Quote:
Originally Posted by Ray
I understand very little of economics, but if this is what is going on, then it is most distressing.
I , however, know that it did create a flutter when Saddam and Iran wanted to change the instrument of oil trade to the Euros and it was said that this would have a serious repercussion on the US economy.
I think I will revisit those articles in view of this article by the Senator, which was quite an eye opener.
Does anyone have any idea where one could read the Minutes of the Brentwood Conference that made the Dollar the convertible currency?
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Sir,
It's the Bretton Woods conference, which created the evil institutions of the IMF and World Bank, as well as the fixed exchange regime, with the US (and hence, the USD) being the center of the regime. Fixed exchange rate regimes along with freedom of movement for capital has proven to be a disaster, and so the collapse of the Bretton Woods regime in terms of exchange rates and the gold standard is not a surprise.
If you have access to a library, I'd recommend "Too Sensational: On the Choice of Exchange Rate Regimes" by W. Max Corden. It provides some very cursory information on the failure of the Bretton Woods regime, and then covers in-depth while fixed or even fixed but adjustable rate schemes are unsustainable given the ability of capital to move across borders.
As far as the effects of converting to the euro, there is also the question of international trade flows, and if you look at SE Asia, the major trading partner is the US. This is the engine of SE Asian growth and US consumption, and the good Congressman doesn't address this one bit.
The following article explains much of the last paragraph, and curiously, these economists don't find it important to mention oil pricing in dollars a single time (it was published three years after Saddam's switch to euros, but just prior to Iran's unexecuted plans).
http://www.frbsf.org/economics/confe...0502/w9971.pdf