Welcome address by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the 4th Bank of France- Deutsche Bundesbank Macroeconomics and Finance Conference, Paris, 24 May 2013.
"...This leads me to a couple of remarks on the institutional design of the European Monetary Union. Inspired by the hard lessons of history, the founders of EMU were especially concerned that governments might weaken the union through either debt monetisation or via a sovereign default that would cause financial instability in the area. These concerns were more than legitimate and led to the now famous Maastricht criteria. But one channel was not envisioned at the time: the possibility that a major financial shock could jeopardise fiscal sustainability, through large-scale bail-out programmes. In the case of the euro area, characterised by a high degree of financial integration, ignoring this risk exposed us to major disruptions...."
"...Indeed, we have learned a great deal from the past five years and have made progress at an unprecedented pace. EMU is now firmly on the road to a banking union. To a large extent, this is the very institutional mechanism that was lacking in the first place. Our OMTs have limited the scale of financial fragmentation and have greatly reduced the risk that increasing spreads might end in sovereign defaults. But the euro area needs an institutional framework capable of preventing the recurrence of such crises, essentially by decoupling financial risk from sovereign risk. The banking union thus consists of three major pillars: a Single Supervisory Mechanism, a supranational resolution mechanism, and a unified system of deposit insurance. For now, the first pillar of the banking union is the most advanced, but the other two are also in the pipeline and need to be pursued..."
Source: http://www.bis.org/review/r130524f.pdf
Thursday, May 30, 2013
BIS - ChN - After the global crisis, which models of growth?
Keynote speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the CIGS (The Canon Institute for Global Studies) – EHESS (Ecoles des Hautes Etudes en Sciences Sociales) International Symposium “After the global crisis, which models of growth?”, Tokyo, 3 October 2011
"As we all know, debt sustainability depends on three variables: the primary surplus, the growth rate and the interest rate. The relationship between those three parameters and debt can be expressed through a simple equation, the famous “unpleasant arithmetic”. Assessing sustainability seems therefore relatively straightforward. Many economists and market analysts on sovereign European debt simply assume low growth and high interest rates forever in peripheral countries – which enables them to conclude categorically that debt is not sustainable. A (slightly) more sophisticated and developed version of that story takes account of the impossibility, for Euro economies, to depreciate their exchange rates, therefore locking them into a low competitiveness and no growth equilibrium. I see three major problems with those analyses.
First, the competitiveness story does not hold. Take the UK, for instance. Its effective real exchange rate has depreciated by 23% over the last four years. And its exports have grown by a healthy 15%, in nominal terms, over the first six months of 2011. But Italy, Spain and Greece have done even better, with exports growing respectively by 16%, 19% and 37% during that same period, and, of course, no exchange rate adjustment. Equating competitiveness with exchange rate depreciation is therefore overly simplistic. This does not mean that efforts to improve competitiveness in many parts of the euro area should not be strengthened..."
"...The euro area is also the only major currency union with its external accounts in balance, which is an essential element of robustness and a strong guarantee of long-term solvency...."
Source: http://www.bis.org/review/r111006h.pdf
"As we all know, debt sustainability depends on three variables: the primary surplus, the growth rate and the interest rate. The relationship between those three parameters and debt can be expressed through a simple equation, the famous “unpleasant arithmetic”. Assessing sustainability seems therefore relatively straightforward. Many economists and market analysts on sovereign European debt simply assume low growth and high interest rates forever in peripheral countries – which enables them to conclude categorically that debt is not sustainable. A (slightly) more sophisticated and developed version of that story takes account of the impossibility, for Euro economies, to depreciate their exchange rates, therefore locking them into a low competitiveness and no growth equilibrium. I see three major problems with those analyses.
First, the competitiveness story does not hold. Take the UK, for instance. Its effective real exchange rate has depreciated by 23% over the last four years. And its exports have grown by a healthy 15%, in nominal terms, over the first six months of 2011. But Italy, Spain and Greece have done even better, with exports growing respectively by 16%, 19% and 37% during that same period, and, of course, no exchange rate adjustment. Equating competitiveness with exchange rate depreciation is therefore overly simplistic. This does not mean that efforts to improve competitiveness in many parts of the euro area should not be strengthened..."
"...The euro area is also the only major currency union with its external accounts in balance, which is an essential element of robustness and a strong guarantee of long-term solvency...."
Source: http://www.bis.org/review/r111006h.pdf
EU - Deposit Guarantee Schemes
Just an interesting link worth to dip deeper.
Source: http://ec.europa.eu/internal_market/bank/guarantee/
Source: http://ec.europa.eu/internal_market/bank/guarantee/
Tuesday, May 28, 2013
2013 - Ali al-Naimi - video
"His Excellency Ali al-Naimi to hear his views on the dynamic changes taking place on the global energy scene. Now in his 18th year as Saudi Arabia's Minister for Petroleum & Mineral Resources.."
Source: https://www.youtube.com/watch?v=nls9g3jtwUY
Saturday, May 25, 2013
Friday, May 17, 2013
BIS - Jens Weidmann: Money creation and responsibility
Jens Weidmann: Money creation and responsibility
Speech by Dr Jens Weidmann, President of the Deutsche Bundesbank, at the
18th colloquium of the Institute for Bank-Historical Research (IBF), Frankfurt, 18 September
2012.
"2. Money and money creation
I wish to begin with a question which appears trivial at first glance but which, as experience has shown, is particularly difficult. What is money exactly? A succinct response from an economist would be: Money is what money does.
As money is defined by its functions, various instruments are fundamentally capable of acting as money, as long as they can be used as a medium of exchange, medium of payment and store of value.
Shells were previously used as money in some countries, for example, as were furs, salt or pearls. Livestock could also serve as money – the Latin word for cattle is “pecus” from which the word “pecunia”, meaning money, is derived. Concrete objects have served as money for most of human history; we may therefore speak of commodity money. A great deal of trust was placed in particular in precious and rare metals – gold first and foremost – due to their assumed intrinsic value. In its function as a medium of exchange, medium of payment and store of value, gold is thus, in a sense, a timeless classic.” To gold they tend, on gold depend, all things!”, says Margaret in the First Part of Goethe’s Faust.
However, the money that we carry around in the form of banknotes and coins no longer has anything to do with commodity money. Money has no longer been linked to gold reserves since the US dollar was removed from the gold standard in 1971..."
Source: http://www.bis.org/review/r120924g.pdf
Speech by Dr Jens Weidmann, President of the Deutsche Bundesbank, at the
18th colloquium of the Institute for Bank-Historical Research (IBF), Frankfurt, 18 September
2012.
"2. Money and money creation
I wish to begin with a question which appears trivial at first glance but which, as experience has shown, is particularly difficult. What is money exactly? A succinct response from an economist would be: Money is what money does.
As money is defined by its functions, various instruments are fundamentally capable of acting as money, as long as they can be used as a medium of exchange, medium of payment and store of value.
Shells were previously used as money in some countries, for example, as were furs, salt or pearls. Livestock could also serve as money – the Latin word for cattle is “pecus” from which the word “pecunia”, meaning money, is derived. Concrete objects have served as money for most of human history; we may therefore speak of commodity money. A great deal of trust was placed in particular in precious and rare metals – gold first and foremost – due to their assumed intrinsic value. In its function as a medium of exchange, medium of payment and store of value, gold is thus, in a sense, a timeless classic.” To gold they tend, on gold depend, all things!”, says Margaret in the First Part of Goethe’s Faust.
However, the money that we carry around in the form of banknotes and coins no longer has anything to do with commodity money. Money has no longer been linked to gold reserves since the US dollar was removed from the gold standard in 1971..."
Source: http://www.bis.org/review/r120924g.pdf
ECB - The international role of the euro, 2011
"The international role of the euro"
Description: This is the 11th annual review of "The international role of the euro" published by the ECB. It presents the main findings of the continued monitoring and analysis conducted by the ECB and the Eurosystem looking at the development, determinants and implications of the use of the euro by non-euro area residents. This review also examines in greater depth issues that have a bearing on the euro’s international role, the global currency order and the international monetary system. This analysis is presented in the form of four special features.Contents:
1. Recent developments in the international use of the euro.
2. Foreigners’ appetite for euro area securities during the sovereign debt crisis.
3. The Chinese dominance hypothesis and the potential emergence of a tripolar global currency system.
4. When did the US dollar overtake the Pound Sterling as the leading international currency? The “old view” versus the “new view”.
5. Was unofficial dollarization/euroisation an amplifier of the global crisis of 2007-09 in emerging economies?
6. Statistical annex.
Source: www.ecb.europa.eu/pub/pdf/other/euro-international-role201207en.pdf?a4df690d0f5ac74bc99602afebbfac07
Wednesday, May 15, 2013
Monetary gold wikileaks - 1974PARIS26662_b
1974 - MARTINIQUE SUMMIT -- PART II
...15. ECONOMIC - GOLD: DESPITE ACCEPTANCE BY PRESIDENT POMPIDOU, IN SEPTEMBER 1973, OF SDR AS NUMERAIRE OF THE INTERNATIONAL MONETARY SYSTEM, FRANCE HAS PERSISTED IN ITS EFFORT TO RETAIN AN IMPORTANT ROLE FOR GOLD. THIS WAS THE ONLY INTERNATIONAL ECONOMIC ISSUE BESIDES ENERGY WHICH GISCARD RAISED AT HIS LAST PRESS CONFERENCE, AND IT IS POSSIBLE HE WILL RAISE IT AGAIN AT MARTINIQUE.
GISCARD'S POINTS ARE LIKELY TO BE: A) SINCE GOLD HAS BECOME MORE OF A COMMODITY (BANALISE), COUNTRIES SHOULD BE FREE TO BUY, SELL AND EVALUATE THEIR STOCKS OF GOLD AT A PRICE CLOSE TO THAT OF THE WORLD MARKET. THE ZEIST AGREEMENT, PROVIDING FOR USE OF GOLD AT MARKET- RELATED RATES AS SECURITY FOR INTRA-COMMUNITY LOANS (GERMANY TO ITALY THE FIRST EXAMPLE) WAS A FIRST STEP IN THIS DIRECTION, AND GISCARD HAS EXPRESSED HOPE COMMUNITY WOULD GO REST OF THE WAY BEFORE END OF YEAR. KNOWING US OPPOSITION (TO CENTRAL BANK PURCHASES AND STOCK REVALUATION) AND OUR INFLUENCE WITH EC PARTNERS, GISCARD MAY TRY TO GAIN GREATER US FLEXIBILITY ON THIS ISSUE, AT LEAST INSOFAR AS INTRA-EC TRANSACTIONS ARE CONCERNED. B) FRANCE IS OPPOSED TO ANY SALES OF GOLD STOCKS BY IMF. FRENCH VIEW IS THAT (1) THESE STOCKS BELONG TO MEMBERS, NOT FUND, AND MUST BE HELD UNTIL DISSOLUTION, (2) GOLD STOCKS SERVE AS IMPORTANT SECURITY FOR BORROWING FROM OIL PRODUCERS..."
...15. ECONOMIC - GOLD: DESPITE ACCEPTANCE BY PRESIDENT POMPIDOU, IN SEPTEMBER 1973, OF SDR AS NUMERAIRE OF THE INTERNATIONAL MONETARY SYSTEM, FRANCE HAS PERSISTED IN ITS EFFORT TO RETAIN AN IMPORTANT ROLE FOR GOLD. THIS WAS THE ONLY INTERNATIONAL ECONOMIC ISSUE BESIDES ENERGY WHICH GISCARD RAISED AT HIS LAST PRESS CONFERENCE, AND IT IS POSSIBLE HE WILL RAISE IT AGAIN AT MARTINIQUE.
GISCARD'S POINTS ARE LIKELY TO BE: A) SINCE GOLD HAS BECOME MORE OF A COMMODITY (BANALISE), COUNTRIES SHOULD BE FREE TO BUY, SELL AND EVALUATE THEIR STOCKS OF GOLD AT A PRICE CLOSE TO THAT OF THE WORLD MARKET. THE ZEIST AGREEMENT, PROVIDING FOR USE OF GOLD AT MARKET- RELATED RATES AS SECURITY FOR INTRA-COMMUNITY LOANS (GERMANY TO ITALY THE FIRST EXAMPLE) WAS A FIRST STEP IN THIS DIRECTION, AND GISCARD HAS EXPRESSED HOPE COMMUNITY WOULD GO REST OF THE WAY BEFORE END OF YEAR. KNOWING US OPPOSITION (TO CENTRAL BANK PURCHASES AND STOCK REVALUATION) AND OUR INFLUENCE WITH EC PARTNERS, GISCARD MAY TRY TO GAIN GREATER US FLEXIBILITY ON THIS ISSUE, AT LEAST INSOFAR AS INTRA-EC TRANSACTIONS ARE CONCERNED. B) FRANCE IS OPPOSED TO ANY SALES OF GOLD STOCKS BY IMF. FRENCH VIEW IS THAT (1) THESE STOCKS BELONG TO MEMBERS, NOT FUND, AND MUST BE HELD UNTIL DISSOLUTION, (2) GOLD STOCKS SERVE AS IMPORTANT SECURITY FOR BORROWING FROM OIL PRODUCERS..."
More to come: http://anotherfreegoldblog.blogspot.fi/2013/05/monetary-roots-goldtrail-origins-1973.html
AG - Alan Greenspan on 'Turbulence' and Exuberance (audio)
"...thoughts on paper, at length, in a memoir. It's titled The Age of Turbulence: Adventures in a New World..."
"I have always argued that the gold standard of the 19th century was a very effective stabilizer. It kept inflation essentially at zero, and I felt it was critical for the tremendous growth that occurred for the American economy in the latter part of the 19th century."
Source: http://www.npr.org/templates/story/story.php?storyId=14500893
h/t to Arthur Cutten (Jesse)@JessesCafe
"I have always argued that the gold standard of the 19th century was a very effective stabilizer. It kept inflation essentially at zero, and I felt it was critical for the tremendous growth that occurred for the American economy in the latter part of the 19th century."
Source: http://www.npr.org/templates/story/story.php?storyId=14500893
h/t to Arthur Cutten (Jesse)
Monday, May 13, 2013
Wednesday, May 8, 2013
Monetary Roots - GoldTrail - The Origins - 1973 - 1976 - The opening Game
A month ago, just as the Kissinger files were announced by wikileaks to be online, me and Jeff started to look into the issue. In a following month I have not only collected those relevant files about the development of the moenetary system in relation to oil and gold but also connected it to my previous reserach on USG docs available to the public. The 1973 - 1976 work I have done now is just a part of a bigger project THE TIME-LINE which is one of the first posts on this blog. The research on this one took me many hours and in total as I said about a month, the general systemic research on the development of the IMS in relation to the oil and gold as assets has passed the 3 years milestone.
No adverts, all free, available for all.
Snapshot:
So if you appreciate this and want me to continue on this level or better (the potential is there, the time at present setting is not) you can also participate supporting me helping by allocating my time for this my project.
There are 2 approaches now:
A/ A paid web page with some part available for public
B/ A full out for all to see research results with donation option.
Based on results I will decide. Soon.
Thoughts? Advices, suggestions? Comments? Wishes?
you can also write me: mortymer @ email . cz
Thanks,
Kind regards
Mrt
No adverts, all free, available for all.
Snapshot:
So if you appreciate this and want me to continue on this level or better (the potential is there, the time at present setting is not) you can also participate supporting me helping by allocating my time for this my project.
There are 2 approaches now:
A/ A paid web page with some part available for public
B/ A full out for all to see research results with donation option.
Based on results I will decide. Soon.
Thoughts? Advices, suggestions? Comments? Wishes?
you can also write me: mortymer @ email . cz
Thanks,
Kind regards
Mrt
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