71–80 of 119 posts
Before today, I think the US dollar was about 60% of the SDR bucket of currencies. For years I have read about probable problems if the US dollar was no longer the reserve currency, but it seems from what I have been reading that there is some sort of negotiated slow migration from the US dollar to using SDRs as the reserve currency. I like slow and steady change, even is it means that eventually my country (USA) wil…
Before today, I think the US dollar was about 60% of the SDR bucket of currencies. For years I have read about probable problems if the US dollar was no longer the reserve currency, but it seems from what I have been reading that there is some sort of negotiated slow migration from the US dollar to using SDRs as the reserve currency. I like slow and steady change, even is it means that eventually my country (USA) wil…
But the upside is value of the dollar would drop, making U.S. exports more competitive.
This story masks BAD news. http://blog.mpettis.com/2015/11/chinas-rebalancing-timetable... China's debt today is over 200% of its GDP and may exceed 300% in five years. One hopes the IMF and China agreed on concessions will assist China in rebalancing its economy quickly, because as Petits' posting points out -- a disruptive end is near for the current model.
https://news.ycombinator.com/item?id=10601219
TL;DR China's financial system is partially privatized central planning so it follow different patterns than the Western financial system.
This story masks BAD news. http://blog.mpettis.com/2015/11/chinas-rebalancing-timetable... China's debt today is over 200% of its GDP and may exceed 300% in five years. One hopes the IMF and China agreed on concessions will assist China in rebalancing its economy quickly, because as Petits' posting points out -- a disruptive end is near for the current model.
It doesn't have one single link to any of the claimed figures and a quick Google shows the claimed figures to be at least an order of magnitude out.
Earlier quoted context omitted.
Wouldn't the gold standard render the entire notion of a "reserve currency" meaningless, too? If you're holding a gold-backed currency then you're effectively just holding gold. Holding a currency as a "reserve currency" probably meant actually holding a bunch of gold in a vault. It hardly matters whose face was on it.
If "gold standard" had one narrow definition (something like each printed currency unit is back by a specific amount of gold and that amount doesn't float), then yes, it would render it meaningless. But if the amount of currency issued can float relative to the gold reserves held, then the values of currencies relative to each other could still flow significantly. Put another way, it's an issue of trust. If currency…
This story masks BAD news. http://blog.mpettis.com/2015/11/chinas-rebalancing-timetable... China's debt today is over 200% of its GDP and may exceed 300% in five years. One hopes the IMF and China agreed on concessions will assist China in rebalancing its economy quickly, because as Petits' posting points out -- a disruptive end is near for the current model.
Earlier quoted context omitted.
If "gold standard" had one narrow definition (something like each printed currency unit is back by a specific amount of gold and that amount doesn't float), then yes, it would render it meaningless. But if the amount of currency issued can float relative to the gold reserves held, then the values of currencies relative to each other could still flow significantly. Put another way, it's an issue of trust. If currency…
For most of the time covered by this graph, "gold standard" meant that the money was actually made out of precious metals, not merely that it had some official exchange rate with gold. Concerns about how the quantity of currency issued changes relative to the amount of gold held, or conversion to/from gold, simply wouldn't apply.
Earlier quoted context omitted.
That guy is seriously confused. He seems to be referring to sectoral balances but doesn't realise that having the USD as the international reserve currency is what has allowed the US to consistently run trade deficits (where importing is a benefit to society and exporting is a cost), that the US government does entirely determine the ability of the US private sector to save USD and is able to pursue full employment b…
I've been following Mr Pettis for a while. I don't have a degree in economics, just a few classes and an interest. I like how he argues from identities, but can't vouch for his methods in the greater economic landscape. I'm not sure I understand all of your argument, but would be interested in your counterpoints to point 6 of his appendix on that post. Perhaps he's missing some of the benefits of a reserve currency t…
For more on this see:
Introductory video: https://www.youtube.com/watch?v=i35uBVeNp6c
Book that describes everything in detail: http://www.amazon.com/Modern-Money-Theory-Macroeconomics-Sov...
Earlier quoted context omitted.
I've been following Mr Pettis for a while. I don't have a degree in economics, just a few classes and an interest. I like how he argues from identities, but can't vouch for his methods in the greater economic landscape. I'm not sure I understand all of your argument, but would be interested in your counterpoints to point 6 of his appendix on that post. Perhaps he's missing some of the benefits of a reserve currency t…
Read his book The Great Rebalancing. There are pros and cons to it, whether you think it's an overall positive or overall negative likely depends on who you are and what interests you seek. One thing I've learned, most people do not understand international trade or the balance of payments.
Earlier quoted context omitted.
For most of the time covered by this graph, "gold standard" meant that the money was actually made out of precious metals, not merely that it had some official exchange rate with gold. Concerns about how the quantity of currency issued changes relative to the amount of gold held, or conversion to/from gold, simply wouldn't apply.
Not true, there was still debt, so unbacked money.