Dr. Perry Mehrling on The Dollar Standard, Globalization of Shadow Banking, and Charles Kindleberger
Dr. Perry Mehrling, Professor of International Political Economy at the Pardee School of Global Studies, Boston University, joins Forward Guidance to discuss the health of the global dollar system. Sharing ideas from his latest book, “Money and Empire: Charles P. Kindleberger and the Dollar System,” Dr. Mehrling shares insights on the extension of the dollar to the global south and globalization of shadow banking. Mehrling and Farley explore whether rumors of the dollar’s death are greatly exaggerated, and how the end of a zero-interest-rate-fueled credit cycle could be a “little rocky.”
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“Money and Empire”: https://www.cambridge.org/us/academic/subjects/economics/macroeconomics-and-monetary-economics/money-and-empire-charles-p-kindleberger-and-dollar-system?format=HB
“Money and Empire” on Amazon: https://www.amazon.com/Money-Empire-Kindleberger-Economic-Thinking/dp/1009158570
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“The New Lombard Street”:
Perry Mehrling, Zoltan Pozsar, Daniel Neilson, and James Sweeney, “Bagehot was a Shadow Banker: Shadow Banking, Central Banking, and the Future of Global Finance” https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2232016
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Timestamps:
(00:00) Intro
(01:02) What Is The Global Dollar System?
(02:32) The Dollar Is International, Not Domestic
(06:43) The Inherent Instability Of Thought
(08:49) "The Fed Learned Its Lesson From 2008"
(11:45) Key Features Of A Global Reserve Currency
(20:36) The Fall Of The Sterling Standard After World War 1
(24:02) Sterling Was The Standard, Not Gold
(26:25) "The Crime Of 1971" Was Nixon's DePegging The Dollar From Gold, According to Kindleberger
(27:44) Why Was There Inflation In The 1970s (Instead of Deflation)?
(30:50) Next Few Years Will Be "A Little Rocky"
(36:03) The Globalization Of Shadow Banking
(39:06) Blockworks Research
(40:05) Money Market Funds (MMFs), Comparison Between Now And Great Financial Crisis
(43:44) "The Dollar System Seems To Be Holding Together"
(46:45) The Four Prices Of Money
(56:02) Permissionless
(57:04) Kindleberger's Critique Of The Triffin Dilemma
(01:06:48) The Myth Of Bretton Woods
(01:12:32) What's Missing In Contemporary Understanding Of Kindleberger's School Of Thought
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.