Today we will look at an editorial by Judy Shelton that was published in The Sun of New York.
According to Judy Shelton is more important that we look at the nature of money itself than worrying about what kind of international system we should have.
God and Money: 'A Perfect and Just Measure Shalt Thou Have': https://www.nysun.com/national/god-an...
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See Full Video Transcript Below
So with the 50th anniversary of the collapse of the Bretton Woods agreement coming up in about 15 days, I'm going to be covering more and more the event and the repercussions that had or it has had and is still having to this day. Of course, I'm going to be doing a live stream on August 15, which happens to be a Sunday that they did I do the live stream, it was a Sunday back in 1971, as well. So it's a nice coincidence. I'm going to be referencing today, an editorial piece by Judy Shelton, in the Sun newspaper, not the Sun newspaper of London, but the Sun newspaper of New York, I don't think the Sun newspaper of London would have Judy Shelton write something like this. And we're going to look at what the collapse of Bretton Woods has meant, and what money really is, and that's what Judy Shelton talks about. Yes, Billy and I have already been for a walk this morning. Usually, we go for a walk after we do the video. But as it's Saturday, we went for a walk before. And before I get into the article, I like to give you a little bit of history on my part, and President Nixon, he might you might think, what's Mario have to do with President Nixon? Well, as many of you know, I was born and I grew up in Brazil. My father was in the shipping business, he was a ship broker. And by the time I was five or six, my father was already running his own business. And he used to travel a lot abroad, specially to the US. And as we got older, he started taking the whole family on the on business trips, trips, mixing business, and pleasure. And I remember really well, and it was around 1970, it could have even been 1971. But I think it was 1970. And I was just about five or six. And we were staying at a hotel in New York City. And my sisters, I don't know where they were, they must have stayed in their room. But my mom and dad took me down to the lobby. I don't know what we're gonna do at the lobby, maybe I said I wanted to buy a toy or something in the store they had or who knows. But as we get to the lobby, and we walk out of the elevators or the lifts, there's this man in a suit walking towards us walking past says, and I look up and I say to my mom and dad, that's President Nixon. And they go, you know, you don't have to publicize it. And so that's my, my meeting with Nixon. I think he nodded to me because I looked up. And we just walked past him. So yeah, 50 years later, I'm talking about something that he was heavily involved in. Is he totally to blame for what happened on August 15 1971, partly, he was the guy who pulled the trigger made the decision. But the problems that were inherent at the time in August 1971, had started way before he was president. And that's the other thing that I want to say before I go into a miss Shelton's article or editorial is that this is above politics. Because President Nixon was a Republican, he took the world off gold. President Roosevelt was a Democrat. He took the United States domestically off gold. The Democrats and Republicans have been in power interchangeably for the last 50 years. And we're still under a fiat currency system. So yeah, this is beyond politics. And I know, Judy Shelton has advised republican presidents. And last one, of course, is President Trump. But this is not what it's all about. This is about money. And with that, let's have a look at her great article. I thought it's not very long and we'll go through it. So let's get to it. It's from the son of New York. As I said, I have to thank one of the viewers for sending me the link. I'm going to put the link in the description if you want to have access to this article as well. And it's entitled God and Money - A Perfect and Just Measure Shalt Thou Have by Judy Shelton. It was published on July 29 2021. So let's get to it. The 50th anniversary of the collapse on August 15 1971, of the Bretton Woods monetary system is a momentous moment in the history of money. It should provide an occasion for thoughtful discussion focused on the road to reform our priceless Constitutional foundation and the restoration of honest money. Yes, we haven't had really money for over 50 years really. Well, even at that time, I would say for domestically, Americans didn't have money either because they couldn't convert their dollar notes like treasuries or governments could. So let's continue anyway. Let us avoid an academic food fight among economists over prior international monetary systems. We should not be arguing about the classical Gold Standard versus the Bretton Woods pegged exchange rate system, as these are just variations on the more significant theme of gold convertibility and the role of government in regulating money. We can't even usefully revert to debating the old fixed versus flexible arguments that were part of Milton Friedman's justification for freely floating rates in the 1960s. The theoretical models for both positions have been mugged by reality. Instead, we should be talking about money itself. What is its basic purpose, its relationship with productive economic growth and whether today's dysfunctional international monetary regime deserves to be designated any kind of system at all. As former chief of the International Monetary Fund, Jacques de Larosiere, noted at a conference in February 2014 at Vienna, today, central bank dominated monetary arrangements foster and I quote, a volatility, persistent imbalances, disorderly capital movements, currency, misalignments. These he warned, were all major factors in the explosion of credit and leverage that precipitated the 2008 global financial crisis. Such an unanchored approach, he said, does not amount to a non-system, but something considerably worse an anti-system. And if you've watched The Big Short at the end, they say that after the collapse, after financial crisis, they reformed the whole system, loads of bankers went to jail and everything was changed while you were wrong if you thought that happened, and they make that joke as well. It's not a joke. It's serious. Nothing has changed since the 08' crisis. It's gotten even worse, I would say. It is time to think creatively about money. We need to remind ourselves what it means as a measure how it facilitates voluntary commerce and opportunity, how it can lead to greater shared prosperity while remaining compatible with liberty, individualism, and free enterprise. We are at a moment when everything is on the table. For the wisdom of central bank mechanisms for conducting monetary policy is being called into question. Just as private, alternative monies are making even more credible bids for legitimacy. Looking back and looking ahead, we can see that the most relevant and stimulating views emphasize the importance of productive economic activity and an open global marketplace. Money's crucial role is to provide clear price signals to optimize the rewards of entrepreneurial endeavor and increased human knowledge. Yes, money is an evolution from barter and direct exchange. Yes, we could go back to barter and direct exchange. But we wouldn't have made the advances we have, technologically and economically and socially, if we hadn't graduated to indirect exchange. And money as the Austrian School and in especially, Murray Rothbard says, is the most marketable commodity. Adam Smith wrote his treatise The Wealth of Nations during an age when nations forged a global monetary system by defining their currencies in terms of precise weights of gold and silver, a level monetary playing field arising from a system inherently discipline by forces outside the control of government, wherein the economic decisions of private individuals are not held hostage to the ambitions of politicians serve profoundly liberal goals such as: rule of law, private property, and the equal protection of human rights. And I would argue, those goals helped make what the West is today, the advanced industrial society that we have, not only economically and socially, but technologically, it was through freedom, through rule of law, through private property, and equal protection of human rights, not just rules for us and different rules for the elite. That's how it evolved. And private property of course, is very important. Soviet systems don't have private property, do they? And if they do, it's very diluted, as the state takes over most of the property. Modern day visionaries likewise focus on the integrity of market signals conveyed through money. When Elon Musk says I think about money as an information system. He goes to the heart of money's unit of account function and under underscores the importance of price signal clarity, when he tweets, that goods and services are the real economy. Any form of money is simply the accounting thereof. He illuminates the same reasoning that caused our constitutional framers to include the power to coin money and regulate the value of American money and of foreign coin, in the same sentence of our constitution that grants Congress the power to fix our standard of weights and measures. An interesting point about foreign coins is that during colonial the colonial period, a lot of foreign coins were used. It was mostly the Spanish coins because the British didn't allow the export of their coins to the colonies and other coins from other European countries. And did you know that the Spanish dollar, the Spanish mill dollar was still used as legal tender as money up until the 1850s, which is really interesting. Money is meant to be a reliable measure a meaningful unit of account in a dependable store of value. When those qualities are undermined, specially by government for purposes of redirecting economic outcomes. At the risk of global financial instability. The dynamism and productive potential of free market forces is diminished, political arguments in favor of maintaining government control over the issuance of money tend to invoke short term objectives couched in words such as stimulus and the need for central bank support for an economy. Such calls are met with somber warnings about the long term unsustainability from the monetary authorities who nevertheless indulge them. The other thing I would say is that it's not just government here, I would add that is in charge right now, because the central banks and the Federal Reserve, of course, is a hybrid, the regional Fed banks like the New York Fed, they're privately owned. It's a marriage of bankers and government really. But that's a different subject. So here Judy Shelton quotes the Bible, but thou shalt have a perfect and just wait a perfect and just measure, shalt thou have goes to passage from the book of Deuteronomy, that thy days, maybe lengthen in the land which the Lord thy God giveth thee. And she says the biblical injunction against dishonest measures can be interpreted as alluding to sustainability, not only in economic terms, but also in the moral realm. I would also say that you don't have to be a Christian or religious to believe that this makes sense, because you can't have peaceful voluntary interaction with other people if you try to cheat them, as noted by Robert Bartley, editor of the editorial page of The Wall Street Journal for more than 30 years. Economist Robert Mundell was correct in his assessment, that the only closed economy is the world economy. It's time to start building an ethical international monetary system. So this is what the Sun says here. Judy Shelton, an economist is a senior fellow at the independent Institute and author of Money Meltdown. So there you have it. I thought that was a good article, we'll have to see if the Sun comes out with some more interesting articles in the next 15 days. The live stream will probably longer than usual on August 15. And we're going to look at a lot of different things, a lot of the repercussions and what the closing of the gold window did to the world, not only economically but socially, politically, geopolitically, it was a real game changer, August 15 1971. So with that, I bid you all farewell, and a great weekend, and I'll talk to you later. Take care. Bye
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