Re: FW: Re: Re: sinking Argentina
Very interesting and relevant subject of controversy, Jim. But is the forced circulation of fiat money a reality? If it were, general level of prices would be immutable. Unless you believe in the quantity theory. Do you? If yes, it is another controversy. On the other hand, if people don't trust a fiat money, nobody can force them to use it. They use another one. I think that the problem lies elsewhere. What can be forced is not the circulation but the full-discharge payment. In other words: the account unit of the debt. Fiat money enables producers to reflect all increasing costs of production in their prices of production and, this way, to pass additional cost on to the creditors. What the ancient monetary units like raw materials, grain, silver and gold did not allow, because of the scarcity you mention and define, that is to say they did not allow to restore relative prices when upstream prices increase. So that monarchs and oligarchs were periodically lead to purge the debt (as reflected in Ancient Testament, by the jubilee). But in both cases, recurrent moratoriums or full-discharging fiat money, the purge of debt is a destruction of financial capital. And this is, I think, the reason why fiat money is seen as forced. Therefore, the problem is the one of debt a world money has first to be related to. It is matter of a full-discharging world money that depends, I agree with you, on the kind of economy which gets hegemony. If hegemony was of say oil-producers countries, world money would be oil or any currency related to oil. As hegemony is of an oil importer, world money is a fiat one that allows to govern relative and real prices between oil and final goods and services. So, the only way of getting out of monetary crises is an agreement between countries according to which every country may pay its debt in any convertible currency, but its own. The BIS can manage that. But that poses the problem of getting rid of asymmetric exchanges and of all kind of imperialism, when even UNO has become an instrument of occidental empire. Has it not? Romain Kroës - Original Message - From: Devine, James [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Tuesday, January 08, 2002 5:55 PM Subject: [PEN-L:21223] FW: Re: Re: sinking Argentina (By mistake, I didn't send the following to the list.) It's useful to get beyond what a world money _should_ be like and talk about what it is. I agree with the implication of Marx's theory of money that unlike with the use of a money such as gold that's naturally scarce (i.e., involves labor to produce), the circulation of fiat money within a country must be forced. That is, governmental power is needed to preserve the value of paper money (relative to its cost of production), so that its supply is limited and it is acceptable in exchange. (States that fall apart due to civil wars, etc., typically suffer from hyperinflation, as the fiat money's value goes to zero.) That implies that a world money requires a world _state_. This in turn implies that the hegemony of the dollar since World War II is based on the US military, economic, and financial hegemony -- and that any future world money will have to be based on some similar hegemony, perhaps of another country. -- Jim Devine
FW: Re: Re: sinking Argentina
(By mistake, I didn't send the following to the list.) It's useful to get beyond what a world money _should_ be like and talk about what it is. I agree with the implication of Marx's theory of money that unlike with the use of a money such as gold that's naturally scarce (i.e., involves labor to produce), the circulation of fiat money within a country must be forced. That is, governmental power is needed to preserve the value of paper money (relative to its cost of production), so that its supply is limited and it is acceptable in exchange. (States that fall apart due to civil wars, etc., typically suffer from hyperinflation, as the fiat money's value goes to zero.) That implies that a world money requires a world _state_. This in turn implies that the hegemony of the dollar since World War II is based on the US military, economic, and financial hegemony -- and that any future world money will have to be based on some similar hegemony, perhaps of another country. -- Jim Devine -Original Message- From: Romain Kroes To: [EMAIL PROTECTED] Sent: 1/8/02 2:55 AM Subject: [PEN-L:21220] Re: Re: sinking Argentina The way of establishing a world money should start with the following principle: Every country may pay its debt in any convertible currency, but its own. This principle ensures that no balance of trade be permanently negative, so that rates of change may steadily fluctuate within a narrow bracket. After what a world currency, through a single symbol or through a basket, becomes a formality. This principle not only aims at the dollar, but at the euro, too, as this currency gets the same position, in relation to the rest of the world, as the USA in relation to the EU. Like the USA with the dollar, every time the EU makes a settlement in euros, it pays a debt with its debt. I'm afraid that in these conditions the problem is first the one of imperialism. Not of two conflicting imperialisms, but of a single one, hierarchically structured: the so-called International Community. In other words, it is not merely a technical matter. The countries willing escape the spiral of crisis must resist globalization, between bombing and IMF, and for the moment without the help of first-world opinion. RK - Original Message - From: Chris Burford [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Tuesday, January 08, 2002 1:04 AM Subject: [PEN-L:21210] Re: sinking Argentina At 07/01/02 13:13 +0100, Romain Kroes wrote: It is now becoming understandable that the way to get out of the spiral is the political decision to marginalize the dollar as international-standard currency, that is to move away from Washington's and IMF's domination. President Saa seemed to be ready to break the unstoppable chain. But the majority of Argentine politicians shrank from the difficulty. If the US dollar is likely to continue to rise while other currencies will tend to fall, it would be slightly more rational for economies like those of Argentina to be linked with the euro. Is there any possibility of a consensus emerging of a basket of currencies including the euro, and perhaps the renminbi, that assumes the dollar is likely to continue to rise for reasons of its unequal position in the world. And could such a basket of currencies be an emergent form of what Marx called world money? Chris Burford
