Re: MONETARY QUESTIONS

[wpc@xxxxxxxxxxxxxxxxx (Paul Cockshott)]

>Why is dollar the favourite money for trade exchanges ,is it a political
>imposition?

It is probably a consequence of the still
dominant role of the US as compared
to any other single capitalist economy.
Sterling had a similar role prior
to 1914.

>Is the strengthening of DM and YEN a good thing for economies?

In general yes.

>what relation does exist between svalutation and inflation ?

What do you mean by svalutation?

>What could happen if every third word countries would refused to trade
in strong
>western moneys ?

Third world economies could in principle
prohibit the internal circulation
of foreign currencies and prohibit
citizens from holding them. They could
further specify that all exports had
to be purchased with their domestic
currency. Were they able to achieve
this they would have a 'strong' currency.

But it would have certain implications.

1. The upper classes would be unable
to export their wealth to more secure
locations like Geneva , London etc.

2. All imports would have to be paid for
in domestic currency, the overseas
demand for which would be limited to what
the country was capable of exporting.
This would effectively mean foregoing any
state expenditure financed by
foreign loans. Whilst this would be good
news for the masses, for the state,
its employees and functionaries this
would seem a bit of a drag.

3. Consequently state expenditure would
either have to be financed by
taxing the upper classes or drastically
reduced. There may be political reasons
for a ruling class to avoid this.

>Was the no-convertibility of URSS' rublo a weapon agaist comunist
countries ?

No, it was a weapon against the formation
of a class of domestic speculators.


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