tag:blogger.com,1999:blog-6948982521501107752.post7458924626191948282..comments2023-10-21T09:03:15.270-04:00Comments on Rogue Economist Rants: On currencies, global trade imbalances, money creation, and the GDRRogue Economisthttp://www.blogger.com/profile/03439817966760459091noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-6948982521501107752.post-50857903873198514092010-02-06T12:40:55.128-05:002010-02-06T12:40:55.128-05:00Yes, I realize that and I ended the comment from w...Yes, I realize that and I ended the comment from which the quote is taken, if I recall correctly, that "there is a long way to go." The US has not been exemplary in this regard and has been taken to task, e.g., by Noam Chomsky in his withering critique of neoliberalism and the global order, and the US pursuit of hegemony through economic means. Often the US and West pay lip service to creating global order while pursuing an agenda favorable their own political and economic interest based on economic assumptions that are heavily biased.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-6948982521501107752.post-8433094664755129352010-02-06T12:05:02.845-05:002010-02-06T12:05:02.845-05:00Tom, thanks for joining in. And I want to add for ...Tom, thanks for joining in. And I want to add for the record that I know your quote wholly meant that the US should use its currency only for the good. But realizing that the US has a potentially 'unlimited' resources for good also means that it will also have unlimited resources for selfish interests. That second implication is from me.Rogue Economisthttps://www.blogger.com/profile/03439817966760459091noreply@blogger.comtag:blogger.com,1999:blog-6948982521501107752.post-11841740374196513602010-02-06T11:08:05.856-05:002010-02-06T11:08:05.856-05:00Interesting post at Angry Bear that expands on the...Interesting post at Angry Bear that expands on the implications of the dollar as reserve currency, trade, and globalization <a href="http://angrybear.blogspot.com/2010/02/globalizationlifted-from-comments.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2FHzoh+%28Angry+Bear%29&utm_content=Google+Reader" rel="nofollow">here</a> that bears on the quotation attributed to me above, showing how national interests and international conditions can generate challenges, financial and real.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-6948982521501107752.post-74738679644153896572010-02-06T07:50:42.073-05:002010-02-06T07:50:42.073-05:00Arthurian, thanks for your comment.More comments h...Arthurian, thanks for your comment.More comments here pls because I am threading on unfamiliar waters here.<br /><br />But first, I don't think it's true that 'When a currency is created, a state will arise around it.' It's the other way around, when a state is created, it issues its own currency.<br /><br />Regarding A's ability to maintain and foster order, I had a double meaning for that. My meanings are - because it can finance itself with the default currency, A could maintain good for the world indefinitely, OR, it can slowly take over the rest of the world - and finance the entire process with printing more money. By 'taking over' here, I mean economically (ok, maybe also a little militarily).<br /><br />To explain the endless loop, let's say for example, country B is China. If the renminbi is actually part of a basket of currencies in the GDR, everytime it tries to bring down the renminbi, it brings down the entire GDR. So China cannot successfully bring renminbi up or down without giving the same result to other currencies.Rogue Economisthttps://www.blogger.com/profile/03439817966760459091noreply@blogger.comtag:blogger.com,1999:blog-6948982521501107752.post-91342174181449432422010-02-06T05:42:34.977-05:002010-02-06T05:42:34.977-05:00I had trouble making sense of your post until I pl...I had trouble making sense of your post until I plugged in "America" for every bold "A." That made it easier to picture what you were saying. Having now established the limits of my own mind...<br /><br />It irks me when people pollute economic thought with their politics. But going in the other direction, it is necessary for economic thinkers to allow for political realities. <br /><br />A nation's currency, like its flag, is a symbol that represents the nation. But currency is less symbol and more meat. Currency *is* the nation. Nations rise and fall on their currencies.<br /><br />I do not think currency -- fiat currency, anyhow -- can exist apart from an issuing state. When a currency is created, a state will arise around it. The Euro, and the European Union, are examples of this in our own time.<br /><br />If a stateless, global currency emerges, a state will arise upon it. Your economic thought experiment cannot help but become polluted by politics, should it become reality: "The GDR will constrain A’s ability to, in Tom Hickey’s words, 'maintain order and foster the development of emerging nations...'"<br /><br />If your thought experiment is incomplete, what it lacks is the allowance for political realities.<br /><br />Art<br /><br />ps: I don't follow your "endless loop" statement. Pegged to a basket of currencies (including its own), the currency would be pegged partly to itself and partly to the rest of the basket. Why must that be unsuccessful?The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.com