Re: [gang8] Dollar Hegemony Revisited

["Hugh Whinfrey" <econ@xxxxxxxxxxxx>]

William Hummel notes:

> As Keynes noted, gold is a barbarous relic.  The notion that a
> commodity like gold could be a workable international monetary base on
> a continuing basis was shown to be an illusion when the Bretton Woods
> system broke down, and decades earlier when the British sterling
> hegemony ended.

I hadn't realised that William was among what are perhaps erroneously
labelled "gold bugs" these days. This is a rather refreshing argument for
ending the price-capping on the yellow metal and removing it's influence
from the financial system altogether. One can only hope that William's
view is adopted one day and gold allowed to actually trade as a commodity
instead of as the reserve currency that we pretend somehow isn't a reserve
currency - that lie is in fact part of what is destabilising 'dollar hegemony'. I.e.
it would be better if the folks who wanted out of the dollar system found
themselves having to pay, say, USD 30,000 per oz instead of USD 300 per oz
at the exits. The point being that you'd then think more than twice about
dumping your dollars at such absurd prices for gold if you were Saudi,
Iranian, Japanese, Russian, Chinese, European, etc., etc..The price-capping
is only keeping the exits open - which is absurd when the alleged purpose of
it all is to keep dollar hegemony afloat.

Hugh