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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (260)	6/24/1998 11:24:00 AM
From: Henry Volquardsen	Respond to of 3536

Chip, Sorry if I came off a litle hard edged last night. I had just gotten back from the Stadium where the Braves beat my Yanks so I was in a cantakerous mood. As far as my core economic philosophy, I am a libertarian and have followed the writings of von Mises, von Hayek, Friedman et al. But I am a practical man and realize there is some value in other approaches. Not all Keynesians are bad and I am open to their points of view. I just reacted badly to the mention of Galbraith's name more because of a dislike of him personally. I've always found him somewhat smug, condescending and glib. As far as your comments re currency trends, you make a valid and important point re the Euro. It will require an unheard of amount of cooperation and civility. And this will be complicated by the very real differences in cultural attitudes and perceptions between Germany and France. Wim Duisenberg is a capable and credible banker but he will have an interesting high wire act to perform. There are some who believe, and I agree with, that only full political union will allow the Euro to survive and will become inevitable. This could lead to a very volatile period in European economics and politics. As far as currency boards, I favor them in certain circumstances. They work for Hong Kong. I oppose them in Indonesia because of the ethical questions surrounding the government. But Currency boards are not necesarrily in conflict with free market principles. In its purest form it is a one to one backing of one nation's currency with anothers. In effect the country in question surrenders all control of monetary policy. It is little different in effect from a gold standard just substituting anothe currency for gold. Henry

To: Chip McVickar who wrote (260)	6/24/1998 11:28:00 AM
From: Jerry in Omaha	Read Replies (1) \| Respond to of 3536

Chip, Thank you for your thoughtful articulate contributions greatly assisting my dim understanding of matters monetary. I haven't contributed here for a while and your amply demonstrated intellectual generosity prompts me to post. I have just finished reading the 1997 Pulitzer Prize winning book for non-fiction; Guns, Germs and Steel, The Fates of Human Societies, by Jared Diamond and recommend it highly to the thread. Henry in one of the first postings on the thread used an interesting word which actually may originate in the book's 14th chapter: "From Egalitarianism to Kleptocracy." For the benefit of the current topic of China on the thread I would like to quote two paragraphs from page 411 of the Epilog: The Future of Human History as a Science. " ...The long list of its [China's] major technological firsts includes cast iron, the compass, gunpowder, paper, printing, and many others mentioned earlier. It also led the world in political power, navigation, and control of the seas. In the early 15th century it sent treasure fleets, each consisting of hundreds of ships up to 400 feet long and with total crews of up to 28,000, across the Indian Ocean as far as the east coast of Africa, decades before Columbus's three puny ships crossed the narrow Atlantic Ocean to the America's east coast. Why didn't Chinese ships proceed around Africa's southern cape westward and colonize Europe, before Vasco da Gama's own three puny ships rounded the Cape of Good Hope east ward and launched Europe's colonization of East Asia? Why didn't Chinese ships cross the Pacific to colonize the Americas' west coast? Why in brief, did China lose its technological lead to the formerly so backward Europe? "The end of China's treasure fleets gives us a clue. Seven of those fleets sailed from China between A.D. 1405 and 1433. They were then suspended as a result of a typical aberration of local politics that could happen anywhere in the world: a power struggle between two factions at the Chinese court (the eunuchs and their opponents). The former faction had been identified with sending and captaining the fleets. Hence when the latter faction gained the upper hand in a power struggle, it stopped sending fleets, eventually dismantled the shipyards, and forbade oceangoing shipping. The episode is reminiscent of the legislation that strangled development of public electric lighting in London in the 1880s, the isolationism of the United States between the First and Second World Wars, and any number of backward steps in any number of countries, all motivated by local political issues. But in China there was a difference, because the entire region was politically unified. One decision became irreversible, because no shipyards remained to turn out ships that would prove the folly of that temporary decision, and to serve as a focus for rebuilding other shipyards." A good subject for contemplation would be to compare the non-shipbuilding policy of yore with the current policy of one family one child representing, as it does, a significant adjustment of the most basic fundamental of human society, the family. Net net, the Chinese, should they have their way, will eliminate from their society the following family categories: brothers, sisters, aunts, uncles and cousins. Pertinant to the topics of this thread are the considerations of the monolithic nature of monopolistic governmental power existing now and throughout most of the history of China and the effect it will continue to have on the rest of the world. Is there a chance they will "Culturally Revolve" themselves once again to chaos and instability? The struggle between consolidation and fragmentation whether in China and its global policy or the current wave of merger mania justified by the imperatives of strategic corporate global positioning may be an issue resolved by the embryonic Science of History as envisioned by Mr. Diamond. End of book report. Jerard P