Economy · first published 2019-10-31
The international monetary system | Sami Miettinen on Puheenaihe 44
Sami Miettinen and Sam Laakso on Puheenaihe in October 2019, at the tail of what was then the longest expansion in American history and one of the weakest by average growth. The argument that carries the episode is about pegs: a gold standard rebalances itself, but the mechanism breaks when a local currency is tied one-to-one to an international settlement currency while labour markets stay rigid — which is precisely the euro's defect. Also covered: the policy rate as a deliberate choice, Russia's digital gold-backed currency, Libra as an SDR-like basket, the scale of crypto, and housing.
The international monetary system | Sami Miettinen on Puheenaihe 44
Summary: Sami Miettinen and Sam Laakso on Puheenaihe in October 2019, at the tail of what was then the longest expansion in American history and one of the weakest by average growth. The argument that carries the episode is about pegs: a gold standard rebalances itself, but the mechanism breaks when a local currency is tied one-to-one to an international settlement currency while labour markets stay rigid — which is precisely the euro’s defect. Also covered: the policy rate as a deliberate choice, Russia’s digital gold-backed currency, Libra as an SDR-like basket, the scale of crypto, and housing.
Key Themes
- What is money, and can you print more of it: Discussed from 00:00 onward.
- Expansions do not die of old age; the longest and the weakest: Discussed from 03:00 onward.
- Rates back toward zero, and Europe permanently negative: Discussed from 06:00 onward.
- Cheap debt for states as the point of the exercise: Discussed from 09:00 onward.
- Productivity and population growth as the real drag: Discussed from 12:00 onward.
- Will the euro split back into national currencies: Discussed from 15:00 onward.
- What a national currency gives you that a supranational one does not: Discussed from 18:00 onward.
- Central banks buying gold; Russia’s digital gold-backed currency: Discussed from 21:00 onward.
- Why gold, and what alternatives to fiat are being tried: Discussed from 24:00 onward.
- The gold standard’s real flaw is the peg, and the euro shares it: Discussed from 27:00 onward.
- Automatic rebalancing against rigid labour markets: Discussed from 30:00 onward.
- The SDR, and Libra as a four-currency basket: Discussed from 33:00 onward.
- Scale: €200bn of crypto against €21,000bn of euro: Discussed from 36:00 onward.
- Debt has to be adjusted down; taking the power to borrow away: Discussed from 39:00 onward.
- A Greek euro deposit and a German one are not the same asset: Discussed from 42:00 onward.
- The banking union’s €60bn against a €30,000bn balance sheet: Discussed from 45:00 onward.
- Asset-class inflation and a Nordic mortgage comparison: Discussed from 48:00 onward.
- China’s fifty million empty apartments: Discussed from 51:00 onward.
- Leveraging quality property but not equities: Discussed from 54:00 onward.
- Closing: Discussed from 57:00 onward.