instead of George Soros.

Also an option, as he is already openly involved in a lot of political dealings in Israel, and has his own agenda he is pushing.

Anonymous said...

Actually, an article this morning spoke of evidence that the exchange rate is due to speculation. It's not that we don't know - it is that we don't know what to do about it.

Here's the link:,7340,L-3564341,00.html

Lurker said...

The link to the Fisher article is broken.

I admit to being an am ha'aretz in matters of economics, but isn't "inflation" supposed to be when the currency gets weak, not strong?

Miriam said...

How can anybody think person X will do better if said perosn is weak?!

Anonymous said...

I'm an am ha'aretz here too,, but I assume inflation is when prices of everything local keeps going up and up, and the shekel can buy less and less locally.

The shekel is strangely stronger only in relation to the dollar, which is bad because a significant part of our economy is imports, exports and tourism, all linked to the dollar, so dollar prices need to be raised significantly in order to reach their former shekel equivalent, which are worth less because of rising prices.

A hotel rate of $100 a night a year ago now needs to be $130 to bring in the same shekels, but the shekel now buys less (food, electricity, etc.), so the rate would have to be at least $140-$150 to compensate for the inflation.

If I sell Israeli oranges overseas at $1000 a container, the same increases would be true if I want to exchange it into the equivalent shekels for local use.

And if I'm an importer, true the price of the products have dropped significantly, but I will need to sell more of the same to make up for the price drop (if I lower the price at all). But in this economy, who is buying more?

Anonymous said...

miriam: Someone who wants to force someone else to do his will against their wishes and best interest.

Soros leans to the far, far left on issues of Israel.

An Israel, in a position where it is forced to abdicate and concede to Arab and world demands is what he wants, because he apparently wants the same as they do.

The best way to make that happen is if Israel is in a weak negotiating position.

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