" The functioning of the international monetary system was thus reduced to a childish game in which, after each round, the winners return their marbles to the losers.".
"If I had an agreement with my tailor that whatever money I pay him he returns to me the very same day as a loan, I would have no objection at all to ordering more suits from him."
- French economist Jacques Rueff explained the dollar recycling program back in 1961, before it even existed, as he saw what would happen once we went off the gold standard.
"The West was risking a credit collapse and the gold-exchange standard was a great danger for western civilization. If I did so, it is because I am convinced — and I am very emphatic on this point — that the gold-exchange standard attains to such a degree of absurdity that no human brain having the power to reason can defend it. What is the essence of the regime, and what is its difference from the gold standard? It is that when a country with a key currency has a deficit in its balance of payments—that is to say, the United States, for example—it pays the creditor country dollars, which end up with its central bank. But the dollars are of no use in Bonn, or in Tokyo, or in Paris. The very same day, they are re-lent to the New York money market, so that they return to the place of origin. Thus the debtor country does not lose what the creditor country has gained. So the key-currency country never feels the effect of a deficit in its balance of payments. And the main consequence is that there is no reason whatever for the deficit to disappear, because it does not appear."
What Rueff predicted should be called the danger for "Eastern" civilization, if one think what the US Government has been doing for decades. Two articles, one in 1965 and the other in 2004, further explained the danger of using the US dollar as a unit of reserve.
http://goldismoney.info/forums/archive/index.php/t-7281.html
http://www.safehaven.com/article-1406.htm
"If I had an agreement with my tailor that whatever money I pay him he returns to me the very same day as a loan, I would have no objection at all to ordering more suits from him."
- French economist Jacques Rueff explained the dollar recycling program back in 1961, before it even existed, as he saw what would happen once we went off the gold standard.
"The West was risking a credit collapse and the gold-exchange standard was a great danger for western civilization. If I did so, it is because I am convinced — and I am very emphatic on this point — that the gold-exchange standard attains to such a degree of absurdity that no human brain having the power to reason can defend it. What is the essence of the regime, and what is its difference from the gold standard? It is that when a country with a key currency has a deficit in its balance of payments—that is to say, the United States, for example—it pays the creditor country dollars, which end up with its central bank. But the dollars are of no use in Bonn, or in Tokyo, or in Paris. The very same day, they are re-lent to the New York money market, so that they return to the place of origin. Thus the debtor country does not lose what the creditor country has gained. So the key-currency country never feels the effect of a deficit in its balance of payments. And the main consequence is that there is no reason whatever for the deficit to disappear, because it does not appear."
What Rueff predicted should be called the danger for "Eastern" civilization, if one think what the US Government has been doing for decades. Two articles, one in 1965 and the other in 2004, further explained the danger of using the US dollar as a unit of reserve.
http://goldismoney.info/forums/archive/index.php/t-7281.html
http://www.safehaven.com/article-1406.htm
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