I think I'm getting into this more deeply than I should without doing a lot more reading, perhaps including Benjamin Graham, but I would agree that the international monetary system we have today is not really very much like the system agreed to at Bretton Woods. As I understand it, the latter was based on the gold standard and fell apart when President Nixon took the US off the gold standard in 1971. What has happened since then is that the US$ has become the major global reserve currency against which other currencies are valued and Bretton Woods designed international institutions such as the IMF and the World Bank have essentially become extensions of the American empire.
With the US$ as the major international reserve currency, ever so much depends on what is happening, or perceived to be happening, to the US economy. Will the perception of the US economy be one that encourages international dollar holders to maintain their reserves and continue to use the US$ as a means of payment or will it be a pessimistic one that sees the dollar sink in value and be displaced by another reserve currency such as the Euro? The current instability initiated by the sub-prime mortgage debacle is not something that would inspire confidence. I don't know if we could ever return to an international commodity based currency such as the gold standard which prevailed from the latter few decades of the 19th Century to the first few decades of the 20th. Despite the wars that went on, there was as lot of stability back then. Gold standard countries were colonial powers able to access tradable commodities, including gold, from their colonies. The world is more divided and volatile now. Ed ----- Original Message ----- From: Barry Randall To: [EMAIL PROTECTED] Sent: Friday, August 17, 2007 10:54 AM Subject: RE: [Futurework] [Ottawadissenters] Money as Debt Well known investor Warren Buffett speaks frequently of his mentor, Benjamin Graham, co-author of "Security Analysis", sometimes referred to as the Bible of Investment Analysis. Less well known is Graham's book "World Commodities and World Currencies." World Commodities and World Currencies was published in 1944, a few weeks before the Bretton Woods Conference, where the original version of today's monetary system was designed. Dexter White and John Maynard Keynes chose to ignore Graham's proposal. Of course today's monetary system does not look anything like the one designed in 1944. It has been watered down to the point where almost anything goes. I agree with those who say that it is time to reform the world monetary system. A good place to start would be Benjamin Graham's book on World Commodities and World Currencies. I am not saying that its message should be followed exactly but it could give some guidelines for a new system. A modified Benjamin Graham commodity backed currency could be the basis for a new International currency that could also include the best ideas from the LETS Systems, the Islamic "Gold Dinar" and the International Emissions Trading Association's "Global Carbon Currency." Barry ------------------------------------------------------------------------------ From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Cordell, Arthur: ECOM Sent: Thursday, August 16, 2007 11:36 AM To: [EMAIL PROTECTED] Cc: futurework Subject: Re: [Futurework] [Ottawadissenters] Money as Debt I agree with Ed. In effect money is created by the banking systme (based on reserve ratios, etc.) But I have always liked the following definition of money: Money is what money does. (In this way money is like information) arthur ------------------------------------------------------------------------------ From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Ed Weick Sent: Thursday, August 16, 2007 11:25 AM To: [EMAIL PROTECTED] Cc: futurework Subject: Re: [Ottawadissenters] Money as Debt The following are my comments on Paul Grignon's Money as Debt, http://tinyurl.com/2uoexg . You might want to view the video before reading the comments. But be warned, it takes about 45 minutes. What I felt about the video is that it oversimplifies. As well as being debt when issued to a borrower by a bank, it is a medium of exchange. I bought an ice-cream cone the other day. It was a very simple transaction, but it would have been immensely complicated if I had no money with me and had to find something tangible to give the vendor. Better to go to my wallet, pull out a little fiat money, receive both the cone and a little certificate that says I'm now the cone's owner, and walk away and enjoy the ice-cream. A point that the video does not make, but should, is that there are good banking systems and bad (or not so good) banking systems, and there are governments that are able of enforce sound banking and governments that either cannot or may not want to. While nothing is ever perfect, I'm glad that I can access the Canadian banking system and not the Zimbabwean banking system. When I was in Russia in 1995, the banking system and everything else was in chaos. The ruble had fallen from parity with the US$ to 500 rubles to the $. This is not to say that the value of the Canadian $ hasn't changed. It has, but slowly enough to permit most people to adjust. When I was a student back in the 1950s I spent my summers working on the log booms on the BC coast. I was a top rate boom man, earning $2.12 an hour!! If I were a boom man now, my union would have ensured that I would be getting many times that amount. However, $2.12 was good enough in the 1950s. It enabled me to earn enough money to pay for my tuition, room and board and beer back then. What I'm arguing is that a modern economy, to thrive, requires a soundly administered banking system based on fiat money. It is far to complex and diverse to rely on digging up gold, on LETS or on single source money such as government expenditures. And yes, there will be abuses but we have to live with them. IMHO, people aren't moral by nature. They're moral only if they have to be. Getting back to Moscow in the 1990s, the place was in chaos because the rules under which people had lived for some six or seven decades had fallen away. People like the nomenklatura and the oligarchs got very rich; everybody else got very poor. What Putin and his ex-KGB associates have done is imposed new rules, step by step. The video, via some of the quotes it uses, suggests a conspiracy involving bankers, politicians and others in a position of power. Well, yes, that is likely the case. Wherever there are gains to be made and advantages to be taken, conspiratorial relations develop. I've just read John Perkin's "Confessions of an Economic Hit Man" which documents quite a few of them (truthfully, I hope). So what. We live with, and try to improve, whatever we've got. And when it comes to the monetary system, I would far rather have ours than Zimbabwe's. Ed __._,_.___ Messages in this topic (0) Reply (via web post) | Start a new topic Messages | Files | Photos | Links | Polls | Members | Calendar Change settings via the Web (Yahoo! ID required) Change settings via email: Switch delivery to Daily Digest | Switch format to Traditional Visit Your Group | Yahoo! Groups Terms of Use | Unsubscribe Visit Your Group SPONSORED LINKS a.. Social science book b.. Online social science degree c.. 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