House of Paine

uncle's dollar bancor impersonation

since 1971 
uncle's dollar has played the part 
 of keynes's  bancor
                
errr
well
as close to bancor
  as  imperial reality will get 


=======================================


keynes wanted an international reserve currency
to be the kernal of his 
           international clearing union 

an institution to be 

"set up on the banking principle"


         which  within a closed system
       like the globe 

would 
in practice 
  prevent the irregularity 
of supply  
and
 the  consequent
 necessity for  occasional 
 expansion crippling  global deflations
inherent in the gold system 

 yes with a ex nihilo world reseve currency 
the system 
 could   add  to the sum 
       of its own reserves
instantaneously
 for free
and 
in whatever amounts  deemed optimal ....


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well needless to say
that wasn't  ever 
 remotely 
       part of uncle's 
            grand game plan 

uncle had a  different 
global reserve  currency
in mind all along

the  imperial dollar ......

why?

why else

cause they could pull it off 




so when  in 1971 Bretton Woods fell apart
 and the dollar/gold link was snapped  

 -- because BW  was predicated
      on a creditor amerika
running trade surpluses 
and  amerika  wasn't up to
 trade surpluses anymore
or at least one  
   large enough
to fund its capital exports ------------

 uncle rigged up 
   and /or fell into
  
 a new globalized version 
       of britain's old  
       pre WWII sterling block 

where a hugely deficit prone 
imperial metropole
could run up  sizeable year in and year out
 payments deficits 
  with  the rest of the system  
    and keep on ticking indefinitely 

in fact 
  unclea  nd his collaborators
willingly or not 
   have  created
   a present 
world  payments and credit system
where the  metropole's (uncle sams')
  external payments  deficits 
are the key motor
  of sustained global expansion !!!!!!


imagine

 gettin paid  handsomely
      to be the system's saviour 

nice gig if you can get it eh?????

only no one loves  misunderstood uncle 

his role as  keynesian system saviour 
    is blind eyed 

of course 
 theres a  god reasonfor this ....

--------------------------------



 keynes had two ideas uncle's  set up leaves out


1)  a collective process of decision making

and

2) an optimal global growth 
          determined 
          distribution 
            of the systems annual  "free rides"

----------- ie the yearly inflation free 
           quota of 
         zero interest  
           no need to pay back
   credit availibility
                 aka  
the  real output
equivalent
   of
 the increment in world reserve holdings  ----------

under bancor 
this quota
 would equal 
the rate of real growth 
in globally traded commodities 

around 5 hundred billion dollars 

-------------------------------------------

nb 
the middle 30's  brit system 
known as the sterling block 
 had a very nice feature

in a world full of off gold 
 flexible exchange rate currencies  
pegging to the weakest
 of the world's
 major  currencies  
  is favored by exporters 

hence  chiang's china's 
     sterling block  membership
despite 
the far greater 
 strength and credit availiblity
 of the us dollar  

ain't it all
just like today's dollar vs rivals like the yen or euro

hugeness and
 relative weakness are both  beautiful 
     as a trading groups 
                 common currency ....