Monday, November 28, 2016

Macro Musings Podcast: JP Koning



My latest Macro Musings Podcast is with JP Koning. JP is an economist who works in the Canadian financial industry and is a walking encyclopedia on the institutional details of central banks and money. He runs a fantastic blog called Moneyness--a must read for anyone serious about understanding money and its history. JP joined me to talk about some of the more interesting institutional arrangements for central banks and money today.

We began our conversation by talking about central banks of Switzerland, Japan, South Africa, Belgium, and Greece. They are unique in that they have stocks that are traded on the stock market. As JP notes, however, these stocks function more like a perpetual bond than an actual stock.

Another fascinating central bank story is that the Bank of England in that it used to allow personal checking. It no longer does this, but it demonstrates that the current restrictions on access to central bank balance sheets has not always been in place. And there are many advocates who would like to see a further openness of central bank balance sheets as a way to stem financial crisis. We discuss the implications of going down this path.

What happens when a central bank has internal divisions and various branches compete against each other? This happened recently in Libya and JP gives us the details. Our conversation then turned to the dollarization of the Zimbabwe economy following its bout of hyperinflation in 2008. We discuss how it happened and the influence U.S. monetary policy has on dollarized economies. We also discuss what appears to new monetary mischief being done by the government of Zimbabwe.

We also briefly touch on the latest case of hyperinflation in Venezuela. The Wall Street Journal had an interesting piece on a man who is considered by the number one nemesis of the Venezuela government for publishing black-market exchange rate of the Bolivar currency.

Our talk ends with a discussion on the Fedwire and the potential for a Fedcoin.

This was a fascinating conversation throughout. You can listen to the podcast on Soundcloud, iTunes, or your favorite podcast app. You can also listen via the embedded player above. And remember to subscribe since more shows are coming.

P.S. Here is a slide show on the evolution of Zimbabwe's currency leading up to the hyperinflation in 2008.

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