Re: [gang8] Dollar Hegemony Revisited

["Barkley Rosser" <rosserjb@xxxxxxx>]

     This is going to be the last message from
me on this entire thread.
     Hugh, what makes you think that "the era of fiat
money is in turn evidently drawing to a close"?  I see
no evidence of such an impending end.  Certainly
there may be some unpleasant upheavals in the
next few years due to the international financial system
having to deal with the accumulation of the US imbalances.
But I see no push in any powerful quarters to deal with
this by going back to fixed exchange rates, much less
some form of commodity money (or its equivalent) of
any sort.
     The Bretton Woods system fundamentally broke
down because US political leaders (Nixon then) did
not want to have US macropolicy be beholden to any
external pressure, especially prior to a presidential
reerection campaign.  We are seeing this yet again,
with Bush's flunkies encouraging depreciation of the
dollar to prop up the midwest manufacturing belt.  No
US president in the foreseeable future is going to give
up this ability.  Heck, if the Brits are unwilling to tie to
the euro, is there any reason to believe that we are
even remotely near going to some kind of global
fixed exchange rate system?  Not a chance.
Barkley Rosser
----- Original Message -----
From: "Hugh Whinfrey" <econ@xxxxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Thursday, July 10, 2003 3:20 PM
Subject: Re: [gang8] Dollar Hegemony Revisited


> Wiliam Hummel notes:
>
> > The story of money has been one of constant evolution.  We are now in
> > the era of fiat money systems.  Gold as money is an anachronism.  What
> > you are referring to above is the days of mercantilism, when gold was
> > equated to national wealth.  Today gold does not flow at all except
> > among speculators, industrial users, and the few who still think of
> > gold as the only "true money."
>
> The question really is, now that the era of fiat money is in turn
evidently
> drawing to a close - what will follow it. This seems to be what has
brought
> your "gold nuts" back out of the closet in that they seem to be hopeful
> that gold will be part of the next 'regime'. So while I understand the
reluctance
> to entertain the failure of the present system, it nevertheless would be
prudent,
> as I see it, to get on with the business of working out a viable successor
system.
> You know, there are many folks out there who have children and
grandchildren
> who aren't going to be pleased when they realise that their 'legacy' from
our
> time consists mostly of a leaky plastic bag dripping of all sorts of
proveribal
> 'toxic waste' that likely will take generations to fix. History will not
be kind to
> us, but there is no point in making it worse for them than it has to be.
>
> > Mercantilist thought of this sort has no place in the modern fiat
> > money era.
>
>
> Okay. Sorry for the disturbing the force. I won't think that thought
again.
> Problem now solved and prosperity is right around the corner :-)
>
> Hugh
>
>
>
>