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To: B. Thomson who wrote (1725)	3/27/1998 1:59:00 PM
From: Chip McVickar	Read Replies (3) \| Respond to of 3335

Hello B Thomson >Powerful Currency< My best advice is to read a book by Judy Shelton -- "Money Meltdown" Then find the articles in the WSJ March 24-25 by Robert Mundell as well as many others that are beginning to show up with more frequency in many publications like the Economist, etc. Money Meltdown It is an excellant introduction to international currencies and this modern experimentation with floated currencies - a part of our world since Nixon. The historical struggle between floaters and hard currency defenders is a significant and on-going "conversation" about how to place value on 'anything' for sale. It is a very ancient problem between individuals and societies. How do we qualify 'what value' to place on exchanging goods..? Your sense of the value of my trading goods may be differnt mine. Historically both hard and soft(paper) has been used to convey value. Coins of all sorts are hard -- land, goats and food stuffs, silk are all hard. Soft money: is simply put a promissory note and it represented a giant leap in handling commercial transactions. Coming with the promise to repay-in-kind from ones stores of value at a later time. Enter Nixon...he was a piece of work.... HE tossed-out both hard and soft money.....for what was called "flexable exchange rates". They essentially have no value except a percieved system of exchangable value that can floated upon market considerations and demands. Theoretically "pineneedles" could be used to back up a floating monetary system if you and I could agree on their store of value. The evoloution of our international monetary system has produced great prosperity and it has worked because of people like Greenspan. But it is an inherantly unstable system that may yet cause us all great grief. How do you protect yourself: If you like hard currencies - buy gold and silver coins and dig a hole in the ground...."for goodness-sake don't use a bank"....on a safe farm in a good climate with water. If you are a soft money man - short the dollar with futures or options. If your a "flexable currency" kind of person - we better start working out out a deal to value my store-house of 'pineneedles.' It can go either way......>>chuckle<< Fun aside - the dollar as a base currency is not threatened at present. But equilibrium always wins and the structural debt of the USA as well as many other countries may someday cause significant disruptions to our peace of mind. "Nobody quite know's what is going to happen...we are in uncharted waters" That's a quote from Treasury Sect Rubin...just a few weeks age on the Jim Leher News Hour Hope this helps Chip