In this Edition
Is reserve currency status
an economic blessing or a curse? The answer might seem obvious, as
reserve currencies have been shown to confer lower borrowing costs on
their issuers. But what of the borrower who, enticed by low interest
rates, borrows more than they can pay back? Naturally the result will be
a default. However, for the issuer of a reserve currency that is
unbacked by a marketable commodity, such as gold, in the event that they
borrow too much, they can just print more currency. While this avoids
default indefinitely, it also hollows out the economy, erodes the
capital stock, reduces the potential growth rate and, eventually, leads
to a dramatic devaluation of the currency and loss of reserve status.
History has not been kind to countries that have followed this path. In
my view, the grave investment risks associated with the US dollar’s
inevitable and potentially imminent loss of reserve status are not
priced into financial markets.
Reserve Currencies, Trade Imbalances and the 'Triffin Dilemma'
Having
written a book about international monetary regime-change past, present
and future, I weigh in again in this Amphora Report on what is
gradually becoming a more mainstream debate about whether or not the US
dollar is at risk of losing reserve currency status, what currencies, if
any, might replace it, and, should it happen, what general economic and
financial market implications this would likely have.[1]
As it
happens, I have a rather strong opinion on all of these matters. But
first, let’s consider what a reserve currency is and what it is not.
Second, let’s distinguish carefully between reserve currencies that are
backed by a marketable commodity, such as gold or silver, and those that
are not. Third, let’s take a look at shifting global economic power and
monetary arrangements. Then we can move into what I think is going to
happen in future, what this implies for financial and commodities
markets, and what investors can and should do to prepare.
What,
exactly, is a reserve currency? It is an international money that is
used to pay for imports from abroad and is then subsequently held in
‘reserve’ by the exporting country, as it does not have legal tender
status outside of its country of issuance. In the simple case of two
countries trading with one another, with one being a net importer and
one a net exporter, over time these currency ‘reserves’ will accumulate
in the net-exporting country. In practice, as reserves accumulate, they
are invested in some way, for example, in bonds issued by the importing
country. In this way the currency reserves earn some interest, rather
than sit as paper scrip in a vault.
Beyond a certain point,
however, accumulated reserves will be perceived as ‘excessive’ by some
in the exporting country, in that they would prefer to purchase
something with this accumulated savings instead. In this case they have a
choice: Either they can purchase more imports from the net-importing
country, thereby narrowing the trade imbalance, or they can exchange
their reserves with another entity at some foreign-exchange rate. For
this reason, other factors equal, as reserves accumulate, the reserve
currency will depreciate in value.
As trade imbalances and
reserve balances grow, so does the natural downward pressure on the
value of the reserve currency as described above. This leads to what
Belgian economist Robert Triffin called a ‘dilemma’: For unbalanced
trade to continue to expand, the supply of reserves must increase. Yet
this implies a chronically weak reserve currency, which leads to price
inflation. Indeed, under the Bretton Woods system of fixed exchange
rates, the supply of dollar reserves grew and grew, price inflation
increased and, eventually, as one European central bank after another
sought to exchange its ‘excess’ dollar balances for gold, this led to a
run on the official US gold stock and the demise of that particular
monetary regime.
While hailed as an important insight at the
time, Triffin was pointing out something rather intuitive: Printing a
reserve currency to pay for net imports is akin to owning an
international ‘printing press’, the use (or abuse) of which causes net
global monetary inflation and, by association, some degree of eventual,
realized price inflation.
'Cantillon Effects' and the Non-Neutrality of International Reserves
Now let’s combine Triffin’s insight with that of Richard Cantillon, a pre-classical 18th
century economist, that money is not ‘neutral’: New money enters the
economy by being spent. But the first to spend it does so BEFORE it
begins to lose purchasing power as it expands the existing money supply.
The money then gradually permeates the entire economy, driving up the
overall price level. Those last in line for the new money, primarily
everyday savers and consumers, eventually find that, by being last in
line for the new money, their accumulated savings are being de facto ‘diluted’ and the purchasing power of their wages diminished.
Extropolated
to the global level, this non-neutrality of money implies that an
issuer of a reserve currency is the primary beneficiary of the
‘Cantillon effect’. First in line for the new international money are
the owners of capital in the reserve issuing countries, who use the new
money to accumulate more global assets, and at the end you have workers
the world over who receive the new money last, after it has placed
general upward pressure on prices. Greater global wealth disparity is
the inevitable result.
Another way to think about the benefits of
issuing the reserve currency is that it generates global seignorage
income. Federal Reserve notes pay no interest. However, they can be used
to purchase assets that DO bear interest. No wonder the Fed always
turns a profit: It issues dollars at zero interest and collects
seignorage income on the assets it accumulates in return.[2] But in a
globalised economy, with the US a large net importer and issuer of the
dominant reserve currency, this seignorage income is partially if
indirectly sourced from abroad, via the external accounts.[3]
This
becomes particularly notable in the event that domestic credit growth
is weak relative to abroad. The Fed may print and print to stimulate
domestic credit growth but if that printing does not get traction at
home, it will instead stimulate credit growth abroad and, eventually,
contribute to higher asset and consumer price inflation around the
world.
Over time, this will impact the relative competitiveness
of other economies, where nominal wage growth is likely to accelerate,
eventually making US labor relatively more competitive. That may sound
like good news, but all that is really happening here is that US wages
end up converging on those elsewhere, something that should happen in
any case, over time, between trading partners as their economies become
more highly integrated. But to the extent that this wage convergence
process is driven by reserve currency inflation, rather than natural,
non-inflationary economic integration, the Cantillon effects discussed
earlier result in wages converging downward rather than upward, implying a global wealth transfer from ‘owners’ of labor—workers—to owners of capital.
So-called anti-globalists disparaging of free trade are thus not necessarily barking mad—well, perhaps some are—but they are
barking up the wrong tree. The problem is not free trade; the problem
is trade distorted by monetary inflation. If you want workers around the
world to get fairer compensation for their labor, shut down the reserve
currency printing press. And if you also want them to have access to
the largest possible range of consumer goods at the lowest possible
cost, remove trade restrictions, don’t raise them.
Reserve Currencies: Gold-Backed, and Unbacked
As
it happens, prior to the First World War, the bulk of the world was on
the classical gold standard. Although the British pound sterling was the
dominant reserve currency, it was not possible to print an endless
amount of pounds to pay for endless imports, as external reserve
currency balances were regularly settled in gold. The British pound thus
held its value over time, as did other currencies on the gold standard,
and there was not a ‘Triffin Dilemma’ resulting in growing,
unsustainable trade imbalances. Moreover, absent monetary inflation,
there were no insidious Cantillon effects taking place. Industrial wages
were generally stable through these decades, which were characterised
by mild consumer price deflation. This implied an increase in workers’
purchasing power and standards of living. So while there are certain
parallels between sterling’s previous, gold-backed role as a reserve
currency and that of the unbacked, fiat dollar today, there are even
greater differences.
(For those curious how such a stable
international economic order could break down so completely in such a
short period of time, please turn to the extensive literature on the
causes and consequences of WWI, arguably the greatest tragedy ever to
befall western civilization.)
Returning to the present, countries
that have been exporting to the US and accumulating dollars in return
are increasingly getting the joke, but they aren’t laughing. Hardly a
week goes by without some senior official in an up-and-coming country
rich in natural resources or with competitive labor costs criticising US
monetary policy while suggesting that gold should play a greater role
in international monetary affairs. The BRICS (Brazil, Russia, India,
China, now joined by South Africa), individually and together, have
already made numerous official, public statements to this effect.[4] One
can only imagine what is being discussed in private, behind closed
doors.
Just last week, quite similar monetary concerns were
expressed openly by Turkey, historically a ‘swing-state’ in its global
orientation, yet currently a member of NATO and thus at least a nominal
US ally. Prime Minister Erdogan, who is far more popular with the
electorate in his country than most western leaders are in theirs, had
this to say recently, in criticism of the International Monetary Fund
(IMF):
The IMF extends aid on a who, where, how and on what conditions basis. For example, if the IMF is under the influence of any single currency then what, are they going rule the world based on the exchange rates of that particular currency?
Why do we not switch then to a monetary unit such as gold, which is at the very least an international constant and indicator which has maintained its honor throughout history. This is something to think about.[5]
Historians
will note that once upon a time, France was a full member of NATO, but
following President De Gaulle’s decision to challenge the dollar-centric
Bretton Woods system in the mid-1960s, there erupted a series of dollar
crises that culminated in the collapse of the Bretton Woods regime in
the early 1970s. Is history about to repeat?
(Incidentally,
history has already nearly repeated once before, in 1979-80. While the
mainstream historical economic narrative about this period is that the
Fed resorted to punatively high interest rates to fight the high rate of
domestic price inflation, one look at the behaviour of the dollar in
1979-80 tells a different story, that the air of crisis at the time had
an important international dimension. FOMC meeting transcripts also
reinforce this arguably ‘revisionist’ view that the dollar’s reserve
status was at risk.)
Clearly there is growing dissatisfaction
with the current set of global monetary arrangements, which allow the US
to print the global reserve currency to pay for imports, an ‘exorbitant
privilege’ as it was termed by another French president, Valery Giscard
d’Estaing. Under the Bretton Woods system, France or any participating
country for that matter could choose to exchange its accumulated dollars
for gold. As predicted well in advance by French economist Jacques
Rueff, a contemporary of Robert Triffin, the eventual exercise of this
choice to exchange dollars for gold by not only France but a handful of
other countries led to a run on the US gold stock in 1971 and an end to
the dollar’s gold convertibility.
The Reserve Currency Curse In Disguise
Let’s
now turn to the question posed at the beginning of this report. Is
reserve currency status a blessing, or a curse? The answer may seem
obvious. After all, isn’t it nice to hold the power of the global
printing press? To enjoy relatively low borrowing costs? To possess the
‘exorbitant privilege’, as it were? On the surface yes, but what lies
beneath?
As Lord Acton is purported to have said, power tends to
corrupt. By corollary, absolute power corrupts absolutely. And to the
extent that a power that is held nationally is exercised
internationally, then the corruption thereof has a deleterious
international economic impact.
In the case of an unbacked reserve
currency, the ‘benefits’ of lower borrowing costs accruing to the
issuing country appear to result in overborrowing and overconsumption
relative to the rest of the world, eroding the domestic manufacturing
base over time and widening the rich-poor gap to levels that are
socially destabilising. Trade wars, currency wars or other forms of
economic conflict are the inevitable result. In some cases, actual wars
follow. In others, they don’t. But in all cases, the reserve currency
curse is recognized only too late, when an economy begins consuming its
own capital in a desperate and counterproductive attempt to maintain its
previous standard of living. Austrian economist Ludwig von Mises
described capital consumption as akin to “burning the furniture to heat
the home.” Sure, it might work for a time, but what comes next? The
floorboards? The walls? The roof?
For those who think that a
capitalist, free-market economy would never consume its own capital,
outside of wartime, you may be right. But what of an economy that merely
pretends to be capitalist and free market, but in fact sets the price
of money by decree at an artificially low level so that there is little
incentive to save? Well, take a look, this is what happens: Negative net investment!
US Domestic Investment, Net of Depreciation, % of GDP
It
is highly intuitive to reason that, if an authority mandates a price
ceiling below the natural, market-determined price for a given product,
less of it will be produced and a shortage will result. Well here you
see the empirical evidence: Holding the ‘price’ of money—the interest
rate—artificially low over a sustained period of time leads to a
shortage of savings, capital consumption and, therefore, a lower
standard of living.
Notwithstanding basic economic common sense
and clear evidence as presented above, the US Fed may still honestly
believe that its neo-Keynesian models are right. Alternatively, like
Galileo’s clerical inquisitors, it may be simply unwilling to admit that
the models, or the entire theory, are wrong. The International Monetary
Fund, for what it's worth, has already determined that its models are
flawed, although they also admit they have little idea what to do about
it other than to shoot in the dark—something that is not exactly
reassuring.[6]
The Turkey In the Gold Mine
Today,
as the dollar is not convertible into gold, there could not be a run on
the official US gold stock. But there is no reason why central banks
around the world can not diversify out of dollars and into gold,
something that would have much the same result: The dollar would decline
versus gold and real assets generally, US imports would become more
expensive and economic growth would be highly ‘stagflationary’, just as
was the case during the 1970s, in the aftermath of a substantial dollar
devaluation.
As it happens, these developments are already
underway. According to recent reports, many central banks are
accumulating gold, including Russia, China, Brazil, India, Bangladesh,
Mexico, South Korea, Kazakhstan, Turkey and Indonesia.[7] While central
banks must report their gold reserves to the IMF, the sovereign wealth
funds of these countries are under no such obligation and, as sovereign
wealth funds occasionally operate in effective if unofficial
collaboration with their respective central banks, it is highly likely
in my opinion that there is much more official gold accumulation taking
place than is officially reported.
As they are not free-market,
profit-maximizing entities in the same sense as independent private
investors, these official gold buyers are not as price sensitive. If
they are instructed by their political leadership to diversify their
reserves out of dollars in some amount, or at some regular rate, they
are going to carry out that mandate, regardless of the price, until that
policy changes. This is strategic, not tactical gold buying, as it
were.
This is just one of many reasons why the gold price is
going up. The most fundamental is simply that the values of currencies
such as the dollar are going down as a result of endless quantitative
easing (QE) or other forms of monetary expansion. That the agents
swapping their dollars for gold happen in some cases to be
price-insensitive official institutions is just one mechanism by which a
global shift out of paper into hard assets is taking place.
I
don’t pretend to know exactly what is going to happen from one day to
the next. But when you step back and see the larger picture of one
country after another expressing disapproval with the dollar reserve
standard, you can’t help but notice that the game is changing. Central
bank or other official forms of gold buying is but one aspect. Another
is the growing official collaboration on monetary and other economic
matters by the BRICS. Then there are the various bilateral currency
arrangements between an increasing number of countries that allow them
to reduce dependence on the dollar for bilateral trade.
At first
glance, Turkey’s recent admission that it's paying for imports of
Iranian natural gas with gold in order to avoid US sanctions may seem a
small, insignificant development by comparison, but within the larger
context it could have a disproportionate impact.[8] Indeed, Turkey may
be only one of several countries monetizing gold for use in importing
Iranian gas or other goods. As a canary signals danger in a coal mine,
might Turkey be signalling something rather more significant for
international monetary relations?
Quite possibly. Game theory is
highly instructive as to how international policy regimes, once
destabilized by changing conditions or incentives, can suddenly shift
to, or collapse into, a new equilibrium, sometimes in response to
seemingly insignificant developments. When countries that comprise in
aggregate about 1/3 of all global trade flows express dissatisfaction
with the dollar and the IMF, the current international monetary regime
is clearly unstable. When a medium-sized player such as Turkey moves
from one side of the game board to the middle, or to the other side,
there is always a chance that this represents the proverbial ‘tipping
point’ from one equilibrium to another. In this case, if history is a
guide, then as the world moves away from the current, dollar-centric
reserve standard system it will move to one based on mulitiple
currencies, yet with some degree of explicit gold backing for major
currencies.[9]
Why gold? Part I of my book, The Golden Revolution (available here),
concludes with a discussion about why gold has by far the strongest
claim to use as the future international monetary reserve replacement
for the dollar. While historical precedent is important, there are also
two important theoretical points to consider. First, there is no
existing fiat currency alternative to the dollar at present, in the way
that the US dollar provided an obvious alternative to the pound sterling
following WWI. Second, given the increasingly obvious breakdown in
cooperation in international monetary relations, it is highly unlikely
that, as the dollar’s role diminishes, there could be a universal
agreement about how to construct or implement a global currency
alternative to the dollar. Yes, the IMF has proposed precisely this and
(no surprise here) has put itself forward as the bureaucracy that could
manage it, but as discussed above, Turkey, the BRICS and a handful of
other nations don’t trust the IMF to act in their national interest.
They apparently do trust in gold.
As a medium of exchange that
cannot be printed or otherwise manipulated by any one country to somehow
exploit another, gold holds more than just a historical claim to a
future role as international money. It provides a basis for
mutually-beneficial international trade when trust in monetary stability
is lacking. The answer to the question of what currency or currencies
can provide the future international reserve is thus as paradoxical as
it is elegant: Every currency, if linked to gold, and none, as gold
itself provides the trust.
Recent Developments In Financial and Commodity Markets
At
time of writing, global equity markets have corrected modestly lower
from the lofty valuations seen in early October. A series of corporate
earnings disappointments and profit warnings was initially ignored but
finally became so widespread across countries and industries that the
selling pressure intensified sufficiently to reverse the big bull market
that took place over the summer, in anticipation of yet another round
of global monetary stimulus that arrived in September.
I
expressed my concern with equity valuations back in October so I’m not
exactly surprised by this development.[10] However, I am hardly
omniscient and for all I know equity markets will begin to move right
back up again for reasons that may have nothing to do with earnings, or
profit expectations, or anything else that, in a normal world at least,
would be expected to determine prices.
I have written variations
on this theme many times but it seems entirely appropriate to revisit it
again here: We do not live in a world in which financial asset prices
are driven by sensible value judgements but rather speculation enabled
and encouraged by policy makers in a growing number of ways. Applying a
traditional, value-based investment approach in this environment is
fraught with peril.
There are some things about which we can be
relatively certain, however. If the dollar continues to gradually lose
reserve currency status, or does so abruptly in a future financial
crisis, it will reinforce the stagflationary economic conditions already
prevailing in the US and in many other countries. Import prices will
rise, yet growth will remain subdued given that the capital base is
being consumed.
Of course there are things that US politicians
could do to encourage savings and investment rather than consumption,
but these things are politically unpopular. For example, neither of the
two presidential candidates in the recent election advocated even a
small reduction in the size of the federal budget, even though the
deficit remains near record highs and the so-called ‘fiscal-cliff’
approaches. The ‘debate’ was so narrow relative to the vast scale of US
economic problems that it seems a stretch to call it a ‘debate’ at all.
My
impression is that the election was fought primarily on social issues.
Now I don’t want to belittle those who feel strongly about social
issues, but it seems a bit odd that these should determine the election
result for the highest political office in a country founded on the
principle that the federal government should stay out of social issues.
One could be mistaken for thinking that the electorate is by comparison
relatively unconcerned about the economy. I suppose Americans are
schizophrenic, as many peoples seem to be.
Turning to Europe, I
note that the political winds are now shifting decisively against those
who would use the current crisis to centralize yet even more power in
Brussels or in the ECB. This can be seen at both the regional level (eg
Catalonia, Scotland) and the national (eg Greece, the UK, Ireland). At
the margin, such sentiments make coordinated bailouts more difficult to
implement. Although I am hardly supportive of bailouts for weak
euro-area sovereign borrowers (or their lenders, if you prefer), if they
are not forthcoming, this will deal a serious blow to European equity
markets.
Speaking of political winds, there are also disturbing
developments in France, where the government has recently threatened to
nationalize corporate assets in the event that their owners seek to
reduce capacity and fire workers in response to the economic slowdown
well underway. This is not exactly going to attract foreign investment
into the country. In any case, European economic growth is going to be
unusually weak as long as the deleveraging continues, which might be
rather a long time given the starting point.
I would like to
remind readers that, during the stagflationary 1970s, major stock
markets did not perform well. Yes, I know the conventional wisdom, that
stock prices tend to rise with inflation, but then they can also perform
rather poorly, in particular in real, inflation-adjusted terms.
Now
it is the case that, in a historical comparision, stock market
valuations in both the US and Europe are not particularly high. But
really, given the context, why aren’t they particularly low instead?
Sure in some countries, such as Spain, trailing P/Es and other classic
valuation measures are essentially distressed, indicating good value.
But today’s Spain is tomorrow’s… well, I don’t know. Pick a country, any
country. There are plenty of candidates. So notwithstanding the modest
correction of late I believe it is still too early for a general return
to the equity markets.
Turning to bond markets, the outlook is
inextricably linked to what happens with currencies, including of course
the dollar. When a currency devalues for whatever reason, it takes its
bond market with it. Yes, in practice it is not quite as simple as that,
but when it comes to the most overpriced bond markets of today, such as
those for US Treasuries, German Bunds, UK gilts or Japanese government
bonds (JGBs), any devaluation in these currencies is likely to have an
even greater impact on bond holders than on those sitting in cash
instead. (That said, I believe there are pockets of value in distressed
corporate debt and would recommend that readers familiarize themselves
with some of the instruments available for getting some diversified
exposure.[11])
Cash itself, of course, is at constant risk of
devaluation, regardless of currency of denomination. Policymakers have
made it abundantly clear that the value of cash is a policy tool,
perhaps the single most important one there is. I regard it as highly
unlikely that this thinking will change absent a future financial crisis
that not only results in the death of the neo-Keynesian economic
paradigm but also one that shows the current economic policy elite the
door.
That leaves commodities. They may not be the stuff that
powers Wall Street and credit creation but that is where the excessive
leverage in the global financial system resides. Commodities cannot be
arbitrarily diluted, devalued or defaulted on. They do not go bankrupt.
They cannot be created by policymaker whim, although it is true that
misguided regulations or price controls can create artificial scarcity,
which is price supportive. That said, there is no certainty that
commodity prices are going to rise, but if they don’t, this is unlikely
to be the direct result of government action. Indeed, a general decline
in commodity prices would be an indication that governments are finally
backing away from inflationary policies, something that would,
eventually, set the stage for a sustainable economic recovery built on
savings, rather than on debt.
Well I’m not holding my breath. I
fully expect governments to continue to implement misguided inflationary
‘solutions’ to economic problems themselves caused by inflation. And
therefore I am over- rather than under-weight commodities in my
portfolio. Yes, some of these are likely to do better than others in the
current global climate and I take that into account when managing
positions. But much of investing remains a guessing game no matter what
anyone tells you, including me.
The ultimate response to
uncertainty, natural or man-made, is to diversify across a broad range
of assets. What holds true for assets generally holds true for
commodities specifically. I do have a soft spot for gold, but as all
good traders know, emotions are distracting and dangerous. Fortunately,
one doesn’t need to feel emotionally about gold to understand, entirely
through logic and reason, that if the primary source of uncertainty in
the world is the very future of money itself, then gold is likely to
outperform in the event that such uncertainty continues to rise.
Post-Script: A Brief Comment on Recent Developments In the Gold Market
As the topic of gold and gold investing has featured regularly in the Amphora Report,
I am sometimes asked to comment on developments in the gold market.
This has been unusually common of late, due to Germany’s decision to
audit a portion of its gold holdings held abroad and Ecuador’s
announcement that it will follow Venezuela’s initiative from last year
and repatriate at least some portion of its gold reserves held in New
York and London. (As an aside, don’t you ever find it ironic that those
who shout the loudest that gold is but a ‘barbarous relic’ are those who
live and work atop the bullion vaults under the NY Fed or the Bank of
England, for example?)
Well, as it happens, I have long held that
the act of physical repatriation of gold held on a custodial basis
abroad is of more than just symbolic importance. As I wrote in an Amphora Report back in late summer 2011, following Hugo Chavez’s decision to repatriate Venezuela’s gold reserves:
Venezuela’s decision to take delivery of its gold places additional focus on the unique role that physical gold plays in the global economy. In recent months, the central banks of Mexico, South Korea, Bangladesh and Kazakhstan have bought gold on the open market. Others no doubt continue to accumulate gold less overtly. Why? If there was growing faith in the dollar-centric global financial system, would central banks be accumulataing gold reserves at the fastest pace since the 1970s?
No, on the contrary, this trend is a clear indication that global confidence in the dollar continues to erode. Should more countries line up to take physical delivery of their gold, rather than leave it in US custody, it would be a sign that confidence in the US itself, as a safe and reliable jurisdiction for global commerce, is also beginning to erode.[12]
Are we to interpret recent developments
in the gold market as signs that “confidence in the US itself, as a safe
and reliable jurisdiction,” is eroding? As with a handful of other
things discussed in this report, I leave that to the reader to decide.
Resources
[1]
I previously discussed at length the causes and consequences of the
dollar’s loss of reserve currency status in IT'S THE END OF THE DOLLAR
AS WE KNOW IT (DO WE FEEL FINE?), Amphora Report vol. 2 (May 2011),
available here.
[2]
Prior to the global financial crisis of 2008 the Fed purchased
primarily US government bonds. However, it has since purchased a broad
range of assets, including those that were part of the deal the Fed made
with JP Morgan regarding its takeover of failing investment bank Bear
Stearns.
[3] The Fed would be earning seignorage income directly
rather than indirectly were it to purchase interest-bearing foreign
securities instead of domestic ones. Note that the amount of seignorage
income generated rises in proportion to the devaluation of the dollar
relative to the currencies of US trading partners. That devaluation
increases income is a simple accounting identity, although some
Keynesians argue that this income is ‘real’. It is not. It is inflation.
[4]
For a thorough discussion of the official BRIC position on these
matters please see THE BUCK STOPS HERE: A BRIC WALL, Amphora Report vol.
3 (April 2012) available here.
[5] A recent article in the Turkish press detailing his comments on this topic can be found at the link here.
[6]
For a discussion of the IMF’s recent reconsideration of some of their
economic forecasting models, please see THE KEYNESIANS’ NEW CLOTHES,
Amphora Report vol. 3 (2 November 2012). The link is here.
[7] Please see the most recent statistics from the World Gold Council, available at this link here.
[8] This was reported by Dow Jones Newswires and is available at this link here.
[9]
For convenience purposes, smaller countries could always peg their
currencies to that of a major trading partner and, in this way,
indirectly back their currencies with gold.
[10] Please see A VICIOUS CYCLE, Amphora Report Vol. 3 (October 2012), available here.
[11]
For a discussion of distressed investing, please see WHY BANKRUPTCY IS
THE NEW BLACK, Amphora Report Vol. 3 (April 2012). The link is here.
[12] THE BUTTERFLIES OF AUGUST, Amphora Report vol. 2 (September 2011). The link is here.
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