In currency wars, where some countries pursue policies deliberately aimed at cheapening their currencies, there are generally winners and losers. Judging by recent currency movements, Europe is the biggest loser in the present global currency war. Since the middle of last year, the euro has appreciated over 25 percent compared to the Japanese yen and over 10 percent compared to the U.S. dollar. This is most unfortunate, since an appreciating currency is the last thing that Europe needs if its economy is to emerge from economic recession.
The principal factor driving recent currency movements has been the divergent monetary policies of the world’s major central banks. While the U.S. Federal Reserve, the Bank of Japan, and the Bank of England are all now engaged in maintaining extraordinarily low interest rates and are resorting to aggressive quantitative easing, the more conservative European Central Bank (ECB) is bucking that trend for fear of igniting longer-run inflation. Thus, it is little surprise that the countries aggressively printing money are seeing their currencies depreciating against that of the European economic zone, whose central bank is hewing to a much less expansionary monetary policy stance.
Sadly for Europe, the prospects for a weakening euro anytime soon do not appear to be good. The U.S. Federal Reserve has committed to continue buying $85 billion a month in mortgage-backed securities and U.S. Treasury bonds until U.S. unemployment moves toward 6.5 percent. Given the tepid rate of U.S. economic growth in prospect for 2013, such a reduction in unemployment will presumably not come close to occurring this year. This would imply that the Federal Reserve will continue to aggressively print money throughout the year. Meanwhile, prospective changes at the helms of the Bank of Japan and the Bank of England are suggestive of more aggressive quantitative easing in both Japan and the United Kingdom for the rest of this year, as both of those countries opt for more accommodative monetary policies to spur economic growth.
George Gilder, whose new book publishes today, is one of the original pillars of Supply Side economics. As stated by Discovery Institute, which he co-founded, “Mr. Gilder pioneered the formulation of supply-side economics when he served as Chairman of the Lehrman Institute’s Economic Roundtable, as Program Director for the Manhattan Institute….”
He was the living writer most quoted by President Reagan. And he is back with his most brilliant work yet — one of potentially explosive importance if taken to heart by our political and policy thought leaders. It is a radical guide, with surprising insights on almost every page, to the creation of a new era of vibrant prosperity.
As reviewer Paul Brodsky, a professional investor in New York City, perceptively notes,
"Lewis Lehrman is one of a very small group of contemporary gold advocates able to successfully bridge the gap separating practical conservative intellectualism from fleeting, half-baked idealism. His CV lists great success across many fields including education (degrees and teaching fellowships from Yale and Harvard); industry (past president of Rite Aid); politics (narrow loser to Mario Cuomo in the 1982 New York governor’s race); finance, (past Morgan Stanley managing director); private sector entrepreneur (founder, L. E. Lehrman & Company); public sector advocate (founder, Lehrman Institute); historian (author, Lincoln at Peoria: The Turning Point); and recognized philanthropist (awarded the National Humanities Medal by George W. Bush in an Oval Office ceremony). ... Only someone erudite and elegant in demeanor could hope to pull it off . In an irreconcilably over-leveraged world where irritated bond vigilantes question economic sustainability and angry Tea Partiers protest the immorality of it all, Lehrman’s views are considered and his convictions carry weight. He brings gravitas to his cause, and he does so from within as a member of the club."
Before the Fed: JP Morgan Summons the Bank Presidents
"Finally, on the night of Sunday, November 2, Morgan summoned the presidents of the major New York banks to his new library, at the corner of Madison Avenue and Thirty-sixth Street, an Italian Renaissance-style palace he had built next door to his house to showcase his collection of rare books, manuscripts, and other artwork. Its marble floors, frescoed ceilings, walls lined with tapestries and triple-tiered bookcases of Circasian walnut, crammed full of rare Bibles and illuminated medieval manuscripts, made it an incongruous setting for a meeting of the banking establishment. Once the moneymen had gathered, Morgan had the great ornamental bronze doors to the library locked and refused to let anyone leave until all had collectively agreed to commit a further $25 million to the rescue fund."
— Liaquat Ahamed, Lords of Finance (Penguin Books, 2009, p. 54)
Lately we have been engulfed by headlines reporting financial turmoil on every continent, in almost every nation, large and small. The commissars of central planning who so marred the history of the 20th century have been replaced by central banks in the 21st. In Cyprus, the new leadership now dares to confiscate citizens’ wealth with a one-time tax of up to 60 percent on bank deposits above 100,000 euros. Self-interested prime ministers blame continental monetary policies for instigating the currency wars that they themselves surreptitiously carry on.
Constitution.org provides an extensive and thoughtful Memorandum of Law by Larry Becraft, Esq., of Huntsville, Alabama, on Article I, Section 10, clause 1 of the US Constitution.
Sir William Blackstone courtesy of Wikipedia
One of many interesting matters the Memorandum treats is Blackstone's Commentaries, a book that was a fixture in the...
The value of the yuan has been slowly rising. The value of the Japanese yen has been sharply falling. Abenomics is attempting to reflate the Japanese economic – slowly, slowly. “Japan is back!” Prime Minister Shinzo Abe tells the Japanese.
Coming back isn’t easy. The Financial Times’ Jonathan Soble has noted...