Re: Imposing the US Dollar on Canada

["Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>]

Diego Miranda wrote:

> I have to agree that it has done a prettuy good job to accomodate the
> business cylce in the us....

The facts are not with you, unless your definition of "accommodation" has hidden
meanings.

Henry C.K. Liu

>
>
> On Thu, 3 May 2001, Basil Moore wrote:
>
> > Henry
> > I realize Dollarization removes the need for central banks, and involves
> > interest rates being set by the Fed.
> > But if one regards setting the interest rate as the single most important
> > function of a CB, and if one is in favour of the lowest interest rate
> > possible to stimulate AD, by the record the Fed has done  better job than
> > the CB of 99% of all DC's!  I will suggest this project to a student, and
> > let you know the results.
> >
> > Best
> > Basil
> >
> >
> >
> >
> > At 01:52 PM 4/29/01 -0400, you wrote:
> > >Basil,
> > >
> > >New England: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and
> > >Connecticut, sends 12  out of 50 Senators and 6% of the Representaives to
> > >Washington.  New England also enjoys free movement of population, and
> > >therefore
> > >labor, within the 50 states, not to mention uniform federal laws and
> > >regulations on minimum wage and tax rates
> > >
> > >Dollarization will not help SA, it will only fix interest rate to peg US rates
> > >which is set by the Fed whose deliberation does not take into account the
> > >needs
> > >of SA.  The boom and bust will continue at Greenspan's pleasure.  That is what
> > >happens to Hong Kong since 1983.
> > >
> > >Dollarization removes the need for a SACB.
> > >
> > >Basil Moore wrote:
> > >
> > > > William
> > > > Does everyone in the Dollarisation debate recognize that once a country
> > > > dollarises, it ceases to have any balance of payments problems with all
> > > > countries who are also on the dollar? The current account deficit ceases to
> > > > matter, and is no longer a constraint. eg like New England with the rest of
> > > > the country.
> > > >
> > > > This is hugely important for developing countries. In SA, where I am
> > > > currently residing, whenever the economy grows rapidly, its MPM capital
> > > > goods is about 1, so capital imports flood in, the current account goes
> > > > into deficit, and the CB must dramatically raise interest rates to protect
> > > > the exchange rate, so the boom and growth is flattened.
> > > >
> > > > Basil Moore
> > > >
> > > > At 10:16 PM 4/19/01 -0400, you wrote:
> > > > >Astute students of imperialism understand that "voluntarism" on the part
> > > > >of the ruling class
> > > > >of the victim nation does not disguise imperialism.  In fact, imperialism
> > > > >works always hand
> > > > >in glove with an indigenous comprador class.  Having been born and raised
> > > > >in Hong Kong, I am
> > > > >an expert on this phenomenom.
> > > > >
> > > > >Henry C.K. Liu
> > > > >
> > > > >
> > > > >
> > > > >"William F. Hummel" wrote:
> > > > >
> > > > > > Henry Liu wrote:
> > > > > >
> > > > > > >Furthermore, the dollarization of the Americas would logically be
> > > > > accompanied by the
> > > > > > >surrender of the Federal Reserve of its authority and powers to a new
> > > > > Central Bank of
> > > > > > >the Americas, like the ECB. Is the Us prepared to do that?  Not
> > > > > likely.  Dollarization
> > > > > > >without an Central banks of constituents nations is pure monetary
> > > > > imperialism.  But then
> > > > > > >Alan may argue that imperialism is good.  It certainly worked for the
> > > > > British Empire
> > > > > > >with the role of the pound sterling. The curious thing is the some
> > > > > very influential
> > > > > > >Americans, including Greenspan and Summers, are against the idea of
> > > > > dollarization, as
> > > > > > >they do against the tolerance of euro-dollars.  Summers is famous for
> > > > > his admonition of
> > > > > > >Japan: sound macro-economic cannot be substituted by an exchange rate
> > > > > policy.
> > > > > > >Dollarization is of course the ultimate exchange rate policy.
> > > > > > >
> > > > > > This confuses dollarization with a treaty for a common currency
> > > > > > which would involve a central bank for the treaty members.
> > > > > > Dollarization (meaning adopting the US dollar as the official
> > > > > > currency) is a voluntary act of a sovereign nation.  It may or
> > > > > > may not be beneficial to that nation, but the assertion that it
> > > > > > is pure monetary imperialism is absurd.  The US monetary
> > > > > > authorities have not encouraged any other nation to dollarize.
> > > > > > They are well aware of the negative implications of
> > > > > > dollarization, both for the dollarizing nation and for the US.
> > > > > >
> > > > > > William F Hummel
> >