Tag Archives: Monetary policy

The Rise And Fall And Rise And Fall Of King Dollar, Part 2


BOOK REVIEW

Wealth of Nations, Author: Adam Smith.

Money, Gold, and History, Author: Lewis E. Lehrman.

The Economic Consequences of the Peace, Author: John Maynard Keynes.


By Ralph Benko – The mechanics of the reserve currency system preempt these funds’ ready availability for “the maintenance of industry.”

The mechanics of the dollar as a reserve asset, therefore, finance bigger government while insidiously preempting productivity, jobs, and equitable prosperity.

As Steve Forbes pithily puts it, “You’ve got to get the money right.” 

Time to lift the reserve currency curse. Time to fix the dollar. more> http://tinyurl.com/men5vk7

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The Wonks Battle for the Fed


By Noah Smith – These days, essentially all of the pre-2008 models have fallen out of favor, replaced by models where finance is the key. Most people would agree that’s a good thing.

But those models are going to have just as hard a time getting conclusive support from the data, because there just isn’t much data.

So again, conclusions about whether the Fed should print money and buy bonds to fight recessions will come down to intuition. As Robert Waldmann says, “The models change but the policy proposals remain the same.” more> http://tinyurl.com/k2vkost

The Rise And Fall And Rise And Fall Of King Dollar


BOOK REVIEW

Money: How the Destruction of the Dollar Threatens the Global Economy and What We Can Do About It, Authors: Steve Forbes and Elizabeth Ames.

The Money Trap, Author: Robert Pringle.

By Ralph Benko – We live in a world monetary system that makes the U.S. dollar its official reserve currency.

About 60%  of international central bank reserves are Yankee dollars. Some, both right and left, in America and abroad, consider the reserve currency status of the dollar a bug in the software of our world monetary system.

Getting this fixed is, in the opinion of some consequential thinkers, of capital importance for the generation of quality jobs, and equitable prosperity, in America and the world. more> http://tinyurl.com/kgmlxya

Secret Fed Tapes Recorded Goldman’s Capital Game


By Matt Levine – Do read/listen to the story though! It’s fascinating …

… wait. Is that not how it’s supposed to go?

One conclusion you might draw from the tapes is that the regulators and the banks had a very different conception of what social practice they were engaged in.

Goldman was helping Santander play a game against its regulators, while the New York Fed just wanted to be friends with Goldman and not make too much trouble.

It certainly makes it easier to win a game if the other side doesn’t know it’s playing. more> http://tinyurl.com/lq9l238

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Has Capitalism Reached A Turning Point?


By Steve Denning – The entrenched interests are mutually reinforcing, as society as a whole has come to accept the practices and ideology of 20th Century management as inevitable.

The C-suite is offered extraordinary compensation by their boards for implementing the practices. Business schools teach their students how do it.

Institutional shareholders are complicit. Regulators pursue individual wrong-doing rather than addressing systemic failure. Rating agencies reward malfeasance. Analysts applaud short-term gains and mostly ignore long-term rot.

Politicians, lavished with campaign contributions, stand by and watch. In such a context, it isn’t easy for any individual business leader to take a stand and say: this is simply not right.

It’s the entire society that needs to change. more> http://tinyurl.com/p4as2xl

Argentina’s Exchange Offer May Not Be Clever Enough Yet


By Matt Levine – And the other day Argentina’s government introduced a bill in parliament to do a debt exchange to get around Judge Griesa’s orders, which he specifically told it not to do.

So yesterday (Aug 21) the holdout bondholders went to court to try to get Judge Griesa to hold Argentina in contempt, and Judge Griesa basically said (pdf), well, this is pretty contemptuous, but he still didn’t hold Argentina in contempt.

Because what good will that do? They’ve ignored him so far. more> http://tinyurl.com/ld2uzqs

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Russia Sanctions Accelerate Risk to Dollar Dominance


By Rachel Evans – While no one’s suggesting the dollar will lose its status as the main currency of business any time soon, its dominance is ebbing.

The greenback’s share of global reserves has already shrunk to under 61 percent from more than 72 percent in 2001.

The drumbeat has only gotten louder since the financial crisis in 2008, an event that began in the U.S. when subprime-mortgage loans soured, and the largest emerging-market nations including Russia have vowed to conduct more business in their currencies.

“The crisis created a rethink of the dollar-denominated world that we live in,” said Joseph Quinlan, chief market strategist at Bank of America Corp.’s U.S. Trust, which oversees about $380 billion. “This nasty turn between Russia and the West related to sanctions, that can be an accelerator toward a more multicurrency world.” more> http://tinyurl.com/law7nnm