Richenbacher? Didn't he make guitars? Oh, Richebacher. Do you refer to Kurt Richebacher, the German, head of Dresdener Bank? (My computer doesn't do umlauts). That's the only Richebacher an Alta Vista search pulled up. Although at a cursory glance he was saying gloomy things about the world economy, so I guess that's the man.
I woke up, dreaming of Alan Greenspan. Did you watch his speech Wednesday? I did, wish I had a transcript, if anyone has it on net please post link?
Someone (on this thread? can't find it) posted complaining that that the U.S. government was manipulating the security market.
In retrospect, I think I understood Greenspan to say that, in light of the fact that the capacity to exploit currency inefficiencies had become so advanced, yes, the U.S. (central bank or Treasury department, not sure, need speech) WOULD intervene in the market, in order to thwart currency speculators and arbitrage players, so as to protect liquidity, and, ultimately stability, and so would every developed nation, and that the developing nations needed to develop the capacity to do so.
I think that this is a good thing, and that it is proper for the government to so. I believe in the free market, I am a small "l" libertarian, used to be a big "L" libertarian, but there are certain things that government does best, and providing currency is one.
My thesis is that, money is not the only form of wealth. Yet, without cash, it is impossible for the owner of certain kinds of wealth to exploit it. At this point, my concepts are no more developed than a children's book. I could write a kid's picture book, the farmer needs cash to buy seeds and fertilizer, so that he can use the wealth of the earth, the sun, the rain, and his equipment, to grow the crops and sell them. The mine owner needs cash to pay for the dynamite, the salaries of the miners, the earth-moving equipment, so that he can dig the minerals out of the earth and sell them. The factory owner needs cash to buy the raw materials and pay the workers, so he can manufacture the raw materials and sell them.
A promissory note executed by a reliable party, backed with a pledge of good, non-liquid assets is, or ought to be, as good as money in the bank, and as a shareholder of a bank, if my bank were unwilling to loan money under those terms, I would be most displeased.
Similarly, as a citizen, I believe it is a proper function of government to preserve the stability of the banking system so that those who need cash on these terms are able to get it.
I suspect that the cause of the great depression of the 1930's was the inability of banks to loan money to businesses with non-liquid assets, but I don't know how it happened. I admit that my understanding is rudementary, but the most interesting book on the issue is James Buchan's "Frozen Desire - the meaning of money."
CobaltBlue |
