Currency Wars_ The Making of the Next Global Crisis - James Rickards [140]
201 If they are diverse they will respond differently to various inputs producing . . . The extended analysis that follows, including elements of diversity, connectedness, interdependence and adaptability, draws on a series of lectures under the title “Understanding Complexity,” delivered in 2009 by Professor Scott E. Page of the University of Michigan.
207 However, there is strong empirical evidence, first reported by Benoît Mandelbrot . . . This discussion of fractal dimensions in market prices draws on Benoît Mandelbrot and Richard L. Hudson, The (Mis)Behavior of Markets: A Fractal View of Risk, Ruin, and Reward, New York: Basic Books, 2004.
218 Chaisson posits that the universe is best understood . . . The discussion of Chaisson’s theory of free energy rate densities is from Eric J. Chaisson, Cosmic Evolution: The Rise of Complexity in Nature, Cambridge: Harvard University Press, 2001. Chaisson’s specific values for free energy rate densities are given as:
219 In his most ambitious work . . . Joseph A. Tainter, The Collapse of Complex Societies, Cambridge: Cambridge University Press, 1988.
219 Tainter stakes out some of the same ground as Chaisson . . . Tainter, op. cit.
Chapter 11
227 Barry Eichengreen is the preeminent scholar on this topic . . . For Eichengreen’s views on the prospects for multiple reserve currencies, see Barry Eichengreen, Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System, Oxford: Oxford University Press, 2011; and Barry Eichengreen, “The Dollar Dilemma: The World’s Top Currency Faces Competition,” Foreign Affairs, September/October 2009: 53–68.
236 “Countries that left gold were able to reflate their money supplies . . .” Ben Bernanke, “The Macroeconomics of the Great Depression: A Comparative Approach,” Journal of Money, Credit and Banking 27 (1995): 1–28.
237 In support of his thesis that gold is in part to blame . . . Bernanke, op. cit. Bernanke’s specific model states:
M1 = (M1/BASE) × (BASE/RES) × (RES/GOLD) × PGOLD × QGOLD
Where
M1 = M1 money supply (money and notes in circulation plus commercial bank deposits),
BASE = monetary base (money and notes in circulation plus reserves of commercial banks),
RES = international reserves of the central bank (foreign assets plus gold reserves), valued in domestic currency,
GOLD = gold reserves of the central bank, valued in domestic currency = PGOLD × QGOLD,
PGOLD = the official domestic currency price of gold, and
QGOLD = the physical quantity (for example, in metric tons) of gold reserves.
SELECTED SOURCES
ARTICLES
Ahamed, Liaquat. “Currency Wars, Then and Now: How Policymakers Can Avoid the Perils of the 1930s.” Foreign Affairs, March/April 2011.
Bak, Per. “Catastrophes and Self-Organized Criticality.” Computers in Physics 5 (1991): 430–33.
———. “The Devil’s Staircase.” Physics Today 39, no. 12 (1986): 38–45.
Barro, Robert J. “Are Government Bonds Net Wealth?” Journal of Political Economy 82 (1974): 1095–1117.
Barro, Robert J., and Charles J. Redlick. “Macroeconomic Effects from Government Purchases and Taxes.” Working Paper No. 10–22, Mercatus Center, George Mason University, July 2010.
Bernanke, Ben. “Deflation: Making Sure ‘It’ Doesn’t Happen Here.” National Economists Club, November 21, 2002.
———. “Global Imbalances: Links to Economic and Financial Stability.” Speech by Chairman Ben S. Bernanke at the Banque de France Financial Stability Review Launch Event, Paris, France, February 18, 2011.
———. “The Macroeconomics of the Great Depression: A Comparative Approach.” Journal of Money, Credit and Banking 27, no. 1 (February 1995): 1–28.
Blanchard,