Список проголосовавших за комментарий "Foating rates system has been an idiotic concept from the very beginning.<br/> <br/> «Floating or sinking?<br/> <br/> In the 1950's Friedman concocted his pseudo-theory purporting to show how the floating system <br/> of foreign exchange rates would provide an automatic adjustment mechanism to balance the <br/> external accounts of trading nations. By implication, a gold standard was not a prerequisite of <br/> bringing about equilibrium in foreign trade. To say that Friedman is not a friend of the gold <br/> standard is an understatement. He maintains that it is a “price-fixing scheme” and as such a gold <br/> standard is anathema to the free market.<br/> A monetary scientist should know better. Friedman puts the cart before the horse. A gold <br/> standard does not fix the price of gold any more than the tail wags the dog. What happens is that, <br/> once gold is in circulation, it is the price of bonds and notes that governments and banks are all <br/> too anxious to stabilize in terms of the gold coin of the realm. If they can, gold gives their <br/> obligations unmatched respectability. If they can’t, then well-informed people will make their own <br/> conclusion about the quality of their paper.<br/> According to Friedman’s theory, under freely floating foreign exchanges a country in deficit would <br/> experience a loss in the exchange value of its national currency vis-à-vis a country in surplus <br/> which would, in turn, experience a gain. The former would be a more attractive market to buy <br/> from and less attractive to sell in. It could now export more and import less. The latter would be a <br/> less attractive market to buy from and more attractive to sell in. It would now export less and <br/> import more. The resulting changes in the export-import cocktail would restore trade balance. <br/> This is supposed to work as an automatic adjustment mechanism balancing foreign trade through <br/> the system of variable exchange rates.<br/> This is an inept rationalization of the misfortune to have abandoned sound money. To say, as <br/> Friedman does, that debasement of the currency is a legitimate means of eliminating trade <br/> deficits, when carried ad absurdum, is saying that the worst currency is the best and the best the <br/> worst. Friedman’s theory was actually put to into practice by Nixon. The result judged from thirtyfive years’ of perspective was an unmitigated disaster. The monetary, financial, and economic <br/> stature of the United States is in shambles, thanks to Friedman’s floating dollar. As a matter of <br/> fact, the euphemism ‘floating’ should be interpreted as ‘sinking’. It was the sinking dollar that has <br/> turned the country from the greatest creditor into the greatest debtor the world ever knew. The <br/> dollar used to be a monetary giant, the envy of the rest of the world. Now, it is a dwarf treated <br/> with contempt abroad. And the worst is still to come. We are facing a credit collapse.<br/> Floating did not solve problems that the United States was facing in 1968. It made them worse. <br/> The devaluation and the deliberate debasement of the dollar did not make American exporters <br/> stronger. It made them weaker. The weak dollar was a huge bonanza for the foreign competitors <br/> of America. They were able to buy more imported goods per unit of exports. By contrast, <br/> Americans were able to buy less. The deficit was financed by an unprecedented debt-pyramid <br/> spinning out of control. The terms of trade for America has deteriorated to such an extent that it <br/> necessitated the wholesale dismantling of once prosperous American industries. It is not just the <br/> foreign purchasing power of the dollar that is on skid row. So is its domestic purchasing power, <br/> official doctoring of statistics notwithstanding. The widely fluctuating value of U.S. Treasury bonds <br/> is a butt of some very unkind jokes by foreigners. True, the American people still appear to be <br/> well off. But this prosperity is resting on “thin ice” in the words of former Federal Reserve Board <br/> Chairman Paul A. Volcker.»"