Regulators apparently succumbed to the idea, peddled by financiers and modern theorists, that if a little financial innovation was good, a lot must be great--even if it was far outside their capacity to monitor.

Thanks to Reihan Salam for the pointer.

Also, James Kwak explains why Europe is in worse shape than we are. It's been years since I read Steve Roach describe the United States as the "tallest pygmy" in world currency markets, and it's a metaphor that just seems to always apply.

CATEGORIES: Cross-country Comparisons , Finance: stocks, options, etc.

COMMENTS (3 to date)

Latest Comment

Floccina writes:

My thought is that the Euro is the opposite of what you want. IMO you want many currencies so that if one goes bad (inflation or deflation) the others can help. Also competition might be good.

Posted February 13, 2009 10:50 AM

Steve Riegel writes:

@Floccina
Don't forget some due-diligence and oversight on the particular currencies that you choose.

Posted February 13, 2009 11:41 AM

Greg Ransom writes:

Arnold, you'll find this piece by Leijonhufvud of interest:

http://www.voxeu.org/index.php?q=node/3065

Posted February 13, 2009 5:42 PM

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