Michael Bordo (Rutgers; NBRE; Stanford) and Robert McCauley (Boston; Oxford):
*[…] What if something happens in 2026 that leads global dollar funding markets to seize up?*
*It is essential that the Fed does the job that it knows how to do. But what if doing so strikes someone in power as unreciprocated generosity? Uncle Sucker “bailing out Europe again,” to use the recent, unguarded phrase of the vice-president in a military context? Why not condition the Fed central bank swaps on tariffs, US exports or worthy geopolitical goals — as Stephen Miran, who’s confirmation hearing before the Senate Banking Committee is today, has argued?*
*A salient case was the Austrian crisis of 1931. The French authorities, holding lots of golden chips, made their help for the Austrian central bank contingent on no customs union between Austria and Germany. The contingency was refused.*
*Crisis unchecked spread to Germany, toppling a Jewish-run bank (Danatbank) and leading to a moratorium on German international debts. The pound sterling abandoned its gold peg in September 1931.*
*Recent research shows that in the German elections of 1931 the National Socialists made particularly strong gains where the Danatbank had a larger presence. France realised that its clever financial plan had gone awry only later, when German Panzer divisions rolled over its border in May 1940.*
*The stability of the global use of the dollar requires that members of the Board of Governors understand what must be done when global dollar funding markets seize up. Were the Fed not to do what it must, reports of the death of the dollar’s global role — that have circulated without ground for two generations — could prove for once not greatly exaggerated.*
*Senators, history will not look kindly on your playing politics with your duty to advise and consent on Fed appointments. A wrong Fed could do the dollar in.*
goddoc on
A weak dollar is the plan all along. Russia is happy, the Broligarchs are happy, the christofascists are happy, and Donnie and the Pedos are happy cuz they will make bank on crypto. You’re welcome.
Affectionate-Panic-1 on
There is some logic behind the idea that the strong dollar in recent years has hurt American labor. But overall I think we benefit from being the world’s reserve currency and jeopardizing that is bad overall.
3 Comments
Michael Bordo (Rutgers; NBRE; Stanford) and Robert McCauley (Boston; Oxford):
*[…] What if something happens in 2026 that leads global dollar funding markets to seize up?*
*It is essential that the Fed does the job that it knows how to do. But what if doing so strikes someone in power as unreciprocated generosity? Uncle Sucker “bailing out Europe again,” to use the recent, unguarded phrase of the vice-president in a military context? Why not condition the Fed central bank swaps on tariffs, US exports or worthy geopolitical goals — as Stephen Miran, who’s confirmation hearing before the Senate Banking Committee is today, has argued?*
*A salient case was the Austrian crisis of 1931. The French authorities, holding lots of golden chips, made their help for the Austrian central bank contingent on no customs union between Austria and Germany. The contingency was refused.*
*Crisis unchecked spread to Germany, toppling a Jewish-run bank (Danatbank) and leading to a moratorium on German international debts. The pound sterling abandoned its gold peg in September 1931.*
*Recent research shows that in the German elections of 1931 the National Socialists made particularly strong gains where the Danatbank had a larger presence. France realised that its clever financial plan had gone awry only later, when German Panzer divisions rolled over its border in May 1940.*
*The stability of the global use of the dollar requires that members of the Board of Governors understand what must be done when global dollar funding markets seize up. Were the Fed not to do what it must, reports of the death of the dollar’s global role — that have circulated without ground for two generations — could prove for once not greatly exaggerated.*
*Senators, history will not look kindly on your playing politics with your duty to advise and consent on Fed appointments. A wrong Fed could do the dollar in.*
A weak dollar is the plan all along. Russia is happy, the Broligarchs are happy, the christofascists are happy, and Donnie and the Pedos are happy cuz they will make bank on crypto. You’re welcome.
There is some logic behind the idea that the strong dollar in recent years has hurt American labor. But overall I think we benefit from being the world’s reserve currency and jeopardizing that is bad overall.