Читать книгу The Post Pandemic Economy - William E. Scholz - Страница 14

International monetary management and currency management must be radically reformed. The coronavirus pandemic has illustrated numerous challenges with the global monetary order. Foremost, The Federal Reserve's structure is not designed to anticipate or remedy economic shocks. We will describe this in further detail below, but the underlying cause of monetary weakness is the global Federal Reserve System.

Due to a weak monetary authority, the Federal Reserve System, creates a system of global winners and losers. Winners are countries with an already strong economy. Losers are developing economies perpetually kept in a state of debt or "vassal" relationships with commercial partners. The Federal Reserve System is primarily an institution of colonialism, not an institution designed to encourage, support, and protect bi-lateral trade and free, fair, and competitive markets.

The final problem with the Federal Reserve System is that the system is designed for debt. Debt-based economic relationships and transactions are quite literally how the Federal Reserve System determines the volume of monetary supply in the economy. A debt-based system made sense during an era of colonialism as a tool to introduce currency markets to developing countries. However, the world is on a new precipice. As monetary markets have been long established, the world is transitioning to an innovation-based economic order. With innovation comes technological progress, but also increased wealth for the worker.

Financing innovation requires equity or risk capital. Financing new or nascent markets, or markets with high rates of borrowers, requires debt-based financing. The Federal Reserve can use debt financing as a "bound" to determine currency supply in a debt-based financial order. In an equity-based order, new mechanisms to determine the supply of currency are needed. These new mechanisms must change dynamically with the level of human ingenuity, while still maintaining stability in currency markets. A return to a Gold-led standard is needed!

Currently, the difference between the United States Treasury and The Federal Reserve is simple, despite educators’ best efforts to make it seem more complicated. The United States Treasury prints the money, and the Federal Reserve determines the volume of money supply.

In a Gold-standard led currency model, the Federal Reserve is disbanded. A global Treasury, with partnerships at the national level, determines the price of the Gold-standard led currency. The price of the Standard is determined by a bottom-up process that accounts for the production occurring in the economies of member Nations.

Reserve Currency. Details of the arrangement of the Gold-led Standard must be negotiated by member Nations. Proposals may include a combination of precious metals, digital currencies, and supra-national notes. Other possibilities may be a single metal currency such as a pure Gold Standard. Member nations must negotiate at a "Bretton-Woods" style conference the details of the standardization of the world's currency supply.