Ed,
At 11:59 17/07/2010 -0400, you wrote:
(KH) Because China, Russia and the Middle East -- at a crunch (albeit
extremely stressful even for them) -- could survive the demise of the West
(there are plenty more potential consumer markets in the world), the
latter couldn't survive without the former. Unless we have universal
warfare, this is why gold will resume its role as a world currency before
too long -- as future historians will relate (with some amazement no doubt
that America was so resistant). And it will probably occur when the likes
of Goldman Sachs and JPMorgan Chase decide to turn from poachers to
gamekeepers for a bigger -- but more law-abiding -- future, not because of
any particular G20 summit.
(EW) You keep trying, Keith, and I do wish you luck but I do not see a
possibility of a return to the inflexibility of the gold standard.
It's because gold is inflexible that it serves as an anchor against
arbitrary government decisions! There can never have been a greater
economic change in the whole of history than England in the 19th century.
Wages rose from shillings (or even pence) a week to pounds. Yet the value
of gold remained steady and there was no inflation.
As I pointed out in a previous posting, currencies are strategic
devices that governments can use to their advantage, and to their
disadvantage as well.
Yes, and this is why we are in a heap of trouble in the West!
Currencies can be inflated and deflated for domestic economic purposes
and they can be pegged to other currencies to achieve advantages in
international trade. How China has used the renminbi is an example of
the latter.
China is only doing what we in the West did from Bretton Woods
onwards. This was maintained for another 30 years or so until it became
inconvenient for America to guarantee the value of the dollar.
Would countries really want to lose such strategic flexibility just to
pile up huge hoards of gold or run out of gold? I hardly think so.
If gold is the basis of a world trading currency then individual countries
could still do what they like with their own national currencies. If
governments were sensible, however, they wouldn't jig around with it but
let it find its own level; against the world currency according to the
state of its industries.
Keith
Ed
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
Keith Hudson, Saltford, England
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
