The growing challenges for monetary policy in the current international monetary and fiancial system
“Moreover, history teaches that the transition to a new global reserve currency may not proceed smoothly. Consider the rare example of the shift from sterling to the dollar in the early 20th Century – a shift prompted by changes in trade and reinforced by developments in finance. The disruption wrought by the First World War allowed the US to expand its presence in markets previously dominated by European producers. Trade that was priced in sterling switched to being priced in dollars; and demand for dollar-denominated assets followed. In addition, the US became a net creditor, lending to other countries in dollar-denominated bonds.”
USAGOLD note: This is the Mark Carney speech at the Jackson Hole conference referenced in News & Views‘ lead article this month for those who might have an interest in the full rendition.
Catch up with the September edition