Like the pressure to de-list the US dollar as the base currency for international trade, with innovation activity shifting to Asia, countries other than the U.S. will have an increasingly larger say in international intellectual property rights, standards setting and commercialization of intellectual property.
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First, neither excess reserves nor the monetary base (currency plus bank reserves) are money.
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And the monetary base (currency plus commercial bank reserves) has grown sharply in America, Britain and the euro zone.
The Fed faces a very dangerous tradeoff: risk higher inflation by expanding the monetary base (currency plus bank reserves) in a vain attempt to lower unemployment.
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That is what it is now doing: Japan's monetary base (currency in circulation and banks' reserves at the Bank of Japan) grew by 23% in the year to January.
The lack of any monetary rule to constrain the Fed and the lack of any convertibility principle, as existed under the classical gold standard, means the Fed has a monopoly on base money (currency held by the public plus reserves), the supply of which is determined by a small group of Fed officials who presume to be able to forecast the future.
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So while growth in the Fed's monetary base is overrated when it comes to currency values and inflation (base growth was the same in the '70s as it was in the '80s), the failure of the Nixon Treasury to clearly state its commitment to the Bretton Woods gold standard led to a falling unit of account.
Those reserves bloat the monetary base (reserves plus currency outside the banking system), but they have not been used for money-creating bank lending and investing.
One way is to stop covering the monetary base entirely with foreign currency, and gradually move to a mixture of foreign currency and domestic government bonds.
Though recent economic data has offered some encouraging signs for the recovery, Hoversen argued that given the quality of the recovery and the fact that the main driver behind the earnings is cost cutting and a base effect, the currency markets seem to be reacting to a momentum that doesn't accurately reflect the state of the macro environment.
The most common measure of the monetary base is bank reserves plus currency outside the banking system.
Central banks control the narrowest measure of the money supply, called the monetary base typically, currency plus the reserves that commercial banks hold with the central bank.
It is very diverse, we have an agriculture, base metal, precious metal and currency contract among our best traded.
First, a key sector of the Soviet military industrial base will benefit from Western hard currency and management and technology infusions.
While this may have worked sufficiently through the great credit crisis of 2008-2009, this common currency and shared economic base is experiencing strains coping with fiscal problems of one (or now many) of its underlying constituent countries.
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Under a Dollar Bill system, the monetary base consists of fiat dollars (both currency and bank reserves) created by the Federal Reserve.
Under a Bretton Woods system, the monetary base consists of fiat dollars (both currency and bank reserves) created by the Federal Reserve.
Currently the currency pair is building a solid base towards 1.3250-60.
This has to be taken as a signal of increased confidence that the Chinese economy is robust and operating off a broad enough base to be able to manage a stronger currency.
The combined total of covered money substitutes plus currency is what economists call the monetary base, and by definition completely under the control of the Federal Reserve.
The asset expansion has produced a sharp rise in bank reserves, and hence the monetary base, which is composed of bank reserves and currency outside the banking system.
It means that the euro will have to wait until the dollar falls before it strengthens, which will come, but that is the price of constructing a single currency without first building the culture, institutions and political base to support it more directly.
The Nikkei Currency Index series plots changes in the effective exchange rate against a base value of 100 for the value in 2005.
It is true that the Monetary Base, which used to be considered high-powered money because it consists of currency outstanding plus the reserves of the banking system, expands with the expansion of bank reserves.
We might see more currency appreciation, but not to the degree as we have seen coming from a low base.
This conundrum may also be viewed in terms of the significance of the behavior of the monetary base, which is a combination of bank reserve deposits at the Fed (both required and excess) and currency outside the banking system.
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