Henry, sounds reasonable to me, but will the money center banks go for locally denominated debt as opposed to dollar debt, especially if the currencies are floated?
Of course, decoupling the currencies from the dollar is the nightmare scenario for the doomsayers, who think that without the peg the currencies will be ravaged by the speculators (Mr. Soros, where are you?), but you are right, they would eventually adjust to their true market value. Hey, a market economy. What a novel concept!
Which brings us back to the gold question: without the peg, how do you back a fiat currency and protect it from speculators? If not gold, then...?
JS |
