Sunday, September 2, 2018

Hidden Gems from Experts on Monetary Policy and System Reform

Over the past few years this blog has endeavored to explore the potential for monetary system change that could impact the daily lives of all us. This whole topic arose due to the last great financial crisis of 2008. That crisis took most of the mainstream experts by surprise and resulted in a mad scramble by central banks (with some assistance from the IMF) to stabilize the current monetary system.

Now we are a decade removed from 2008. There is still much debate about whether or not the unprecedented and experimental monetary policies employed by central banks around the world have been successful or not.

On the one hand, they did manage to prevent the system from imploding and the world from falling into complete chaos economically. Some view that as success. On the other hand, skeptics and critics say that the policies adopted only delayed the crisis and the asset bubbles that have arisen from those policies insure that when the next crisis does arrive, it will be much bigger than 2008 and likely will take out the present monetary system during the fallout.

All of this is why this blog was launched. The average person who is simply working hard to make a living and provide for a family does not have the time and the expertise to try and keep up with all the various views on the stability of the present system or the odds for a new major crisis. Beyond that, it takes time to try and understand the ideas and proposals out there to fix the mess if we do get "the big one" that so many people from all across the spectrum of views still think is coming some day.

This blog was started in an effort to better understand these issues and to try and assess what the risks to the present system are and to learn what ideas and proposals exist to "fix the mess" if and when we do get the mess. Along the way, an opportunity arose to get direct input from some of the leading experts in the world on this whole situation. That input has been documented here over the last few years, but time has passed. The articles are now what I would call "hidden gems" of information that most people probably won't know about, but I think would find interesting.

This article reviews some of those "hidden gems" so that new readers will know about them and because the input given is still quite relevant today. Below is a summary of some of these gems and bit of background about the experts who offered them.


Jim Rickards - Jim is probably the most well known expert who has managed to reach the largest audience of people on these issues. Jim has maintained for years that when the next big financial crisis arrives (and he believes it will arrive), that it is likely that a proposal to replace the US dollar with the SDR issued by the IMF will be put forward to "fix the crisis". This thesis is what started the effort here to learn as much as possible about the SDR and any proposals on the table to use it as the new global reserve currency. Here are some articles from this blog where Jim offered direct input for readers here:

Dr. Warren Coats (former IMF - Head of the SDR Division) - There has been lots of discussion in recent years about the prospects for the SDR to eventually become the new global reserve currency. As noted above, Jim Rickards has really brought this issue into public view. But what is the SDR? How could it replace the US dollar? My thinking was that if you want to understand the SDR and how it functions, why not just ask one of the leading experts in the world about it? So, that is what we did here. Below are articles featuring Dr. Coats explaining both the SDR and his "Real SDR" proposal to use as a global reserve currency. You simply are not going to find a better expert on the SDR than Dr. Coats. Here are some articles with his direct input for readers here:

Robert Pringle  - (former Director for the Group of 30) - Robert Pringle is to central banking as Dr. Warren Coats is to the IMF and the SDR. One of the leading experts in the world without question. As Founder of Central Banking publications, he knows and has known central bankers from around the world and written extensively on the subject. After the 2008 crisis Robert, like many, had concerns about policies being implemented to deal with the crisis. He published his book The Money Trap to express his thoughts on the problem and his ideas for solutions. He has been kind to share his wealth of experience and knowledge here from time to time. Here are some articles with his direct input for readers here:

Robert Pringle and Allan Meltzer debate monetary system reform - Part I  --- Part II

Dr. Lawrence White - We happen to share the same name, but Dr. White is the expert on economics and monetary policy. He is a Senior Fellow at the Cato Institute and Professor of Economics are George Mason University. He is also widely respected as a student of the classical gold standard. Here is an article where he pointed me to his work on the gold standard:

John D. Mueller - a blog reader connected me to John D. Mueller. Mr. Mueller is the Lehrman Institute Fellow in Economics at the Ethics and Public Policy Center in Washington DC. He offered some direct input for readers on the gold standard and on Lewis Lehrman:

Dr. Judy Shelton - Dr. Shelton is currently US Director for European Bank for Reconstruction and Development (EBRD) having accepted that appointment from President Trump. She has long been an advocate for monetary system reform and also has spoken favorably towards the classical gold standard. She recently offered her thoughts on the potential for monetary system reform to readers here in the article linked just below and recently called on President Trump to work towards a new international monetary system:

Keith Weiner - CEO of Monetary Metals - Keith has proposed a new kind of gold standard that he calls an "Unadulterated Gold Standard". We covered it here and he added some additional thoughts for readers on why he thinks it is realistic that we might see something like this emerge in the future. Keith is also working with the State of Nevada on the idea of issuing gold backed bonds payable in actual gold.

Robert Bell, Founder and CEO of KlickEx - Robert Bell is a widely respected expert on Fintech innovation as it relates to both central banking and the potential to use technology to reform the monetary system. In the fall of 2017, he announced that he was partnering with IBM and Stellar to implement what he called the first institutional scale blockchain based payments system in the South Pacific. Robert has provided ongoing input and acted somewhat as a mentor over the past few years. He has shared his knowledge and experience picked up directly on the front lines of what his happening currently with regards to Fintech. Here is a recent interview he did for readers here with thoughts on the both the current monetary system and what its future may look like:

My added comments: There you have it. Direct input from experts on the monetary system we have and ideas on how it could be reformed or even replaced eventually. I will add that I have also gotten of lot of direct input and feedback by email from these experts not intended for use in a public article, but very valuable to me in helping to understand these issues. Hopefully, it has helped me improve the quality of the information presented here.

There are truly some hidden gems of wisdom and information in these articles from some of the leading experts in the world on the topic of monetary policy and the potential for monetary system reform. I would challenge readers to try and find a better collection of experts on these issues anywhere. I don't think it exists and it is my hope that as many people as possible will find this information and share it with anyone interested. 

Readers who want to explore these idea further should go to our market place of ideas for monetary system reform page. It contains all the articles linked above along with some articles with input from some additional experts. There are articles that take a deeper dive into some of these issues there as well.

Added note - 9-4-18: Today CNBC runs this article saying the the "top quant" at J.P. Morgan (Marko Kalonovic) is warning that in the next financial crisis we will see:

"Sudden, severe stock sell-offs sparked by lightning-fast machines. Unprecedented actions by central banks to shore up asset prices. Social unrest not seen in the U.S. in half a century." 

Mr. Kolanvic is quoted in this article as saying the chances of such a crisis happening are "low until at least the second half of 2019."

I forwarded this article to one expert to see what he thought about this article. He agreed with the magnitude of the crisis talked about in this article, but felt that no one could predict timing and also that the crisis will be too big for the Fed and other central banks to control. He said there is no reason to assume we are "safe" until the second half of 2019.

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