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To: Thomas F. O'Connor who wrote (7582)	2/15/1998 2:19:00 AM
From: dave	Read Replies (2) \| Respond to of 116993

Dear Thomas I have read your URLs with great interest and have learned much. From what I have gleaned from these,and many other posts on this thread is the main reason for gold's decline,and possible it's death. The creation of currency boards makes all the sense in the world. If a country adapts this system and uses the dollar, to-day, great.It creates stability and low inflation, so use the dollar.If in 5 years the euro is the ONE,use it.If in 10 years the yen is the ONE,use it. It makes perfect sense, and explains to me why countries have been selling their gold.A great study of this system is Argentina.It has worked well for about 7 years and they have just recently sold ALL their gold reserves.If their currency does not tank in the next while it might be more proof of the best currency system available.IMHO Thank you Dave T.

To: Thomas F. O'Connor who wrote (7582)	2/15/1998 5:54:00 AM
From: Bobby Yellin	Respond to of 116993

Thanks for the great urls...I am still puzzled..hope somebody finds an article by Rudi G(?) from MIT to see what he says.. I think I am missing something..it would imply that the government of the dominant currency would have almost total power over the interest rates policies of all pegged currencies in the world..until something happens to the dominant currency.. would it imply that the government with the dominant currency not be able to print its own money at will? The dominant currency could just be the top of the pyramid.. I have read repeatedly that there is so much counterfeit US money floating around the world..what would that effect be? Would currency stability in the countries mentioned have been if US had entered into a recession rather than growing at a steady rate? Something seems so very wrong..low interest rates fueled by lower interest rates in Japan appears to have created incredible paper wealth..the high confidence rating in US appears to me to the result of a lot of citizens seeing their retirement funds replacing higher wages and as long as the stock market fuels their dreams of retiring wealthy because of their excessive gains in their retirement funds consumer confidence and the dollar will remain strong.. also different countries have different strengths(different products to produce) If gold and natural resources were booming, wouldn't that have helped out Indonesia? Wasn't the major problem of the collapse of SE Asia the flow of foreign money fueling unbounded building and oversupply and then the abrupt turn around of asking for the money back? It just sounds like more of the same to me...since the basis of the peg would still abitrary at the top of the heep.. Help (ps wouldn't one think that eventually a lot of the citizens of these countries which are now in a depression(maybe a short one) will start voting out their governments since their lives have been so severely disrupted by big money?)

To: Thomas F. O'Connor who wrote (7582)	2/15/1998 6:43:00 AM
From: Gabriela Neri	Respond to of 116993

How much gold does the Indonesian Central Bank own?-----I doubt very much. Also, these currency boards will never be adopted in any developed countries within the near future or in any country who refuses to be completely dominated by the US . Of course, those that refuse must have the wherewithall to maintain themselves without the assistance of our enormous resources. It has to be a country with its back to the wall and without other options to essentially give up all control of their monetary policy to the Americans. Mexico is unable to do so because politically it would be suicide. Argentina had an extremely strong leader and was able to get it done. Also, what happens when the dollar starts heading south.

To: Thomas F. O'Connor who wrote (7582)	2/15/1998 7:33:00 AM
From: Michael	Read Replies (1) \| Respond to of 116993

Thomas, The reason (IMHO) that the IMF/US are against the currency board concept for Indonesia is that they question whether the Suharto regime has the credibility/integrity to run one. The scenario many people are concerned about is that the CBS will be set up using IMF funds. The crony capital will then use this to cash out their Rupiah, at which point the thing will fail, chaos returns and the insiders will yet again make huge profits at someone else's expense. Based on the corruption observed in Indonesia this seems a credible concern. Perhaps i am missing something, but i don't see what controls are in the CBS which would prevent this happening. Michael

To: Thomas F. O'Connor who wrote (7582)	2/17/1998 9:39:00 AM
From: CuriousGeorge	Respond to of 116993

EU backs tough IMF stance on Indonesia February 16, 1998 ÿBRUSSELS, Belgium (Reuters) - European Union finance ministers Monday gave full backing to the International Monetary Fund's tough stance against plans by Indonesia to introduce a fixed-rate currency system. ÿ "We all strongly agreed with (IMF Managing Director Michel Camdessus) that it would be premature for Indonesia to adopt a currency board now," British Finance Minister Gordon Brown told a news conference, referring to the fixed-rate "currency board" system. ÿ "There are a number of pre-conditions that have to be met first." ÿ Indonesia Monday appeared ready to press ahead with a proposal for a fixed exchange rate system locking the rupiah to the dollar, despite the risk it could undermine a $43 billion bailout package put together by the IMF. ÿ The deputy secretary-general of the Indonesian Council, Fuad Bawazier, was reported as saying the government was on track to proceed with the plan despite growing international pressure against it. The council was set up to give advice on how the country can climb out of its economic crisis. ÿ Camdessus, taking part in an EU finance ministers' meeting for the first time in his IMF role, said there was a real risk the lending agency would stop financial aid for Indonesia if the currency plan went ahead. ÿ "We are not yet there. We are still discussing with the Indonesian authorities...and I hope we will come to some arrangement avoiding the very perverse effects on Indonesia of a currency board in the present circumstances and to be confronted with the sad decision of not being able to continue our support," Camdessus told Reuters Financial Television. ÿ Camdessus said the IMF executive board was unanimous in its opposition to Indonesia's plan. If Jakarta went ahead, the fund could stop the next $3 billion in aid due in March. ÿ Camdessus said the IMF did not oppose a fixed rate system in the right circumstances, but that it was "very radical, very powerful medicine," and could end up having "killing effects" if the "patient is very ill and in poor shape." ÿ Several conditions had to be met before such a system would work in any country, he said. First, the economy and banking system must be able to withstand volatile interest rates; reserves had to be built up, and a country needed a stable external debt situation. ÿ "All these elements are not yet there in Indonesia," Camdessus said. "We are working to establish them. If we get there we can discuss a currency board, but we're not there yet." ÿ Brown hinted the international community may take new steps to ease the plight of ordinary Indonesians facing food shortages and other hardships as a result of the crisis. ÿ "Social distress is an issue we are concerned about and I will be discussing this with World Bank President (James) Wolfensohn in London tomorrow and hope to be able to say more later this week," the British minister said. ÿ