"For a quarter-century after World War II, money was based on a loose version of the gold standard. ... Then in 1971 Richard Nixon balked at the high interest rates necessary to maintain the dollar's link to gold. ... The Fed has kept a lid on inflation, but the dollar's vulnerability is caused by debt--the debt of the federal government and of American households. ... So the world faces a dilemma. ... But the world may also draw the lesson that an alternative global currency needs to be the long-term goal. Households don't like saving in a currency that won't hold its value. Companies don't like building global supply chains based on a unit of account that fluctuates unstably. ... But one of my colleagues at the Council on Foreign Relations, Benn Steil [BS], has proposed another option--a privately created currency that would confer an inflation-proof claim on gold or a basket of commodities. Steil calls his idea 'digital gold' which has a nice back-to-the-future ring," Sebastian Mallaby (SM) at http://www.washingtonpost.com/, 12 November.
If SM only knew. "The Fed has kept a lid on inflation". Huh? SM and I live in alternative worlds. Is digital gold, "paper gold", or Special Drawing Rights, created in 1981? As to an "inflation-proof" claim, "Nevertheless, I firmly believe that the time must ultimately come when the business world will see that a monetary unit stable in purchasing power is a necessity of civilization. Without it every monetary relation involving time, especially long time contracts is thrown into confusion". Who wrote that? Irving Fisher, Yale economics professor in the NYT, 18 October 1912. 1912?! Yes.
Since BS wants privately created money, is he aping Fredrich von Hayek's "free choice in currency" concept without attribution? There is no gold or commodity based money that will stand until government spending is reduced. Is BS aware of the "gold clause" Supreme Court decisions of the 1930s? When it is expedient for Uncle Sam to abrogate private contracts he will. Who is BS anyway? Is he just BS? He can't be, he has an Oxford PhD.
You can buy gold coins or ETFs now. As you can futures contracts on commodity price indexes. Does BS know this? Goldman Sachs (GS), not them again, has had a futures contract based on 24 commodities since 1992, GSCI. Recent month price, 564. Perhaps BS has been out of touch for the last 15 years. Or he's looking to work for GS and market GS products. See my 2 November post.
If SM only knew. "The Fed has kept a lid on inflation". Huh? SM and I live in alternative worlds. Is digital gold, "paper gold", or Special Drawing Rights, created in 1981? As to an "inflation-proof" claim, "Nevertheless, I firmly believe that the time must ultimately come when the business world will see that a monetary unit stable in purchasing power is a necessity of civilization. Without it every monetary relation involving time, especially long time contracts is thrown into confusion". Who wrote that? Irving Fisher, Yale economics professor in the NYT, 18 October 1912. 1912?! Yes.
Since BS wants privately created money, is he aping Fredrich von Hayek's "free choice in currency" concept without attribution? There is no gold or commodity based money that will stand until government spending is reduced. Is BS aware of the "gold clause" Supreme Court decisions of the 1930s? When it is expedient for Uncle Sam to abrogate private contracts he will. Who is BS anyway? Is he just BS? He can't be, he has an Oxford PhD.
You can buy gold coins or ETFs now. As you can futures contracts on commodity price indexes. Does BS know this? Goldman Sachs (GS), not them again, has had a futures contract based on 24 commodities since 1992, GSCI. Recent month price, 564. Perhaps BS has been out of touch for the last 15 years. Or he's looking to work for GS and market GS products. See my 2 November post.
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