The Practicarian: Sic

Happy New Year to all our followers and would be followers:

If you have read my latest book “Sell the Pig” Tales of an Accidental Gold Miner, you might  already know that I am a Gold Buff at heart, and do not have much faith in Specie or printed currency. I am sure readers might also have a glimmering, much to the chagrin of my left leaning followers, that I tend to be libertarian in my thinking. Not to the extent of a Rand Paul, (named after Ayn Rand Russian American author of Atlas Shrugged)  but more along the lines of an older and, hopefully wiser, ‘Practicarian’ (Sic)

A ‘Practicarian’ in my terminology,  is someone who has a set of beliefs  that are unattainable, and so concludes, it is necessary to settle for a half of the proverbial loaf and get on with it. This is why I do not make projections, economic or political, as to the future but settle for possible solutions to the apparently  intractable.

An example: I believe the Gold Standard, as practiced in the British Empire during the period 1815 to 1915 was the best system of monetary control ever invented. Much as I might long for the simplicity of  the rigid link of printed specie to physical gold bullion, or to basket of commodities ,  I know it is just not practical in the age of the trillion-dollar World Economy. But as an economist I also know of the terrible danger we are in because of the indiscriminate  printing of trillions of US dollars that are linked to nothing of real value, other than an airy fairy notion of G.D.P. (Gross Domestic Product)

So what might be done about it? One solution might be to recognize the obvious, that China is now a major player on the world economic stage, and, as such,  should be allowed to liberate it’s here-to-for domestic currency, the Yuan.  This has not happened to date because of distrust of  the closed economy, dictated by the hegemony of the Communist Party, and the stupid and outdated notion in the West, that  all the World must live in a democracy.

In return for greater transparency why not make the Yuan the Sixth currency ( Gold, US Dollar, Euro Pound and Yen)  in determining the value of Special Drawing Rights,  the current international store of value used by the I.M.F. (International Monetary Fund) ?

I have a feeling that we all might be very surprised to learn that the Yuan, backed by trillions of US dollars and a big stash of gold, would be a stabilizing force in avoiding cataclysmic volatility in World trade. It might also act to reign in the horrific risks involved in the current trade in unregulated currency derivatives.

Will it happen?

Stay Tuned.

 

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