Trade Deficits and Fiat Currencies
Wow, you know I must be super busy if I forgot to blog my Mises Daily on Monday. It was “Trade Deficits and Fiat Currencies,” showing the connection between the two. I both praise and critique the author of The Creature From Jekyll Island.
This morning I gave my talk at the Denver Petroleum Club. One of my opening slides talked about the IER D.C. office and how I didn’t have a picture of it because we had recently moved, so instead I said this shot represented our efforts. I didn’t get as big a laugh as I was hoping–perhaps because it was an older crowd–but other than that things went well.
Then I hopped on a plane to Atlanta, retrieved my car from the Economy lot, and drove down to Auburn. I’m about to crash and then tomorrow morning I give the Hayek lecture at the Austrian Scholar’s Conference.
I think I actually get to sleep Friday night. I can’t wait.
Bob, was reading this awful article on new deal denialism
http://www.thebaffler.com/viewArticle/120/0/1/
and near the end the author gives your PIG to the great depression a bit of a kicking. Hopefully honor compels you to respond since this is just the type of confidently ignorant article I like to see get a good going over.
Teqzilla,
I tried to read that article but it started hurting too much.
Sure, the poor saps drafted into the Army or the female workers who thronged into war production factories might have thought things were turning around.
It's interesting that the author writes well but produces arguments one would expect from an idiot child.
He's basically responding to the broken window parable by saying "Ha! Tell that to the glazier, Austrian losers!"
Seems like the article consists of,
1. Quote Bob Murphy at length
2. Insert sarcastic remark
3. Say something like, "but we all KNOW that's crazy amirite"?
At least, that's what I got from it….
Standard Keynesian analysis, which I know you don't accept, results in trade deficits any time these two conditions are both met:
1. Savings = Investment
2. The government is running a deficit.
Sir,
I found your article about trade deficits and fiat currencies very interesting.
Having studied Austrian Economy for a while, I had the impression that Austrians, even if right about the causes of the current global crisis, lack a sort of more detailed focus on what is going on. Of course the Mises Institute blog have interesting and updated articles like your ones but my impression is that there’s something more to tell on theory ground than the usual fractional reserve/gold fiat money explanation.
For example I think there’s a lot to tell about the international transmission mechanism of crisis (Japanese Central Bank brings down the interest rate because of the post bubble recession, hot money flows in Thailand in new fresh territory and there another crisis). About the consequences of world production distortions (how can we defend genuine international free trade if westerner workers see the effects of fiat currencies distortions while loosing their job?) and so on.
I even think there’s a lot to tell in historical terms too from Bretton Woods 1973 failure to nowadays.
Of course this is not a critique because Austrians still have the right instruments to explain our current economical problems. It’s just a suggestion for further studies, a little bit more updated perhaps and better equipped to capture the attention of the public.
Thank’s for your attention.