The Monetary Sin of the West, by Jacques Rueff (1972), full text in PDF.
The problem of Western currency is more topical than ever. For ten years now, the international monetary system has been patched up by many expedients that were intended to extend its assured life. It cannot endure very long in the present state.
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I have a question that I’m hoping someone can help me with. After digesting about half this piece, it seems to me that we’re in roughly the same situation as the gold-exchange standard. Take China, for example. The dollars that China gets for its exports come back to the US when China buys US bonds, so our purchase of Chinese products doesn’t reduce our money supply. But the Chinese goernment increases their money supply when they purchase the dollars with yuan. So is the current situation similar to the gold-exchange system that failed in 1971? Any ideas?
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