The lesson here is that without political will, fiat money in any form—be it in a monetary union, anchored to a reserve currency or run by the sovereign—is unreliable. As Messrs. Steil and Hinds note, "money untethered to a commodity gives rise to inflation when managed by corrupt, irresponsible or incompetent rulers," thereby covering Greece, Argentina and Venezuela in one breath.
Harkening back to the wisdom of a 15th century Spanish canon lawyer, the authors capture today's fiat currency problem: "The ruler's power to create value from the valueless by designating it 'money' was bound to lead to inflation."
Showing posts with label Venezuela. Show all posts
Showing posts with label Venezuela. Show all posts
17 May 2010
Inflationary Quote Of The Day
22 September 2009
'Hopeychangers'' Pusillanimous Retreat In Eastern Europe
In a sense, the health-care debate and the foreign-policy debacle are two sides of the same coin: For Britain and other great powers, the decision to build a hugely expensive welfare state at home entailed inevitably a long retreat from responsibilities abroad, with a thousand small betrayals of peripheral allies along the way. A few years ago, the great scholar Bernard Lewis warned, during the debate on withdrawal from Iraq, that America risked being seen as “harmless as an enemy and treacherous as a friend.” In Moscow and Tehran, on one hand, and Warsaw and Prague, on the other, they’re drawing their own conclusions.There's been a lot of talk lately that Barack Obama is the second coming of Jimmy Carter.
If only.
President Obama's posture towards North Korea, Venezuela, Iran, Russia, Honduras, Afghanistan, etc., makes President Carter look positively potent.
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