[OPE] Ken Rogoff wins the funnies prize

Patrick

I make no comment about Prof Rogoff's character, he cannot help being who he
is, I was just referring to what he said. Respect the person, comment on the
behaviours, that's my line.

Point is this: apart from the fact that changes in currency regimes can, if
the political will exists, occur extremely rapidly (and, there are many
historical precedents for this), Prof Rogoff simply has no real scientific
basis for such a temporal extrapolation. That is why I think it's comical,
what he said. It reminds me of the Mandelites in my youth, waffling about
"long waves".

Perhaps we should discuss "dollar hegemony" some more.

(1) Given that there is about $6-7 trillion in global USD reserves
(depending on how you estimate and value the total), then if you want to get
rid of much of these dollars (for example because they are inescapably
depreciating in value), and trade in another currency, who is actually going
to BUY those dollar claims (the problem of convertibility)?

(2) The second problem is, once a big sell-off of USD is set in motion, can
you prevent this from rapidly lowering the value of the USD, providing a
disincentive to sell more, and creating a political backlash? (A sudden,
massive sell-off of the USD would be equal to a "run on the banks").

(3) The third problem is: if you succeed in selling off a large chunk of
USD, can you cope with the global political fall-out of all this?

Unfortunately most "Marxists" don't understand this problematic at all.

Jurriaan

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Received on Fri Oct 9 09:51:33 2009