At the recent meetings of the Eastern Economic Association, one of the
sessions was held at the Boston Fed entitled "50 Years After Bretton Woods."
It was organized by Dewey Daane, former Member of the Fed Board of Governors
now at Vanderbilt. The roundtable participants included Charles Taylor,
Executive Director of the Group of 30; Stefan Schoenberg, IMF Director for
Germany; Richard Erb, Deputy Managing Director of the IMF; and Scott Pardee,
Chairman of Yamaichi International American. I would describe them as the
creme de la creme of International Banking. All wereclearly opposed to any
return to fixed rates of exchange, something that I had called for in a
recent essay in Newsday. In my piece, I argued that Keynes and White
settled on fixed rates of exchange to reduce the postwar power of international
bankers and to reduce currency speculation, which has flowered since Nixon's
ending of fixed exchange rates. (I would be happy to send copies of this 1500-
word essay to anyone interested.) At the reception afterwards, I buttonholed
Erb, who works under Camdessus, the IMG Director whose ouster Jeffrey Sachs
recently called for on the Op-Ed page of the New York Times. In a letter
that I sent to the Times (unpublished), I expressed the opinion that this
seemed unfair since Camdessus had suggested the issuance of $50 billion in
SDRs to help the FSU, but was overruled by our Secretary of the Treasury.
Erb explained that the reason for the refusal to go along with the
expansion of the international supply of fiat money goes back to our
legislation in 1982 when Congress approved an increase in our contribution
to the IMF. Apparently, there was a proviso in this legislation prohibiting
the issuance of future SDRs without Congressional approval. Since Bentsen
and Summers thought that it would be difficult to differentiate between
the issuance of international fiat money and United States foreign aid,
the climate of opinion in Congress wouldn't have gone along with the Camdessus
proposal. It is no accident that the headquarters of the IMF and World Bank
are in Washington! Lynn Turgeon [EMAIL PROTECTED]
