tag:blogger.com,1999:blog-1499918587947814214.post4637504092701959374..comments2023-10-30T06:11:35.260-06:00Comments on Left-Federalist: Bretton Woods& BermanRedoubt10http://www.blogger.com/profile/12282362749212355599noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1499918587947814214.post-58036330128064145782007-09-03T08:19:00.000-06:002007-09-03T08:19:00.000-06:00Howard, Thanks for pointing these things out and I...Howard,<BR/> Thanks for pointing these things out and I do not have any quality answers for them at this time. Note that I wrote that reverse-BWA is probably harebrained, and it is not anything that I am really going to absorb much time over. My main objective is to restore the US Dollar to it's proper constitutional place, if that is possible. This proposal is also geared to appease the tariff-phobic Bretton Woods nostalgics, maybe bring a few onboard protectionism, but this is perhaps merely wishful thinking.<BR/><BR/> The problem is that the time is running-out for the US Dollar being the unwritten reserve currency anyway, and it looks like the Euro is going to replace it sooner than many are expecting it to. If Washington is not prepared for this, as it seems not to be, the Dollar is going to crash big time in this event. Having hegemony of the Dollar internationally is not critically important - the dollar thrived quite well when the British Pound Sterling was the de facto reserve currency, but back in those days the Dollar belonged to the people of the United States,and the Pound didn't determine the value of it.Redoubt10https://www.blogger.com/profile/12282362749212355599noreply@blogger.comtag:blogger.com,1999:blog-1499918587947814214.post-25625154624638217392007-08-30T12:15:00.000-06:002007-08-30T12:15:00.000-06:00Am slowly working my way backward in time through ...Am slowly working my way backward in time through your blog, through the past two or three weeks. It is not quick reading. There is a lot of substance there.<BR/><BR/>The reverse Bretton-Woods idea is a thunderbolt. It had never occured to me. How much practical merit the idea has---little or much---is not at all obvious to me. I do have a question about it, though. Paul Craig Roberts observes that the dollar trades at a fat exchange rate because it is the international reserve currency. In other words, Mr. Roberts observes that a foreigner accepts a dollar in payment from you and me, not so much because the foreigner can turn around and buy American goods with the dollar, but because he can buy foreign goods with the dollar, from other foreigners. The dollar---which at any given moment in international markets exists in a large but limited supply---has acquired a fictional inherent value, separate and apart from what one can buy with it in country the dollar originally came from. Inside the U.S., the dollar is just money, but outside the U.S. it is 21st-century specie of a sort.<BR/><BR/>If the dollar ceased to be the reserve currency, as it would under the reverse Bretton-Woods, then what would happen to all the dollars already outside the U.S.? No longer useful as a medium of exchange between one foreigner and another, would they not come flooding back here? Would this not greatly devalue the dollar? If foreigners at that time still did not want U.S. manufactures (this is a separate point, I realize, but let the question disregard it for the moment), then would they not instead buy up U.S. real estate and stock in U.S. companies---not because they especially wanted those things but because buying them were the most convenient way to dump a then unwanted dollar?<BR/><BR/>Would a reverse Bretton-Woods not unavoidably shock the U.S. economy for these reasons? I thought that what you and I wanted was a strong dollar buttressed by tariffs, rather than a weak dollar which made tariffs superfluous. Would a reverse Bretton-Woods not tend toward the latter?<BR/><BR/>Admittedly, I do not fully understand the implications of the questions I am asking, but I should be interested to read your comments on them nevertheless.Howard J. Harrisonhttps://www.blogger.com/profile/04418214890927411936noreply@blogger.com