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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (28723)	2/10/2004 5:09:31 AM
From: Dayuhan	Read Replies (2) \| Respond to of 793688

Hi Steven - it appears you've come out of the jungle long enough to have a read on Politics for Pros. And it's always wonderful to "see" you. I'm in the jungle (pine forest mountaintop, actually) right now. Satellite dish. Wonderful thing. Wonderful to see you too, as always. I wish our irregular visits here coincided more often. if you have the time and bandwidth, explain what appears to be your assertion that the pound and the franc "distorted values." Briefly, because I have to go home and cook dinner (it's that time in my timezone): During the period in question (roughly 1885-1930) the european currencies, and in particular the British pound, were virtually the only medium in which anyone could trade internationally. That naturally led to high demand for sterling, and the centuries-old tight money policies of the exchequer severely restricted supply. What that means is that if you showed up in Palestine - or in any number of other places - in 1900 with just a few pounds sterling, you could buy a whole hell of a lot for it. There's no way the locals could compete - their currency was simply meaningless by comparison. The modern equivalent (purely from a currency value perspective) would be something like arriving in Bangladesh with US Dollars, then buying up estates and kicking off the tenants, with the avowed intention of declaring sovereignty over the entire country once you had introduced enough people. You wouldn't expect the locals to like it much, though quite a few would sell to you (people will sell anything if offered an amount far enough beyond market price), and even more would try to make anything they could for themselves out of your presence. Land values would soar, and people would sell because they were getting so much more than what they paid, and also because they figured that once you achieved sovereignty you'd just take it in any event. Nobody but the newcomers would be able to pay the new prices. That produces what I called a distorted market: a market in which an external source of demand has radically altered the previous supply/demand equation.