[OPE-L:2056] Re: [MIKE WILLIAMS] electronic money

riccardo bellofiore (bellofio@cisi.unito.it)
Wed, 1 May 1996 03:18:53 -0700

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At 9:44 29-04-1996 -0700, Costas Lapavitsas wrote:
>Duncan argues very lucidly that modern money is ultimately state
>debt. I have a question, but first I might as well stress that I am
>not a gold crank. Is it at all significant that central banks today
>hold more gold than ever, perhaps 500f all the gold that has ever
>been produced? If they are worried that off-loading the gold would
>destroy the valuation of reserves throughout the credit system, what
>is the significance of this for theory?

As Duncan [2047] I do not have a true answers (and, BTW, I agree with
Duncan's suggestions). But let me add a theoretic point. If there is not a
world bank, hence international payment among national central banks must
be done either in regime of mere credit (with deferrement of payments) or
in regime of barter (exchanging commodities). For well known reason, in the
latter instance gold is the most obvious choice. We can add forward-looking
behaviour here.


Riccardo Bellofiore e-mail: bellofio@cisi.unito.it
Department of Economics Tel: (39) -35- 277505 (direct)
University of Bergamo (39) -35- 277501 (dept.)
Piazza Rosate, 2 (39) -11- 5819619 (home)
I-24129 Bergamo Fax: (39) -35- 249975