Friday, February 18, 2011

My Letter to the Wall Street Journal re: Regulating Imbalances

Subject: Impossible Task
Date: Fri, 18 Feb 2011 09:55:51 -0500

re: G-20 May Agree on Imbalances Measures

Dear Sirs:
The G-20 is attempting the impossible when it believes that it can establish and enforce rules and guidelines to prevent and/or cure global economic imbalances. Such imbalances that exist today in current account, public and private debt, and foreign reserves are enabled and prolonged by economic interventions made possible by government control of fiat money. None of these imbalances can be sustained in a free market, sound money environment. Countries that import too much lose gold, prices fall, and the gold outflow reverses; thusly, gold is an automatic market regulator of current account and reserve imbalances. Interest rates take care of both public and private debt levels. Wiley investors, the best protectors of their own money, will demand onerous terms of risky creditors or cease to offer terms at all. Get government out economic matters and send the pompous G-20 politicians and bureaucrats home.

Patrick Barron

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