Tuesday round up: Steil and Hinds on the dollar; Domitrovic on the IMF; McKinnon sees stagflation.

From The Financial Times, Benn Steil and Manuel Hinds explain that the dollar’s reserve status is bad for the world and for the U.S.

At Forbes, Brian Domitrovic suggests the IMF has little purpose without fixed exchange rates.

In The WSJ, Stanford’s Ronald McKinnon sees stagflation in the economy.

Not having an exchange-rate constraint, the Fed can conduct a more independent monetary policy than other central banks can. How it chooses to exercise this independence is crucial to the stability of the international monetary system as a whole. For more than two years, the Fed has chosen to keep short-term interest rates on dollar assets close to zero and—over the past year—applied downward pressure on long rates through the so-called quantitative easing measures to increase purchases of Treasury bonds. The result has been a flood of hot money (i.e., volatile financial flows that are subject to reversals) from the New York financial markets into emerging markets on the dollar's periphery—particularly in Asia and Latin America, where natural rates of interest are much higher.

Wanting to avoid sharp appreciations of their currencies and losses in international competitiveness, many Asian and Latin American central banks intervened to buy dollars with domestic base monies and lost monetary control. This caused a surge in consumer price index (CPI) inflation of more than 5% in major emerging markets such as China, Brazil and Indonesia, with the dollar prices of primary commodities rising more than 40% world-wide over the past year. So the proximate cause of the rise in U.S. prices is inflation in emerging markets, but its true origin is in Washington.

In India’s Free Press Journal, S.S. Tarapore discusses the gold standard and that nation’s economy.

In The Washington Times, Richard Rahn reports on a destructive banking regulation that would require U.S. banks to report the names of foreign account holders to their home governments.

From Alhambra Investments, Joe Calhoun suggests Fed Chairman Bernanke has turned the U.S. into a nation of speculators – again.

At CNBC, supply-side foe Peter Peterson talks about the need for higher taxes to fight the debt, but doesn’t mention growth:

Bloomberg notes Grover Norquist’s clout in opposing tax increases as part of a budget deal.

The Washington Post reports Paul Volcker saying that we need tax reforms that raise more than 19 percent of GDP.

Cato’s Steve Hanke challenges Keynesian claims about deficits and growth.

The Washington Post explains how Chinese manufacturers evade U.S. tariffs.

On Forbes, Ralph Benko sees politics behind a recent IRS rules change to tax donations to 501(c)(4) organizations.

Chris Powell of GATA comments on our WSJ article on Mundell.

At Asia Times, David Goldman disagrees with some elements of Mundell’s analysis.

The National Foundation For American Policy reports that children of immigrants drive U.S. achievements in science and math.

In The NYT, Bruce Bartlett critiques the Fair Tax.

Thursday round up: Tarapore, Forbes and Kudlow on gold; Ferrara on the dollar's role in the mortgage crisis; Malpass on the IMF.

From The Hindu Business Line, S.S. Tarapore suggests the world is moving back to gold as money.

At Forbes, Steve Forbes advises the GOP presidential candidates to highlight the need to relink the dollar to gold.

From NRO, Larry Kudlow suggests the IMF focus on increasing world growth, including gold-backed money.

On The Kudlow Report, David Malpass discusses the IMF:




At Forbes, Louis Woodhill argues Paul Ryan’s budget proposal is flawed and that a new plan for fast growth should be adopted instead.

On Forbes, Peter Ferrara notes the weak dollar’s role in the subprime and financial crises.

The AEI Political Report highlights negative poll numbers on the economy.

In The Washington Post, Ezra Klein suggests higher taxes wouldn’t retard economic growth.

At The Orlando Advocate Online, Paul Evans argues supply-side economics has been discredited.

Weekend update.

On Forbes, Brian Domitrovic notes the best policy mix remains tighter money and lower tax rates.

At Hindu Business Online, distinguished Indian economist S.S. Tarapore defends Robert Zoellick’s recent gold proposal. (Hat tip: Ralph Benko)

Mr Zoellick is being burnt at the stake by anti-gold zealots as he has sounded the death knell of their religion.

As the new international monetary order emerges, however, Mr Zoellick may well be beatified and could be on the way to sainthood as the founder of a new religion. Charles de Gaulle and his adviser, Jacques Rueff, who called for a return to gold in 1965, are perhaps chuckling in heaven!

At New World Economics, Nathan Lewis analyzes Europe’s problems.

In Investor’s Business Daily, Alan Reynolds argues against permanent extension of the Bush tax cuts in favor of larger tax reform.

At NRO, Larry Kudlow reports on his interview with President George W. Bush.

From September, Domitrovic addresses a Tea Party gathering on the history of tax cuts: