Comments on: How To Establish and International Currency http://dailyreckoning.com/how-to-establish-and-international-currency/ Covering the economy, global markets and world politics. Sun, 22 Nov 2009 06:01:02 -0600 http://wordpress.org/?v=2.8.4 hourly 1 By: DJW http://dailyreckoning.com/how-to-establish-and-international-currency/#comment-17179 DJW Mon, 03 Aug 2009 18:43:12 +0000 http://dailyreckoning.com/?p=16851#comment-17179 I am reading and enjoying Nathan Lewis' book Gold our once and future money. But it is very unfortunate that it ends in 2007, and since then a lot has happened, and it would have been great had he posted a blog updating his analysis regularly to cover the unfolding recession. His article above claims that China could allow the RMB to go to 1:1 against the USD. That would mean NO EXPORTS AT ALL. Do we take Nathan Lewis' theory as showing that a Gold Standard could only work if everyone was on one? In recent years, the dollar has fallen a lot against gold, and any currency pegged to gold would have forced a huge crisis on its home economy. I am reading and enjoying Nathan Lewis’ book Gold our once and future money. But it is very unfortunate that it ends in 2007, and since then a lot has happened, and it would have been great had he posted a blog updating his analysis regularly to cover the unfolding recession. His article above claims that China could allow the RMB to go to 1:1 against the USD. That would mean NO EXPORTS AT ALL. Do we take Nathan Lewis’ theory as showing that a Gold Standard could only work if everyone was on one? In recent years, the dollar has fallen a lot against gold, and any currency pegged to gold would have forced a huge crisis on its home economy.

]]> By: Mark http://dailyreckoning.com/how-to-establish-and-international-currency/#comment-14095 Mark Mon, 06 Jul 2009 08:15:32 +0000 http://dailyreckoning.com/?p=16851#comment-14095 Edmund Marc, My question: What does China have to gain holding a doomed fiat currency? How long can the $ be trusted when the aim is to deflate US debt. China and others can see that the writing is on the wall, at some point holders of the $ will head for the exit. One more thing if China takes over the world currency they can create cash and buy whatever. They might even keep it going for as long as the USA did, at least they might think they could. Edmund Marc,

My question: What does China have to gain holding a doomed fiat currency?
How long can the $ be trusted when the aim is to deflate US debt. China and others can see that the writing is on the wall, at some point holders of the $ will head for the exit. One more thing if China takes over the world currency they can create cash and buy whatever. They might even keep it going for as long as the USA did, at least they might think they could.

]]> By: Edmond Marc du Rogoff PhD http://dailyreckoning.com/how-to-establish-and-international-currency/#comment-14027 Edmond Marc du Rogoff PhD Sun, 05 Jul 2009 04:24:11 +0000 http://dailyreckoning.com/?p=16851#comment-14027 Nathan, you forget one very important point: what does China has to gain by displacing the US$? So far China holds an enormous amount of US$ denominated bonds. If a gold-based yuan - or a new Chinese gold-based currency - were to become the new world trade currency, the US$ would devalue precipitously, to the advantage of the US, who will pay its debt in devalued dollars, but to the disastrous disadvantage of China - as well and Japan and other major holders of US$. Hence, I repeat my question: what does China has to gain from taking over the world currency? Nathan, you forget one very important point: what does China has to gain by displacing the US$? So far China holds an enormous amount of US$ denominated bonds. If a gold-based yuan – or a new Chinese gold-based currency – were to become the new world trade currency, the US$ would devalue precipitously, to the advantage of the US, who will pay its debt in devalued dollars, but to the disastrous disadvantage of China – as well and Japan and other major holders of US$. Hence, I repeat my question: what does China has to gain from taking over the world currency?

]]> By: Leigh Cross http://dailyreckoning.com/how-to-establish-and-international-currency/#comment-13994 Leigh Cross Sat, 04 Jul 2009 16:28:45 +0000 http://dailyreckoning.com/?p=16851#comment-13994 Government run stable currency? Balderdash. For a genuinely stable international currency based on gold, look to a private and independent company to store gold and issue certificates on it. It is entirely possible for a company to be profitable on the basis of absolute, unshakeable integrity. Look at Bureau Veritas in the shipping world. Their only stock in trade is their integrity. How such a gold company would operate and charge is beyond my modest ability to specify, but it would work. And work damned well. Government run stable currency? Balderdash. For a genuinely stable international currency based on gold, look to a private and independent company to store gold and issue certificates on it. It is entirely possible for a company to be profitable on the basis of absolute, unshakeable integrity. Look at Bureau Veritas in the shipping world. Their only stock in trade is their integrity. How such a gold company would operate and charge is beyond my modest ability to specify, but it would work. And work damned well.

]]> By: Mudd http://dailyreckoning.com/how-to-establish-and-international-currency/#comment-13760 Mudd Wed, 01 Jul 2009 14:57:40 +0000 http://dailyreckoning.com/?p=16851#comment-13760 Shouldn't the title of this article instead be "How To Establish an International Currency"? Shouldn’t the title of this article instead be “How To Establish an International Currency”?

]]> By: Fellow Traveller http://dailyreckoning.com/how-to-establish-and-international-currency/#comment-13757 Fellow Traveller Wed, 01 Jul 2009 14:51:29 +0000 http://dailyreckoning.com/?p=16851#comment-13757 that very tired, old and re-tred concept of a "market basket of currencies". currencies by their very definition are NOT money. long ago I learned the characteristics of real money. Store of Value and Fungibility were only two on that list. I learned this in High School, from an ecominics teacher who had been a Korean Police Action Fighter Pilot. others can research the rest. whatever. that very tired, old and re-tred concept of a “market basket of currencies”. currencies by their very definition are NOT money. long ago I learned the characteristics of real money. Store of Value and Fungibility were only two on that list. I learned this in High School, from an ecominics teacher who had been a Korean Police Action Fighter Pilot. others can research the rest. whatever.

]]> By: Jim http://dailyreckoning.com/how-to-establish-and-international-currency/#comment-13723 Jim Wed, 01 Jul 2009 05:23:10 +0000 http://dailyreckoning.com/?p=16851#comment-13723 The Chinese are promoting a currency comprised of many countries including gold. What is this article supposed to be about? The Chinese are promoting a currency comprised of many countries including gold. What is this article supposed to be about?

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