China’s economy has slowed but it has not stopped. “Investors, long enamored with the yuan, have increasingly soured on the Chinese currency and are boosting their bests that it will decline against the dollar in coming months,” the Wall Street Journal’s Daniel Inman has written. He noted that “a slowing Chinese economy and a decision by the central bank to loosen its tight control over the currency have driven this year’s decline. Many investors who had been betting that the yuan would rise have reversed their positions.”
Of course, when the currency floats against a reserve currency, nations do what they can to protect their own interests. C. Fred Bergsten of the Peterson Institute for International Economics has observed: “Here’s the world’s second-biggest economy and the biggest global trader, aggressively and blatantly manipulating its currency for over five years to keep it hugely undervalued. That’s exactly what the whole Bretton Woods system was designed to avoid replicating after the 1930s, so in that sense the system has failed the stress test.”
China’s actions don’t make former Massachusetts Governor Mitt Romney happy. He has said he wants ‘to make sure that if a nation cheats like China has cheated, we call them on the carpet and don’t let it continue.”
China, of course, may yet become a transformer – much like the bull Optimus Prime who is defeating all comers in Chinese bull fights, according to the Wall Street Journal. “Trade is not the only measure of China’s economic influence,” the Economist has noted. “Many foreign companies have set up shop inside the country, profiting from its market without having to export to it.” It reported: “China may not be a member of the G7 group of big, rich democracies. But it is already a member of the so-called S5, or Systemic Five, a group of economies subject to extra IMF attention because of their ‘systemic’ significance. China, according to the fund, is the most ‘central’ trading partner for 78 countries. Its appetite for imports, especially the base metals and oil that feed it vast industrial machine, flatters th exports of countries as far afield as Azerbaijan and Angola.”
Indeed, there is every indication that China will remain the bull in the shop of international trade and monetary policy – until a competent matador like the gold standard enters the arena.
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.
America recently celebrated — well, maybe we didn’t celebrate – the 80th anniversary of Franklin Roosevelt’s action to end to the gold standard. But America is also celebrating – well, maybe not everyone is celebrating – the 100th anniversary of the legislation creating the Federal Reserve System.
As Lewis E. Lehrman...
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...