Tuesday, February 24, 2009

Czech National Bank debunks lies about the Czech economy in the Western liberal media

The Czech National Bank just reacted to some incredibly idiotic articles written in some of the Western media, including the Financial Times and the Economist.

The situation is that the media have written that the Czech economy is in a bad shape while it is in a good shape, to say the least.

With the new flat tax and its low rate, the country has become a tax paradise, too. By the way, the Czech economy grew in every quarter so far, including Q4 of 2008: we have seen no recession so far and be sure that there are not too many countries that can boast the same record.

But some of the "numerical" misinformation is really stunning. In Scare warns of potential quake ahead in the Financial Times, a Stefan Wagstyl writes that Czech banks owe USD 192 billion to foreign banks.

In reality, the realistic figure is only USD 38 billion: a factor-of-five error! And this modest figure of 38 billion actually includes the Czech agents' debt to the banks mostly in CZK, so only a portion of this smaller figure is actually foreign debt.

Relatively to most civilized nations, the Czech Republic is basically a debt-free country. The figure of USD 192 billion used and misinterpreted in the text is essentially the sum of the balance sheets of Czech banks owned by foreign banks which is something completely different than a debt. Is that so difficult to understand for a tabloid that has "Financial" in its name?

The Economist wrote an article called "Argentina on the Danube?". The lies in this article are breathtaking, too. For example, they claim that currency exchange rate fluctuations are causing serious problems to consumers in our region because their mortgages are in euros or Swiss franks.

What a pile of rubbish: 99.9% of the total household borrowing by the Czechs is in the Czech currency so they have inflated this "problem" roughly by three orders of magnitude. Couldn't they have simply asked what the right number was and figure out that the article, starting with the very title, is complete crap?

The Czech National Bank clarifies many more numbers of this type. But I want to say some more general words. In recent years, I was stunned by the amount of flagrant shit about all kinds of questions that some Western media that would like to be called "prestigious" found ready to be printed.

Promotion of global warming hysteria and the hateful fairy-tales of crackpots of the Swolin type are among the "local" examples; plain misinformation about other countries - and I primarily mean negative articles about the New Europe (plus Russia) - belong among the "international" ones.

In all these cases and many others, the "journalists" are manifestly making a bet against someone or something - the energy industry, string theory, or the European emerging markets - and they use their influence (i.e. their ability to write hysterical rants) to damage the entities they have made bets against.

This has nothing to do with proper journalism.

Unfortunately, it seems that a large portion of the current "journalists" in The Economist, The Financial Times, CBS, NBC etc. are idiotic scumbags and liars promoting their own personal causes - instead of giving their readers useful and reliable information - but almost no one in the West seems to care.


The Economist has published a letter from Mr Singer of the Czech National Bank. The letter corrects the wrong statements from the Economist.


  1. I'm no conspiracy theory believer, but I would not be surprised to find out that this is a reaction to Václav Klaus's statements made lately. Neither the economist, nor FT have any spine left (i used to have subscriptions to both, not any more). Their views (especially the economist) are extremely biased and they are by no means liberal newspapers (sorry Mr. Motl), but advertising houses, trying to influence public opinion in some fishy directions (I can give many examples).
    But that's how the dogs are: the lousier, the louder.

  2. And to think that the Economist used to be a quality paper. I don't think you need to get upset about the treatment of eastern Europe though. Would you rather have the press coverage of say, the USA, Israel, Africa, Italy or Japan? The Economist even managed to bash Norway of all places for not being green of all things on, as you guess, rather flimsy evidence.