From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Wed Nov 24 2004 - 04:02:48 EST
At 11:20 AM -0200 11/23/04, cmgermer@UFPR.BR wrote: >The fact that gold still performs fundamental functions of >money is clear before our eyes. Why should we deny it? ... (T)hus, if one >looks at the *monetary sphere* of today with Marxian eyes, one sees gold >very distinctly in fundamental monetary functions. OK, Claus, gold was traditionally used by central banks as a 'war chest' to provide security in the vent of a crisis. However, it was of little use during the collapse of the Asian Tiger economies. Being less liquid than forex reserves, it can't be readily used to defend a national currency from speculative attacks. It was growingly considered more of a "commodity" than an "asset". Of course this may or is changing with a flight out of all major currencies to gold, and convertibility may be forced on central banks. But this is not yet clear before our eyes. So I don't understand what proves to you (and Paul B) that gold is still performing in Nov 2004 the fundamental functions of money. Hasn't the world been on a dollar rather than gold standard? And the US the beneficiary of exorbitant privileges? If we say that gold is still world money, then we are discouraged from understanding what has allowed to dollar to usurp that role to this day. And whether that usurpation is unravelling before our eyes. Rakesh
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