The Power of Gold: The History of an Obsession
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In order to accommodate the British return to gold after the Napoleonic Wars, Ricardo had proposed limiting the circulation of gold to bars rather than coins in 1819. For a full discussion, see Bonar, 1923.
*As a young staffer at the Federal Reserve Bank of New York during 1940-1942, I had occasion to meet with Harrison in person on a number of occasions. He was marred to Woodrow Wilson's widow. What impressed me most about him was his $50,000 annual salary; mine was $125 a month.
`With too little and too late, the French did participate in loans to Britain in late August, as the crisis was reaching a climax.
*This superb essay deserves reading in full, both for its analysis of the past and the accuracy of its predictions for the future.
*Knox, Secretary of War during World War II, was famous for his remark about the Japanese when he put his arm around the shoulder of T. V. Tsoong, the Chinese Ambassador: "Don't worry, T. V., we'll lick those yellow bastards yet."
*1 heard this story as a Harvard undergraduate in the late 1930s; Professor Paul Samuelson of MIT was good enough to confirm it in personal correspondence.
*Leffingwell regularly sent Norman food packages during World War II and carried on an active correspondence with his old friend.
`Both men died before they could see the product of their work in full flower, Keynes in April 1946 and White in August 1948. Given the ultimate shape of the Bretton Woods system, there is reason to believe that White was the dominant partner, with Keynesrepresenting the poor relation-playing second fiddle.
`See Despres et al., 1966. It is argued there that, like any bank, the United States was lending or investing abroad on long-term while borrowing short from foreigners. Those experts who were generating so much concern about the high rate of growth in U.S. short-term liabilities to foreigners were victims of an accounting illusion. "No bank could survive in such an analytical world [where] the owners of wealth ... insist on what they consider a more `ultimate' means of payment. If the bank is sound, the trouble comes from the depositors' irrationality."
*This attitude was still alive and well at the dawn of the new millennium.
In today's terminology, this trade-off between risk and reward would be called a free option.
*The Average closed out January 1980 at 860.34.
`These data provide a striking insight into the broad improvement in world living standards over the past 150 years. While jewelry production has increased one hundredfold, population has expanded only fivefold. Per capita jewelry consumption, therefore, has increased by twenty times.
*See Neil Shister, "Let Them Eat Gold," Boston Globe, November 13, 1999, p. D1. Shister's eloquent article observes further that "It may not be surprising that in these times of excess and extreme wealth, `Let them eat cake' has become `Let them eat gold'-this time addressed to peers of the rich, not their underlings." Apparently, not everyone appreciates the opportunity: Julia Child, the high priestess of the art of cooking, commented that "I've vaguely heard about it, but I've never eaten gold and don't think I care to."