Re: Imposing the US Dollar on Canadacy

[Colin Danby <danbyc@xxxxxxx>]

I am not unsurprisingly in agreement with Paul's view here.  Workers
move around the US *all the time* -- it's a key source of US economic
resilience.  I'm a migrant.  Most of my undergrads are already migrants
and will likely migrate again.  Ecuadoran and Argentine workers have a
much harder time shifting to the U.S. to follow capital flight.  It's by
isolating labor mkts that you get the kind of reverse-Mosler-plan effect
noted last week.

> All payments problems in a monetary economy are simply LIQUIDITY
> problems --  and require liquidity solutions.

Adopting a currency your central bank cannot make is asking for
liquidity problems.  Bagehot is still right about what we need central
banks for.

> It is not deficits or surpluses in payments per se that cause
unemployment --
> it is the conventional wisdom
> that argues that deficit units must ALWAYS tighten their belts --
while
> surplus units has no responsibility for resolving the problem.

Argentina is the extreme example of this -- a logic that says that the
fault must lie with the deficit country -- look, its government spends
too much!   One result is structurally crippled finance in the
periphery, to the point that even commercial credit works poorly.

Best, Colin