December 3, 2011
September 22, 2011
Telegraph: The great euro swindle
This is an interesting summary of the path to the Euro, and how some predicted the current situation at the very start of the project:
The field is theirs. They were not merely right about the single currency, the greatest economic issue of our age — they were right for the right reasons. They foresaw with lucid, prophetic accuracy exactly how and why the euro would bring with it financial devastation and social collapse.
Meanwhile, the pro-Europeans find themselves in the same situation as appeasers in 1940, or communists after the fall of the Berlin Wall. They are utterly busted. [. . .]
The central historical error of the modern Financial Times concerns the euro. The FT flung itself headlong into the pro-euro camp, embracing the cause with an almost religious passion. Doubts were dismissed. Here is the paper’s Lex column on January 8, 2001, on the subject of Greek entry to the eurozone: “With Greece now trading in euros,” reflected Lex, “few will mourn the death of the drachma. Membership of the eurozone offers the prospect of long-term economic stability.” The FT offered a similarly warm welcome to Ireland.
The paper waged a vendetta against those who warned that the euro would not work. Its chief political columnist, Philip Stephens, consistently mocked the Eurosceptics. “Immaturity is the kind explanation,” sneered Stephens as Tory leader William Hague came out against the single currency.
[. . .]
Now let’s turn to the BBC. In our Centre for Policy Studies pamphlet, Guilty Men, we expose in detail how the BBC betrayed its charter commitment and became a partisan player in a great national debate — all the more insidious because of its pretence at neutrality.
For example, in the nine weeks leading to July 21, 2000, when the argument over the euro was at its height, the Today programme featured 121 speakers on the topic. Some 87 were pro-euro compared with 34 who were anti. BBC broadcasters tended to present the pro-euro position itself as centre ground, thus defining even moderately Eurosceptic voices as extreme.
H/T to Tim Harford for the link.
July 11, 2011
The Euro: who’ll be the first to leave?
With all eyes on Greece recently, the troubles of Italy come as a sudden shock to many:
Greece, Ireland, Portugal, (maybe) Spain…and now Italy? Contagion. The hope on the part of the EU and ECB was to contain the contagion by throwing money at it, but every time they fill one sink-hole with Euros another one opens up. It’s been obvious for a long time that the Eurozone was simply a bad idea, and this crisis has exposed the rotten underpinnings for all to see. Europe wanted to have a currency union just like the United States, but they are finding out the hard way that a monetary union without a fiscal-policy union just won’t work. European countries are not like US states — they have different langauges, different work rules, different governing philosophies…different cultures. The big question in everyone’s mind is…now what? Some countries must default, and a default will probably require leaving the Euro and going back to the sovereign currency. But no one knows exactly how this will work, or what the consequences will be.
Some people are floating the idea of a Euro-Bond, but I find that a little nonsensical absent any fiscal-policy union backing it. But of course this may be the point to the enterprise: to “force” Europeans into a closer union without having to go through the messy (and time-consuming) processes of holding a vote. The EU project has never really been a democratic enterprise from the very first — the Eurozone was implemented without the say-so (even over the protests of) its citizens. If I Eurobond is floated, I expect it to be another example of droit de Seigneur on the part of the Eurozone elite. (And it probably won’t work, and will piss away a lot more good money after bad, but none of that has stopped them so far.)
May 10, 2011
“The recent recession was probably the last nail in the coffin of the proposal for a common Canada-U.S. currency. “
Stephen Gordon explains how the Canadian economy has benefitted from the independent Canadian dollar:
Let’s think about what would have happened over the past few years if a monetary union had already been in place. Instead of generating an appreciation of the Canadian dollar, the commodity boom would have drawn in larger and destabilizing flows of investment. As it was, the appreciation of the Canadian dollar tempered the flow of capital, and kept inflation under control.
When the recession hit and commodity prices fell, our floating currency gave us a 20 per cent exchange rate depreciation in the space of five months. This sort of stimulus would have been unavailable under a monetary union — as Spain is now finding out, to its great cost.
For reasons that Paul Krugman explains here, Canada has always been an interesting case study in international monetary policy. Canada’s decision to adopt a floating exchange rate in 1950 — several decades before the post-war Bretton Woods system of fixed exchange rates collapsed — was an unorthodox reaction to a situation with which we’ve become familiar: sharply fluctuating commodity prices.
January 6, 2011
Orders of magnitude, US dollar version
Page Tutor provides a very useful visual reference to the terms Million, Billion, and Trillion:
Believe it or not, this next little pile is $1 million dollars (100 packets of $10,000). You could stuff that into a grocery bag and walk around with it.
H/T to Tim Harford for the link.
August 27, 2010
Redesigning the American dollar bill?
Gerard Vanderleun isn’t over-enthused by the notion:
The ObamaBuck-U: A New Bill to Inspire Confident Recovery
I’d advise these sooper-genius designers to design the ObamaBuck with a lot of room for extra zeroes. Gotta plan for the forthcoming Weimarization of the US economy.
What else are these hamstrung colonized minds designing in the way of currency? Here’s there list. You can smell the overheated whiffs of sanctimony just reeking from the stack:
$1 – The first African American president
$5 – The five biggest native American tribes
$10 – The bill of rights, the first 10 amendments to the US Constitution
$20 – 20th Century America
$50 – The 50 States of America
$100 – The first 100 days of President Franklin Roosevelt. During this time he led the congress to pass more important legislations [sic] than most presidents pass in their entire term. This helped fight the economic crises at the time of the great depression. Ever since, every new president has been judged on how well they have done during the first 100 days of their term.When was the last time these fools took a history course? Third grade? Where are these drool-cup designing dolts based in the US? San Francisco, where else? The town where the homeless defecate freely on the street and where the artists defecate freely in their brains.
If nothing else, the proposed designs would do one useful thing: they’d stop Americans from sneering at the design of Canadian banknotes!
June 8, 2010
Are we ready for “a serious debate about returning to the gold standard”?
The more I read of Maxime Bernier’s thoughts, the more I wonder how long it’ll be before he’s drummed out of Stephen Harper’s party: he’s far too sensible. Here, for example, he outlines what it is that central banks do to your money, and why it’s a bad deal for ordinary Canadians:
All this guessing about setting rates has nothing to do with capitalism and free markets; it has more to do with central planning and government control of the money supply. In a monetary free market, the interest rate would be determined by the demand for credit and the supply of savings, just like any other price in the economy.
Government control over money has serious consequences that few people seem to be aware of.
One of them is that central banks are continually increasing the quantity of money that is circulating in the economy. In Canada for example, if we use the strictest definition of money supply, it has increased by 6 to 14% annually during the past dozen years. The situation is about the same everywhere.
The effects of constantly creating new money out of thin air have been a debasement of our money and a dramatic increase in prices. The reason why overall prices go up is not because businesses are greedy, or because wages go up, or because the price of oil goes up. Ultimately, only the central bank is responsible for creating the conditions for prices to rise by printing more and more money.
With all this, it’s surprising that he has (so far) managed to stay in the Conservative party, which doesn’t appear to actually believe in anything much anymore . . . other than the need to stay in power.
Update, 9 June: His speech (from which the article linked above was drawn) gets positive reviews.
June 1, 2010
Another local outbreak of counterfeit bills in Toronto
I was just down in the convenience store in my clients’ office building in downtown Toronto and heard from the store owner that there are lots of counterfeit bills appearing today. She showed me an example $10 bill, which looked fine except it was missing the metallic strip on the left side of the bill.
Here’s a guide to recognizing the differences between real and counterfeit Canadian bills from the Bank of Canada:
