Prime minister warns of possible debt crisis

Now all the Serbs know the crude reality...Good luck Serbia your near future is dark ...

Where are these idiots who keep talking in this forum that EU/US/NATO are collapsing economically and Serbia and Russia are 21st centry's economical power?? these are only your wishes the reality is as your prime minister saying-crisis - means near collaps. soon you will have social unrest as serbian people can-not take it any more. at least this goverment is saying the truth to the people unlike you prevous ones.is about the time serbian politicians to work amd start talking business not nationalism...just imagine if Kosovo closes its borders like it did last year -June. 500,000,000 euro export to come down to zero Euro export?? what do you think would that help Serbian economy?

Your quirky economic ideas involve total isolation, Michael.

There would have to be controls on changing currency and that would give rise to a lucrative black market.

Given that most young Serbs care more about getting a new iphone than anything else, I doubt any plan like yours which would involve almost nothing being able to be imported (and no foreign vacations), would fly.

I could see how it makes some kind of sense looking in from the outside, though.

Of course, Serbia is bankrupt country.
All money spent on diseased 1389 dream and Republika Serpska.
Purse empty, like drunk man after drinking.
Now, Serbian leader like Roma beggar, begging Pasha Putin for few dinars.

Ironically, this is good news. Finally, the governments in the Balkans are dealing with real issues. Nationalism is losing appeal.

"The government should create dinars and give every man, woman and child 5,000 dinars a month for the next two years. This would make Serbia the richest and most dynamic country in eastern Europe. "
(Michael Thomas, 7 September 2012 17:08)

Yeah, the richest - in Dinars. And some years later, you remove three Zeroes from the Dinar banknotes and invent a new Dinar. This great idea worked so well not even 25 years ago in YU!

Dačić said that Serbia had the most unstable currency and lowest wages in the region, adding that business conditions could not even be compared to the countries in the region. Dačić well said and don't forget robbery of other ex Yugo company's by Serbia http://english.blic.rs/Economy/8032/Croatian-companies-shall-sue-Serbia-if-it-sells-their-property . That will haunt Serbia for stealing them Serbia will be on the hook for billions to repay back as the law suits make their way in the courts. Then again Dačić were you not in government when all that was going on and you were the top cop something definitely dose note square.

Where is Ari Gold when we need him ???Hope he will come up with some of his imaginations and fix this problem !!! ops he is fixing the EU/USA problems !!!

Who will Serbia borrow from? Not Britain, we’re broke. Not the US, it’s a failed state, as is the EU. What about private banks? Don’t make me laugh. Private banks are all bankrupt and are taking handouts from bankrupt western countries.

Private western banks, the Bank of England, the Fed in the US, and the European Central Bank all manufacture the money they need out of thin air. They create pounds, dollars and euros on their computer screens and transfer them to people and governments at interest. That’s right, they charge interest on money created by tapping on their computer keyboards.

There is nothing wrong with this; it is how all sovereign states should run their financial affairs.

Most of the government’s costs are in dinars (salaries, pensions, etc). The government could create dinars on its own computer screens and meet its responsibilities without cuts in services or tax increases.

Serbia "creating" new dinars, would that lead to inflation? Since 2008 the Americans have created $8 trillion dollars with causing inflation; the British another trillion pounds; and the EU a few trillion Euros. There is no inflation in any of these places.

The government should create dinars and give every man, woman and child 5,000 dinars a month for the next two years. This would make Serbia the richest and most dynamic country in eastern Europe.

Steps must be taken to stop western speculators from attacking the dinar; but this can be done as Malaysia has shown.

Comm. Parrisson

If you believe that inflation is caused by printing money (or creating it on a computer screen) then you will have to explain how the US can create $8 trillion over the last 4 years without causing inflation.

Inflation is almost always caused by floating exchange rates which allow George Soros and Goldman Sachs the opportunity to destroy a nation's currency. It is only very rarely caused by governments creating new money.

You clearly don't understand the dynamics of money and credit so you will not have any answers, but you should at least be asking yourself how the US can double its money supply in 4 years and yet cause no inflation. This is a remarkable fact and it should indicate to you that your understanding of inflation is wrong.

Dačić said that Serbia had the most unstable currency and lowest wages in the region, adding that business conditions could not even be compared to the countries in the region. Dačić well said and don't forget robbery of other ex Yugo company's by Serbia [link] . That will haunt Serbia for stealing them Serbia will be on the hook for billions to repay back as the law suits make their way in the courts. Then again Dačić were you not in government when all that was going on and you were the top cop something definitely dose note square.
(Lenard, 7 September 2012 19:02)
There is much more investment coming to Serbia than your Croatia. This morning on your beloved HTV they announced that there was ZERO investment arriving there. Your Croats sold most of Serbia’s property and spent that money and now they want more. They should go to court to get payment, but its funny how slow Croatia has been on that front.
But this tell you all you want to know about the economy of Croatia – Farmer asking Zagreb for assistance due to the drought – Zoran Milanovic said that the government had no money to help out ie “we are broke”..

You clearly don't understand the dynamics of money and credit so you will not have any answers, but you should at least be asking yourself how the US can double its money supply in 4 years and yet cause no inflation. This is a remarkable fact and it should indicate to you that your understanding of inflation is wrong.
(Michael Thomas, 8 September 2012 10:23)

I agree with your comments on inflation and money creation.A recent federal reserve audit shows the extent of money creation in UShttp://www.scribd.com/doc/60553686/GAO-Fed-Investigation#outer_page_144

The Serbian government could use state assets as capital and state revenues as deposits which could then be leveraged into loans thus supplying cheap credit to productive sectors of the economy.

Unfortunately not many people understand that the world's present ponzi monetary scheme woes are a direct result of the activities of private banks creating fiat money and charging governments interest for the privilege.

"It is estimated that the indebtedness rate is 50 percent of the GDP and that it could grow to 60 percent,” Dačić told reporters on Friday. "

Honestly I don't know how Serbia got into this bad situation -- but methinks still nowhere as bad as those Yankees. http://www.foxnews.com/opinion/2012/09/07/how-long-will-it-take-us-to-pay-back-16-trillion-in-debt/
http://www.federalbudget.com/

(naim neziri, 7 September 2012 17:30)

Yes it’s only in Albanian economics 101 where you can print and borrow as much as you like and with the wave of some pixy dust it’s all resolved - http://au.finance.yahoo.com/news/perfect-storm-warning-world-economy-203704970.html. Read it very carefully.
NATO was supposed to be the strongest army in the world that could not be defeated. That’s’ the BS peddled around by the US, but now we have NATO losing a war in Afghanistan and the US singlehandedly losing in Iraq. You don’t walk away from this without damage to your reputation, budget and capabilities. A recent article appeared in my regional paper where it said that once the US people find out that their country has retreated from Asia and the Pacific regions and the other places they have withdraw there will be a revolution.
“just imagine if Kosovo closes its borders like it did last year” Have you suffered a recent blow to the head because it would explain writing this rubbish. How is Kosovo going to affect Serbia? Kosovo produces NOTHING except mouths to feed, you don’t have to go through Kosovo to go anywhere.
Serbia borrowed heavily under Tadic with nothing to show for that money, and this is a warning to Serbs that things have to change, but there is an endless supply of pixy dust and the EU/US will just wave the magic wand and all will be better.

Leonidas is exactly right. The government could use its vast assets (land and property) as "capital" and against the "capital" it could issue hundreds of billions of dinars. This is not some crazy Serbian banking scheme, it is precisely how banks work in the West.

Will these new dinars cause inflation? That depends on who gets them and what they are used for. If this money is given to the political elite who use it to buy property and other existing assets, then it will cause inflation. If this money is used to build new roads, railways, schools and hospitals, then it will not cause inflation.

sj you have to stop watching Croatian sensational tabloid news its not good for you only extreme Serbian tabloid news. You probably missed the one that a double headed eagle was found in Serbia. The Serbian scientist said it is due to NATO depleted uranium ordinance sprayed all over Serbia. The eagle is the top bird on the food pyramid eating concentrated uranium radiation they said. Now Serbia will have a double headed eagle on its crest and flags. To remind Serbs not to eat radio active double headed eagles lol. sj if Serbia had only the problems that Croatia has Serbs would think they died and went to heaven.

Michael Thomas the only problem with your theory is that you are applying a country with the most traded currency (US dollar, actually the world's reserve currency) with the humble dinar.

We have had hyperinflation with the dinar before and it was nothing to do with speculation. The printing presses were in constant use in the 1990's which caused the dinar to collapse and there is no reason to think that any similar activity by the Serbian government would not cause the same result. Of course that period was also marked by economic sanctions, but sanctions by themselves do not cause hyperinflation, unless the government of the day decides to print money en masse.

Much nonsense is spoken by self professed economists and governments, but lets not forget past experience as a sign of future probabilities.

sj you have to stop watching Croatian sensational tabloid news its not good for you only extreme Serbian tabloid news. You probably missed the one that a double headed eagle was found in Serbia. The Serbian scientist said it is due to NATO depleted uranium ordinance sprayed all over Serbia. The eagle is the top bird on the food pyramid eating concentrated uranium radiation they said. Now Serbia will have a double headed eagle on its crest and flags. To remind Serbs not to eat radio active double headed eagles lol. sj if Serbia had only the problems that Croatia has Serbs would think they died and went to heaven.
(Lenard, 8 September 2012 21:40)
Lenard I have heard and saw Zoran Milanovic say to Framers representatives on four occasions that the Croatian Govenrment cannot help them out because they have no money to do so.
For the rest of your posting can you translate it into English please because as it stands its is gibberish.

Yeah, if only it were as easy as "quantitative easing".

For Serbia, I think that it will have to be a lot of borrowing for now, then investing those loans very wisely -- ie, stimulus projects that both put people to work on sustainable projects and help companies to create more attractive capacity.

However, I still wonder about labor cost. I realize that Serbian wages are already very low, but how do they compare to those in places like China, Phillipines, Burma, India or countries throughout Africa? Competing against a country like China could be extremely tough, as the work force there is both very cheap and well-equipped -- not to mention very large.

I know that some argue that what hinders investment in Serbia is more red tape and corruption than cost, but then why do places like African countries and Burma have relatively bright economic outlooks? Maybe there's less beauracracy in those places, but less corruption?

But getting back to borrowing, that will be tough, too, given the cost. It's one thing to rack up huge debt when you're a country like the US, but when you're a country like Serbia...

Yeah because that's what investors want to hear...

While I can appreciate his honesty on a very serious situation, no responsible statesman would make this kind of public statement, unless of course they want to lose their job... early.

(sj, 8 September 2012 12:33)

Ok, so you are one of these then.

Rubish. very simple you have things to sell we have cash and we buy. if we don't want it to buy it from you your factories closes down. and this helps Serbian economy??
We almost done that last year but our corrupted politician changed it because Serbia changed its mind and accepted Republic of Kosovo stamps.
why should we buy goods from enemy anyway?
US/UK/EU if they put a ban on China/India/Russian import for one year I really wanted to see how their economy would progress.
Nowdays money matters.

(naim neziri, 8 September 2012 23:38)
One of these what? You have an official unemployment rate of 45%, but the real rate is about 80%. You mean to tell me that the Serbian economy is based on selling goods to 2 million Albanians in Kosovo and if they stop then Serbia will go belly up. However, please go ahead buy elsewhere and see how much cheaper you get this stuff for. But I love it though the ban didn’t last that long otherwise no more food in Pristina, it had nothing to do with stamps mate. I also love how you put Kosovo as if it’s some kind of power when in fact it produces nothing except mouths to feed.
If they put a ban on then US/EU finished because if you have no heard I tell you this much. These economies are tied together especially the US/China. Have you never wondered why US dares not put a tax on Chinese imports because I can tell you that China does not play fair??? Because put a stop to China US economy goes belly up or what is left of it. Money mattered 5000 years ago it matters now.
The Us has retreated from South East Asia, the Pacific region and its in the leaving Japan and its now concentrated in the Middle East for its “Alamo”. 10 years ago the US had 50 000 troops in South Korea today its 20 000 and reducing. It will leave Diego Garcia by 2014.

bganon

The dinar is not the US dollar or the Euro, but it can work for Serbia.

Dinars created for Serbian people and businesses will circulate in Serbian. They will be used to employ local people who in turn will use their dinar wages to buy more Serbian-made goods.

Serbian industry and business will grow rapidly. This has nothing to do with the dollar or Euro or reserve currency status. The dinar is just a means of exchange for use in Serbia. If properly managed it can save Serbia.

Who will Serbia borrow from? Not Britain, we’re broke. Not the US, it’s a failed state, as is the EU. What about private banks? Don’t make me laugh. Private banks are all bankrupt and are taking handouts from bankrupt western countries.

Private western banks, the Bank of England, the Fed in the US, and the European Central Bank all manufacture the money they need out of thin air. They create pounds, dollars and euros on their computer screens and transfer them to people and governments at interest. That’s right, they charge interest on money created by tapping on their computer keyboards.

There is nothing wrong with this; it is how all sovereign states should run their financial affairs.

Most of the government’s costs are in dinars (salaries, pensions, etc). The government could create dinars on its own computer screens and meet its responsibilities without cuts in services or tax increases.

Serbia "creating" new dinars, would that lead to inflation? Since 2008 the Americans have created $8 trillion dollars with causing inflation; the British another trillion pounds; and the EU a few trillion Euros. There is no inflation in any of these places.

The government should create dinars and give every man, woman and child 5,000 dinars a month for the next two years. This would make Serbia the richest and most dynamic country in eastern Europe.

Steps must be taken to stop western speculators from attacking the dinar; but this can be done as Malaysia has shown.

Now all the Serbs know the crude reality...Good luck Serbia your near future is dark ...

Where are these idiots who keep talking in this forum that EU/US/NATO are collapsing economically and Serbia and Russia are 21st centry's economical power?? these are only your wishes the reality is as your prime minister saying-crisis - means near collaps. soon you will have social unrest as serbian people can-not take it any more. at least this goverment is saying the truth to the people unlike you prevous ones.is about the time serbian politicians to work amd start talking business not nationalism...just imagine if Kosovo closes its borders like it did last year -June. 500,000,000 euro export to come down to zero Euro export?? what do you think would that help Serbian economy?

Of course, Serbia is bankrupt country.
All money spent on diseased 1389 dream and Republika Serpska.
Purse empty, like drunk man after drinking.
Now, Serbian leader like Roma beggar, begging Pasha Putin for few dinars.

(naim neziri, 7 September 2012 17:30)

Yes it’s only in Albanian economics 101 where you can print and borrow as much as you like and with the wave of some pixy dust it’s all resolved - http://au.finance.yahoo.com/news/perfect-storm-warning-world-economy-203704970.html. Read it very carefully.
NATO was supposed to be the strongest army in the world that could not be defeated. That’s’ the BS peddled around by the US, but now we have NATO losing a war in Afghanistan and the US singlehandedly losing in Iraq. You don’t walk away from this without damage to your reputation, budget and capabilities. A recent article appeared in my regional paper where it said that once the US people find out that their country has retreated from Asia and the Pacific regions and the other places they have withdraw there will be a revolution.
“just imagine if Kosovo closes its borders like it did last year” Have you suffered a recent blow to the head because it would explain writing this rubbish. How is Kosovo going to affect Serbia? Kosovo produces NOTHING except mouths to feed, you don’t have to go through Kosovo to go anywhere.
Serbia borrowed heavily under Tadic with nothing to show for that money, and this is a warning to Serbs that things have to change, but there is an endless supply of pixy dust and the EU/US will just wave the magic wand and all will be better.

Your quirky economic ideas involve total isolation, Michael.

There would have to be controls on changing currency and that would give rise to a lucrative black market.

Given that most young Serbs care more about getting a new iphone than anything else, I doubt any plan like yours which would involve almost nothing being able to be imported (and no foreign vacations), would fly.

I could see how it makes some kind of sense looking in from the outside, though.

"The government should create dinars and give every man, woman and child 5,000 dinars a month for the next two years. This would make Serbia the richest and most dynamic country in eastern Europe. "
(Michael Thomas, 7 September 2012 17:08)

Yeah, the richest - in Dinars. And some years later, you remove three Zeroes from the Dinar banknotes and invent a new Dinar. This great idea worked so well not even 25 years ago in YU!

Comm. Parrisson

If you believe that inflation is caused by printing money (or creating it on a computer screen) then you will have to explain how the US can create $8 trillion over the last 4 years without causing inflation.

Inflation is almost always caused by floating exchange rates which allow George Soros and Goldman Sachs the opportunity to destroy a nation's currency. It is only very rarely caused by governments creating new money.

You clearly don't understand the dynamics of money and credit so you will not have any answers, but you should at least be asking yourself how the US can double its money supply in 4 years and yet cause no inflation. This is a remarkable fact and it should indicate to you that your understanding of inflation is wrong.

Dačić said that Serbia had the most unstable currency and lowest wages in the region, adding that business conditions could not even be compared to the countries in the region. Dačić well said and don't forget robbery of other ex Yugo company's by Serbia [link] . That will haunt Serbia for stealing them Serbia will be on the hook for billions to repay back as the law suits make their way in the courts. Then again Dačić were you not in government when all that was going on and you were the top cop something definitely dose note square.
(Lenard, 7 September 2012 19:02)
There is much more investment coming to Serbia than your Croatia. This morning on your beloved HTV they announced that there was ZERO investment arriving there. Your Croats sold most of Serbia’s property and spent that money and now they want more. They should go to court to get payment, but its funny how slow Croatia has been on that front.
But this tell you all you want to know about the economy of Croatia – Farmer asking Zagreb for assistance due to the drought – Zoran Milanovic said that the government had no money to help out ie “we are broke”..

Dačić said that Serbia had the most unstable currency and lowest wages in the region, adding that business conditions could not even be compared to the countries in the region. Dačić well said and don't forget robbery of other ex Yugo company's by Serbia http://english.blic.rs/Economy/8032/Croatian-companies-shall-sue-Serbia-if-it-sells-their-property . That will haunt Serbia for stealing them Serbia will be on the hook for billions to repay back as the law suits make their way in the courts. Then again Dačić were you not in government when all that was going on and you were the top cop something definitely dose note square.

Ironically, this is good news. Finally, the governments in the Balkans are dealing with real issues. Nationalism is losing appeal.

"It is estimated that the indebtedness rate is 50 percent of the GDP and that it could grow to 60 percent,” Dačić told reporters on Friday. "

Honestly I don't know how Serbia got into this bad situation -- but methinks still nowhere as bad as those Yankees. http://www.foxnews.com/opinion/2012/09/07/how-long-will-it-take-us-to-pay-back-16-trillion-in-debt/
http://www.federalbudget.com/

You clearly don't understand the dynamics of money and credit so you will not have any answers, but you should at least be asking yourself how the US can double its money supply in 4 years and yet cause no inflation. This is a remarkable fact and it should indicate to you that your understanding of inflation is wrong.
(Michael Thomas, 8 September 2012 10:23)

I agree with your comments on inflation and money creation.A recent federal reserve audit shows the extent of money creation in UShttp://www.scribd.com/doc/60553686/GAO-Fed-Investigation#outer_page_144

The Serbian government could use state assets as capital and state revenues as deposits which could then be leveraged into loans thus supplying cheap credit to productive sectors of the economy.

Unfortunately not many people understand that the world's present ponzi monetary scheme woes are a direct result of the activities of private banks creating fiat money and charging governments interest for the privilege.

Leonidas is exactly right. The government could use its vast assets (land and property) as "capital" and against the "capital" it could issue hundreds of billions of dinars. This is not some crazy Serbian banking scheme, it is precisely how banks work in the West.

Will these new dinars cause inflation? That depends on who gets them and what they are used for. If this money is given to the political elite who use it to buy property and other existing assets, then it will cause inflation. If this money is used to build new roads, railways, schools and hospitals, then it will not cause inflation.

Yeah, if only it were as easy as "quantitative easing".

For Serbia, I think that it will have to be a lot of borrowing for now, then investing those loans very wisely -- ie, stimulus projects that both put people to work on sustainable projects and help companies to create more attractive capacity.

However, I still wonder about labor cost. I realize that Serbian wages are already very low, but how do they compare to those in places like China, Phillipines, Burma, India or countries throughout Africa? Competing against a country like China could be extremely tough, as the work force there is both very cheap and well-equipped -- not to mention very large.

I know that some argue that what hinders investment in Serbia is more red tape and corruption than cost, but then why do places like African countries and Burma have relatively bright economic outlooks? Maybe there's less beauracracy in those places, but less corruption?

But getting back to borrowing, that will be tough, too, given the cost. It's one thing to rack up huge debt when you're a country like the US, but when you're a country like Serbia...

Where is Ari Gold when we need him ???Hope he will come up with some of his imaginations and fix this problem !!! ops he is fixing the EU/USA problems !!!

Yeah because that's what investors want to hear...

While I can appreciate his honesty on a very serious situation, no responsible statesman would make this kind of public statement, unless of course they want to lose their job... early.

sj you have to stop watching Croatian sensational tabloid news its not good for you only extreme Serbian tabloid news. You probably missed the one that a double headed eagle was found in Serbia. The Serbian scientist said it is due to NATO depleted uranium ordinance sprayed all over Serbia. The eagle is the top bird on the food pyramid eating concentrated uranium radiation they said. Now Serbia will have a double headed eagle on its crest and flags. To remind Serbs not to eat radio active double headed eagles lol. sj if Serbia had only the problems that Croatia has Serbs would think they died and went to heaven.
(Lenard, 8 September 2012 21:40)
Lenard I have heard and saw Zoran Milanovic say to Framers representatives on four occasions that the Croatian Govenrment cannot help them out because they have no money to do so.
For the rest of your posting can you translate it into English please because as it stands its is gibberish.

(naim neziri, 8 September 2012 23:38)
One of these what? You have an official unemployment rate of 45%, but the real rate is about 80%. You mean to tell me that the Serbian economy is based on selling goods to 2 million Albanians in Kosovo and if they stop then Serbia will go belly up. However, please go ahead buy elsewhere and see how much cheaper you get this stuff for. But I love it though the ban didn’t last that long otherwise no more food in Pristina, it had nothing to do with stamps mate. I also love how you put Kosovo as if it’s some kind of power when in fact it produces nothing except mouths to feed.
If they put a ban on then US/EU finished because if you have no heard I tell you this much. These economies are tied together especially the US/China. Have you never wondered why US dares not put a tax on Chinese imports because I can tell you that China does not play fair??? Because put a stop to China US economy goes belly up or what is left of it. Money mattered 5000 years ago it matters now.
The Us has retreated from South East Asia, the Pacific region and its in the leaving Japan and its now concentrated in the Middle East for its “Alamo”. 10 years ago the US had 50 000 troops in South Korea today its 20 000 and reducing. It will leave Diego Garcia by 2014.

bganon

The dinar is not the US dollar or the Euro, but it can work for Serbia.

Dinars created for Serbian people and businesses will circulate in Serbian. They will be used to employ local people who in turn will use their dinar wages to buy more Serbian-made goods.

Serbian industry and business will grow rapidly. This has nothing to do with the dollar or Euro or reserve currency status. The dinar is just a means of exchange for use in Serbia. If properly managed it can save Serbia.

Michael Thomas the only problem with your theory is that you are applying a country with the most traded currency (US dollar, actually the world's reserve currency) with the humble dinar.

We have had hyperinflation with the dinar before and it was nothing to do with speculation. The printing presses were in constant use in the 1990's which caused the dinar to collapse and there is no reason to think that any similar activity by the Serbian government would not cause the same result. Of course that period was also marked by economic sanctions, but sanctions by themselves do not cause hyperinflation, unless the government of the day decides to print money en masse.

Much nonsense is spoken by self professed economists and governments, but lets not forget past experience as a sign of future probabilities.

sj you have to stop watching Croatian sensational tabloid news its not good for you only extreme Serbian tabloid news. You probably missed the one that a double headed eagle was found in Serbia. The Serbian scientist said it is due to NATO depleted uranium ordinance sprayed all over Serbia. The eagle is the top bird on the food pyramid eating concentrated uranium radiation they said. Now Serbia will have a double headed eagle on its crest and flags. To remind Serbs not to eat radio active double headed eagles lol. sj if Serbia had only the problems that Croatia has Serbs would think they died and went to heaven.

(sj, 8 September 2012 12:33)

Ok, so you are one of these then.

Rubish. very simple you have things to sell we have cash and we buy. if we don't want it to buy it from you your factories closes down. and this helps Serbian economy??
We almost done that last year but our corrupted politician changed it because Serbia changed its mind and accepted Republic of Kosovo stamps.
why should we buy goods from enemy anyway?
US/UK/EU if they put a ban on China/India/Russian import for one year I really wanted to see how their economy would progress.
Nowdays money matters.