carnage . , , , tsunami . . . . storm . . . . When the USD breaks, snaps, crumbles, or otherwise violently diverges from norm, as opposed to gently settles to another exchange rate
Well, now I understand why you use such violent metaphors. Life in a pegged exchange rate system is like that.
As is typical with people who get religion, all has become clearer to me. I once was lost but now am found. I have been lecturing everybody on the gospel according to Mundell-Fleming, and you give me such wonderful examples.
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Life in a floating exchange system is so much more pleasant. One simply . . . . floats . . . . in the ocean, as the tsunami passes underneath.
By the way, I think I have posted before that sometimes ships are lost at sea after being swamped by gigantic waves that come out of nowhere, so sometimes the tsunami doesn't pass underneath, but usually they do.
I am working on a way to demonstrate the Hume price-specie flow model to explain why boom and bust are inevitable in a capitalist economy. Not done with it, I think next week.
And the great lesson of the 20th century is that command economies don't work.
So now we get to find out whether mixed economies really can dampen the oscillations to diminish the loss of equilibrium.
I would not count on that 7.8 peg holding. Can you short the HK dollar? |
