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Friday, December 02, 2011

Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution (Hardback)

Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution (Hardback)

$15.00
By Michael D. Tanner
A scathing look at how the rise of conservatives who believed big government could be used to further the conservative cause ultimately undermined the legacy of traditional conservatives and shattered the Republican revolution.

Also available in these formats Price
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About the Book
PODCAST: Listen to the author discuss this book.

For conservatives generally and the Republican Party in particular, now is a time of intense soul-searching. For the first time in a dozen years, Republicans have lost control of Congress. As a result, they are being forced to reexamine who they are and what they stand for.

It's about time. After all, more than a decade has passed since President Bill Clinton announced in his State of the Union address that "the era of big gov-ernment is over." Yet, since then, government has grown far bigger and far more intrusive. It spends more, regulates us more, and reaches far more into our daily lives than it did before the Republican Revolution. Behind this alarming trend stands the rise of a new brand of conservatism—one that believes big government can be used for conservative ends. It is a conservatism that ridicules F. A. Hayek and Barry Goldwater while embracing Teddy and even Franklin Roosevelt. It has more in common with Ted Kennedy than with Ronald Reagan.

Leviathan on the Right provides an incisive analysis of the roots and core beliefs of big-government conservatism and the major currents that fueled its growth—neoconservatism, the Religious Right, supply-side economics, national greatness conservatism, and Newt Gingrich–style technophilia—and offers a detailed critique of its policies on a wide range of issues.

The book contains a clear warning that, unless conservatives return to their small-government roots, the electoral defeat of 2006 is just the beginning.

Leviathan on the Right is the recipient of the Lysander Spooner Award for Advancing the Literature of Liberty.
About the Author
MICHAEL D. TANNER is director of health and welfare studies at the Cato Institute and is the leading advocate for private Social Security retirement accounts. He is also the editor of Social Security and Its Discontents, named by Choice magazine as one of its outstanding academic titles of 2003.
ISBN: 
978-1933995007
Number of Pages: 
321

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Saludos
Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
Diplomado en "Gestión del Conocimiento" de la ONU
Diplomado en Gerencia en Administracion Publica ONU
Diplomado en Coaching Ejecutivo ONU( 
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 CEL: 93934521
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Soliciten nuestros cursos de capacitación  y consultoría en GERENCIA ADMINISTRACION PUBLICA -LIDERAZGO -  GESTION DEL CONOCIMIENTO - RESPONSABILIDAD SOCIAL EMPRESARIAL – LOBBY – COACHING EMPRESARIAL-ENERGIAS RENOVABLES   ,  asesorías a nivel nacional e  internacional y están disponibles  para OTEC Y OTIC en Chile

Explaining Central Banks' Gold Purchases

Explaining Central Banks' Gold Purchases

Mises Daily: Friday, December 02, 2011 by

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The last two years marked a significant shift in central banks' attitudes toward gold. Since 1988, central banks have been net sellers of the precious metal. Lacking convertibility of their paper currencies into the commodity, this occurrence makes perfect sense. Why hold a physical asset with costly storage fees when there is no risk that it will ever be needed? Better to hold an interest-bearing (and easily stored) asset like a government security to earn a profit in the interim. So goes the typical explanation for why central banks load their balance sheets with financial assets instead of physical ones.

Yet over the last two years a dramatic shift in gold purchases has occurred. In the third quarter of this year alone, net gold purchases by central banks amounted to 150 tons — more than double the amount of the whole yearly total of 2010. For the first time in over 20 years, central banks of the world are buying more gold than they are divesting themselves of.

Yet if central banks deal exclusively in nonconvertible (and fiat) money, what explains the sudden change of heart?

Convertibility may bring costs for a central bank, but it also has its benefits. In particular, it solved two problems:

  1. How would central banks maintain independence from their governments?
  2. How much money should they supply?

Without convertibility, these two issues get significantly more complicated. In this short essay, we will focus on only the first of these problems.

Independence for a central bank comes from the government that grants it the monopoly rights to money production in its jurisdiction. Congress provides oversight for the Fed, but no government agent specifically determines the day-to-day operations of the central bank. (This is debatable, of course, but that is a separate issue.)

This independence is coveted, and for good reason. A government in charge of its printing press has an incentive to pay for its expenditures not through taxes, or even by debt, but through the relatively painless act of printing the necessary money. The problem with this is the ensuing inflationary bias that a government-controlled printing press has.

An independent central bank issues currency, which is recorded as a liability on its balance sheet. In an offsetting transaction, an asset is purchased that balances the accounting statement. Though this asset can be anything, it has become the norm that it is a relatively safe interest-bearing government bond. Gold still comprises a portion of most central banks' balance sheets, but because it has its own costs and returns no interest, it is a relatively unattractive option.

If a central bank wants to directly increase the money supply, it increases its liabilities (sells cash) and correspondingly increases its assets (buys bonds). If it wants to decrease the money supply, it decreases its assets (sells bonds), which then decreases its liabilities (by decreasing the amount of cash outstanding).

As a thought experiment, imagine what would happen if a central bank didn't sell any assets but instead had them lose value. As an extreme example, imagine that the bonds it holds default due to the insolvency of their issuer. Cash does not automatically have to adjust by decreasing by an equivalent amount. To maintain the accounting equality, the relevant liability that changes is the central bank's equity. Accounting insolvency is defined as being that moment when your equity turns negative.

Deep Freeze

It is difficult to imagine a central bank turning insolvent. Indeed, by and large this doesn't happen, though as Philipp Bagus and I outline in our book, Deep Freeze: Iceland's Economic Collapse, recent examples do exist (see also here). A central bank that holds bonds as its assets only maintains its solvency as long as the issuer of its bonds maintains its own solvency.

The problem that develops is what to do if equity turns negative. Recapitalization must result, but by whom? In an extreme scenario, the government can directly recapitalize the central bank. This action is not without consequences. Central banks enjoy, at least in some countries, high degrees of independence because they do not rely on their governments for funding. Indeed, as they remit profits back to the government at year's end, they are revenue generators for the government.

But a government supporting a central bank is also increasingly interested in how that bank is run. Increased oversight of the monetary authority might be welcomed by some, but it also opens Pandora's box: perhaps with the increased oversight the government will also start influencing the central bank's operating mandates, or even its daily operations.

Gold purchases by central banks are completely rational responses given this independence dilemma. With the solvency of some large governments being increasingly questioned each day, investors and central banks alike are also questioning the value of their debts. Greece just gave private holders of its debt a 50 percent haircut; could the same for governments and other organizations be far off? The solvency of a growing list of countries gets longer by the week — Ireland, Portugal, Italy, Spain — not even the United States is immune to this possibility, as its own debt crisis illustrates.

Holding gold does not eliminate the possibility of negative equity for the central bank (indeed, it might even increase the odds). But given the recent past it makes for an attractive option. As countries demonstrate their difficulties in getting their debts and deficits in order and thus improving their solvency outlooks, the value of their debt becomes questionable as well.

While holding any real asset serves no direct use for a central bank, it does act as an insurance policy of sorts. The solvency of a central bank holding government debt is subordinate to the solvency of the countries whose debt it holds. For a central bank worried about the value of its assets, diversification of its assets into gold makes for a rational alternative.


Saludos
Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
Diplomado en "Gestión del Conocimiento" de la ONU
Diplomado en Gerencia en Administracion Publica ONU
Diplomado en Coaching Ejecutivo ONU( 
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 CEL: 93934521
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Soliciten nuestros cursos de capacitación  y consultoría en GERENCIA ADMINISTRACION PUBLICA -LIDERAZGO -  GESTION DEL CONOCIMIENTO - RESPONSABILIDAD SOCIAL EMPRESARIAL – LOBBY – COACHING EMPRESARIAL-ENERGIAS RENOVABLES   ,  asesorías a nivel nacional e  internacional y están disponibles  para OTEC Y OTIC en Chile

First Lady Michelle Obama looks wonderful, choosing to celebrate the occasion in a tweed overcoat and standout orange scarf.


Fuente:

Saludos
Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
Diplomado en "Gestión del Conocimiento" de la ONU
Diplomado en Gerencia en Administracion Publica ONU
Diplomado en Coaching Ejecutivo ONU( 
  • PUEDES LEERNOS EN FACEBOOK
 
 
 
 CEL: 93934521
Santiago- Chile
Soliciten nuestros cursos de capacitación  y consultoría en GERENCIA ADMINISTRACION PUBLICA -LIDERAZGO -  GESTION DEL CONOCIMIENTO - RESPONSABILIDAD SOCIAL EMPRESARIAL – LOBBY – COACHING EMPRESARIAL-ENERGIAS RENOVABLES   ,  asesorías a nivel nacional e  internacional y están disponibles  para OTEC Y OTIC en Chile