Re: [A-List] Re: Return to an old standard

[Waistline2@xxxxxxx]

>Somehow I knew Anne would respond. This is meant as a compliment, of course,as my guess was based on the intensity of your replies -- full of an idealism which I find common among Americans.

>I however think that the prosperity that America enjoys is not due to the dollar reserve currency system. That is a phenomenon of the last two decades. And, even then, it would not have been so if the "terms of trade" were different from what they are now. The dollar hegemony would not be exploitative if the exporting countries themselves did not price themselves so low. The trade would not be predatory if the value placed on foreign labor is miniscule compared to the value placed on US labor. Things would certainly be different if exports to the US were done at a parity exchange rate for each dollar net saved is effectively a claim on any US asset. Let us not bash the US unfairly. When Thailand outbid the Philippines for a General Motors plant, giving a 10 year tax free incentive, it was their choice to be exploited.<

Reply


I believe - actually I know, you are inaccurate. The prosperity America enjoys by way of currecny is based in the post Second World Imperial War era and written into law as the Bretton-Wood Agreement and implemented by way of the Marshall Plan. This was the better part of 50 years ago and not two decades. 

Thirty years ago - not two decades, President Nixon abolished the Bretton Wood Agreement and floated the American dollar as the currency in which others expressed their value. This meant that the US dollar was no longed pegged to gold and Japan at the time could not have the massive amounts of US currency it accumulated converted into gold. When Japan demanded conversion, Nixon struck the deal with the Saudis to make the purchase of oil payable in dollars and this was called the "energy crisis" in America. The incentive was that the US agreed with raising the price of oil, as long as it had to be purchased with American dollars and these dollars would be funneled back into America in return fore infrastructure development in the Middle East. 

The problem is that when you speak of prosperity of Americans what portion of the population are you taking about? 

Exactly whom are you talking about? 

Melvin P.