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Strong sheckel sends Israeli economy into free fall

During the last year, shekel rose by a third to dollar, a whopping increase which trashed Israeli non-high tech export. Though the shekel increase was triggered by the falling dollar, the underlying reason is the extreme weakness of consumer market in Israel.
Israel tops the world list of social inequality: much of the Jewish population is pauperized and even the middle class is poor by the Western standards. Accordingly, consumer imports in Israel are very low.
When rich Jews and a few large foreign investors bring their money into Israel in the US dollars, there is no offsetting increase in consumer imports, and therefore shekel rises. Such rise, however, is not a sign of healthy economy but rather of the highly stratified oligarchic one.
Central Bank of Israel lacks sufficient reserves to offset the inflow of dollars into the country. To stem the rising shekel, Israel must introduce emergency controls on non-productive foreign investments. Restrict or heavily tax purchases of real estate in Israel by foreigners. Ban very large remittances to Israel by Jews who earn their money abroad (the Gaydamak syndrome). Stop foreign aid and Israeli Bonds. Closely evaluate large foreign investments in Israel, only allowing them in the productive sphere rather than passive projects like real estate development.
Oligarchic lobby in the government would likely block any such moves.

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Comments

Are you crazy? What kind of reactionary economic plan is this? to many people bringing cash into your country simply cant be a problem, it flies in the face of all broke people logic, rich people should move in.
If the government owns every square inch of the land then have them sell new communities within the immigrants expected ability while making a hefty profit on the land instead of taxes.
Also since so many Jerusalemites, and other Israelis are recieving gov. assistance move them to nice new neighberhoods outside of developable inner city land, and build nice new buildings and settlements and sell them to new olem.

Oren Florida 02 June 2008

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