Wednesday, October 03, 2007

The opposition and their gold standards 

The international reserves have been a hot topic as of late (obviously the quick return to
29.5 billion ahead of schedule was glossed over) From Rosales predicting the apocalypse would be upon us the minute the YES side wins, to
"economists" arguing that the real value of a currency is as simple as comparing M2 with the reserves. Foolish would not begin to describe their voodoo economics, not only since they are arguing against decades of fiat currency practice. But also they now naively assume that the black market rate is tied to their value and not actual supply and demand. I would love to see them put their money where their mouth is and gamble with this little theory on countries with free floating exchanges.

But back to the good news, the reserves are back up in record fashion well ahead of schedule, and if we were to extrapolate current trends we might finish the year at around 34 billion. That is unless the government dips in again.


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