b******r
发帖数: 1619 | 1 WTF?
Inside President Trump’s otherwise “standard Trump stump speech” at CPAC
was nestled what might be a most intriguing observation:
Global cooperation, dealing with other countries, getting along with other
countries is good, it’s very important. But there is no such thing as a
global anthem, a global currency or a global flag. This is the United States
of America that I’m representing.
There's a keen insight in there that could, just maybe, transform our lives,
America, and the world. No "global currency?" Was this, with the poetic
observation that “there is no such thing as a global anthem…or a global
flag,” just a trope? Or could it contain a political portent with potential
high impact on world financial markets? Let’s drill down.
As it happens, there is a global currency.
It’s called the "U.S. dollar.”
Most international trade is priced in dollars. The Bretton Woods
international monetary system invested the dollar, which then was defined as
and (internationally) was legally convertible to gold at $35/oz, with
global currency status. France’s then-finance minister, later its
president, Valéry Giscard d'Estaing, called the “reserve currency”
status of the dollar -- its status, along with gold, as global currency --
an “exorbitant privilege.”
By this d'Estaing was alluding to the fact, as summarized at Wikipedia, that
"As American economist Barry Eichengreen summarized: 'It costs only a few
cents for the Bureau of Engraving and Printing to produce a $100 bill, but
other countries had to pony up $100 of actual goods in order to obtain one.'
" That privilege, which made great sense during the period immediately after
World War II, became a curse.
In 1971 President Nixon, under the influence of his Svengali-like Treasury
Secretary John Connally, "suspend[ed] temporarily the convertibility of the
dollar into gold." That closure proved durable instead of temporary. The
dollar became, and remains, the world's global currency.
What had been an “exorbitant privilege” devolved into an exorbitant
liability. As my former professional colleague John D. Mueller, of the
Ethics and Public Policy Center, formerly Rep. Jack Kemp's chief economist,
writing in the Wall Street Journal in Trump's Real Trade Problem Is Money
recently and astutely observed:
a monetary system based on a reserve currency is unsustainable, since
foreign official dollar reserves (for example) are acquired and must be
repaid in goods. In other words, the increase in official dollar reserves
equals the net exports of the rest of the world, which means it must also
equal U.S. international payments deficits—an unsustainable situation.
In other words, if President Trump wishes to address America’s merchandise
trade deficit (balanced to perfection, of course, by a capital accounts
surplus) he will find that allowing the dollar to be used as the global
currency is the real snake in the economic woodpile. The dollar’s burden
as the international reserve currency, not currency manipulation by our
trading partners or bad treaties, is the true villain in the ongoing
melodrama of crummy job creation.
Mueller’s Wall Street Journal column enumerates the three options open to
President Trump:
First, muddle along under the current “dollar standard,” a position
supported by resigned foreigners and some nostalgic Americans—among them
Bryan Riley and William Wilson at the Heritage Foundation, and James
Pethokoukis at the American Enterprise Institute.
Second, turn the International Monetary Fund into a world central bank
issuing paper (e.g., special drawing rights) reserves—as proposed in 1943
by Keynes, since the 1960s by Robert A. Mundell, and in 2009 by Zhou
Xiaochuan, governor of the People’s Bank of China. Drawbacks: This kind of
standard is highly political and the allocation of special drawing rights
essentially arbitrary, since the IMF produces no goods.
Third, adopt a modernized international gold standard, as proposed in the
1960s by Rueff and in 1984 by his protégé Lewis E. Lehrman …and then-Rep.
Jack Kemp.
To “muddle along” would, of course, be entirely antithetical to Trump’s
promise to Make America Great Again. It would destroy his crucial commitment
to get the economy growing at 3%+ -- vastly faster than it has for the past
17 years -- which also happens to be the recipe for robust job creation
and upward income mobility for workers. It also is the essential ingredient
for balancing the federal budget while rebuilding our infrastructure and
military.
To turn the IMF into a world central bank would, of course, be anathema to
Trump’s economic nationalism. To subordinate the dollar to the IMF’s SDR
would be equivalent to lowering Old Glory and replacing the American flag
with the flag of the United Nations on every flagpole in America.
Unthinkable under a Trump administration.
That leaves the third option, to “adopt a modernized international gold
standard, as proposed in the 1960s by Rueff and in 1984 by his protégé
Lewis E. Lehrman … and then-Rep. Jack Kemp” (whose eponymous foundation I
advise). To this one should add, as Forbes.com contributor Nathan Lewis has
shrewdly observed, the removal of tax and regulatory barriers to the use of
gold as currency.
As I have repeatedly observed Donald Trump shows a strong affinity for gold.
He has also shown a keen intuitive grasp of how the gold standard was
crucial to having made America great:
Donald Trump: “We used to have a very, very solid country because it was
based on a gold standard,” he told WMUR television in New Hampshire in
March last year. But he said it would be tough to bring it back because “we
don’t have the gold. Other places have the gold.”
Trump’s comment to GQ: "Bringing back the gold standard would be very hard
to do, but boy, would it be wonderful. We’d have a standard on which to
base our money."
Trump has been misled to believe that “we don’t have the gold. Other
places have the gold.” In fact, the United States, Germany, and the IMF
together have about as much gold as the rest of the world combined and
America has well more than Germany and the IMF combined. [Note: This column
has been updated to clarify that the United States has well more gold than
Germany and the IMF combined but not, as originally stated, more than twice
as much.]
We have the gold. Bringing back the gold standard would not be very hard to
do. |
|
