Thursday, May 4, 2017

Matthew C. Klein — If you like the euro, why not just call for a global gold standard?

Members of the single currency are forced to issue obligations in a currency none of them can print. They made the choice to sacrifice their monetary sovereignty in exchange for lower costs of trade and greater cross-border financial flows. For the many members hoping to piggyback off Germany’s postwar record of stability, joining the euro would also mean eliminating the risk premiums associated with excessive inflation and devaluation. These were the same arguments that were made about the virtues of the gold standard in the 19th century....
When currency issuers become currency users.

FT Alphaville (may require free registration)
If you like the euro, why not just call for a global gold standard?
Matthew C. Klein
ht Lambert Stether at Naked Capitalism

1 comment:

Andrew Anderson said...

Let's see:

1) Let's have a government-privileged usury cartel in order to recurrently wreck the economy.
2) Let's also limit fiat creation to the mining rate of some stupid, shiny metal to prevent the monetary sovereign from ameliorating the damage said usury cartel causes.

Sounds fair to me and what could go wrong except Great Depression II and WW III? /sarc

Hey stupids, a shiny metal cannot substitute for ethical fiat and credit creation. I suggest you read Moses and forget Mises.