Official Money
Golden opinions
Policy-makers can learn from the long history of monetary gold
The attributes of gold usually cited as making it useful as money are summed up by the World Gold Council as follows: “Gold’s scarcity, the fact that it does not corrode or tarnish, its malleability and status across civilisations have made it eminently suitable as a form of money.” There is more…
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Prospects for 2014
Are central bankers dancing to the markets' tune?
Markets and banks are kept afloat not so much by past QE but by the expectation that central banks will double up on it if markets should collapse again. Have asset prices become de facto the new monetary standard? From a longer-term perspective, and contrary to conventional wisdom, this could be a move…
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German power needs global fetters
Berlin should lead Europe in calling for a better monetary system
One side-effect of the comic opera that is the Hollande presidency of France is to knock it out, at least temporarily, as a serious counterpart to German strength in Europe. That is a coming challenge for the whole international community, not just for the European Community. Germany is always portrayed as the…
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Bernanke’s lost opportunity
Nobody was better placed to do R & D on a better system; more's the pity he blew it
Given that he was at the heart of monetary policy making before, during and after the biggest monetary disaster of all time, Ben Bernanke should be mightily pleased with the reviews he has been getting as he leaves office as Fed chairman. All but a disgruntled minority give him full marks for leading…
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How vulnerable is the dollar?
There are parallels with the decline of the pound sterling
There is no point dreaming about a new monetary order when the dollar remains dominant and is here to stay. At least, for all practical purposes. That is the bottom line of most commentaries on proposals to reform the international monetary system, such as that advanced in The Money Trap. Indeed, the…
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Beijing sets out its stall
How China will challenge the western hold on world money
Although the gloss has worn off the market’s initial enthusiastic endorsement of Beijing’s ambitious reform plans unveiled last month, there is little doubt they represent a major further move towards freeing financial markets – and promoting the international role of the RMB. In addition to changes in how companies file for stock market…
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The Meltzer plan for world money
The basis for a new monetary order is already here
Professor Allan Meltzer has for some years advocated a reform of international monetary arrangements based on a joint adoption by large economies or areas of similar inflation targets. This is a summary. The US, the Euro, Japan and China (if it ends its currency controls) should adopt a common 0 to 2 percent…
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A common criticism of proposals for reform of the international monetary system is that they are not politically possible. Of course, there are other grounds on which they can be and are criticised – especially when they call for a return to stable exchange rates, a howl goes up that this would sacrifice the domestic…
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At the conclusion of a recent star-studded IMF conference, chief economist Olivier Blanchard argued that we may need negative real interest rates for a long time. Here is the passage in full: “Now let me now turn to monetary policy, and touch on three issues: the implications of the liquidity trap, the provision of liquidity,…
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To mark publication of the “bigger and better” 360-page paperback (at £16.99 from Amazon, with a new 38-page preface) this and the following posts list the book’s main themes, by Chapter, each with an update. Seen from November 2013, how have recent developments changed the analysis and/or policy prescription? Currrent Economic Outlook Although the short…
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