Jamesian Philosophy Refreshed

I've recently read and reviewed a book from Princeton University Press entitled HOW GLOBAL CURRENCIES WORK, by Barry Eichengreen, Arnaud Mehlm and Livia Chitu. Two of those authors are affiliated with the European Central Bank. I won't discuss here the main thesis of the book, which I summarized with my usual panache in my review for AllAboutAlpha. Instead, I'll take up a subsidiary point: the role of the Japanese yen on the world scene. There was a time when Japan was seen as the rising economic superpower. If through the 1970s and 1980s, a random individual of average intelligence and just slightly above average interest in following the world's financial news had been asked, "Is the US dollar going to remain the world's central currency for a long time yet and, if not, what might be its replacement?" that person's answer might well have been, "no it won't, and the yen will replace it." But the yen didn't. Nowadays it is ...

Why haven't we gone to barter? Or adopted systems such as bitcoin much more widely? Few people really trust the fiat money created by governments, their printing presses, and their captive central banks. The distrust has been growing in intensity ever since people came to understand that  the official money isn't backed by anything and isn't going to be backed by anything. So ... why haven't people abandoned it? Because the government forces us to use its money? No, it doesn't not really. We must be able to convert some of our wealth into its money at tax time. just as you must be able to pay for your trip on the subway with a subway token. But you can make that conversion just before your subway ride. So other than that: why do people still value the US dollar and other examples of fiat money? One thinker who offers a provocative answer to this question is Guillermo A. Calvo, a former chief economist with the Inter-American Development Bank.  The instit...

  I just want to record here a statistical fact so I won't forget it down the road.  I wrote a story recently for AllAboutAlpha concerning the different prices of "Brent crude" and WTI crude. Brent crude is sold through ICE Futures Europe: WTI through Nymex. Incidental to that story, I also referred to the fact that quantities of Brent crude oil are defined in "cargoes." I didn't answer the question: how many barrels in a "cargo"? Anyway, I'll do so here. Cargo size [600,000 barrels (95,000 cubic meter)] Related facts: The ICE Futures Europe symbol for Brent crude futures is B, also traded on the NYMEX, with the symbol BZ. It was originally traded on the open outcry International Petroleum Exchange in London, but since 2005 has been traded on the electronic Intercontinental Exchange, known as ICE. One contract equals 1,000 barrels (159 m3). Contracts are quoted in U.S. dollars  

As you may recall, just a little over two years ago there was a great deal of fuss which seems likely to go down in history as the "Taper Tantrum." Fed chief Ben Bernanke committed to the idea that the Federal Reserve would taper off its bond buying (that is, its new money creation)in the fall of 2013. In the late spring of that year, some market traders, especially in the bond markets, began to get the idea that "he might really go through with it" and they weren't ready. The Federal Reserve was itself spooked by the volatility in the bonds markets, and it backed off: Bernanke started in with "I didn't really mean it" statements. And left office the following year. Now we have a new Fed chief, Janet Yellen, and she too has proposed what she is calling a "normalization" of Fed policy. This time, too, as the date approaches, some markets get volatile. This time the tantrum is in equities rather than bonds. Why? Mumble mumble ps...