Independent Central Bank: The Modern Gold Standard 132.0
The Central Bank of the Philippines struggles for independence An independent central bank is the direct descendant of the gold standard. In fact, it is a very innovative replacement that is fit for our time. The key word here is “independent.” Independence allows central banks to exercise standard monetary policy focused on the value of [...]
New Dangers Lurk as the US Dollar Depreciates 111.0
Three days ago, I heard a guest at Bloomberg call out that the US has become “a source of funds for the carry trade.” Since then, the drop in the value of the US$ and the improbable rise of the peso to PhP 47.70 to US$1 (closing today, 9/18/09) tend to support that claim. If [...]
Addendum to Microfinance as an Ayala Blue Ocean – 2 of 2
I think the simplest and fastest entry for Ayala into microfinance is as a wholesale banker to lending investors and rural banks. The credit products may be in tranches of P1m, P4M, etc. and mirror the microfinance model in most respects.
Crisis as Opportunity for Tycoons to be Teachers 3 of 3
For the Philippines, I see three types of naturally-hedged investment opportunities. While not totally freed from systemic or global problems like the current crisis, they still provide lower risks than the usual businesses. The first type that I remember from when I was working in project finance twenty years ago are hotels and tourist-oriented projects. [...]
Support the Bangko Sentral for a Stable Peso 3 of 3
Let us support the Bangko Sentral ng Pilipinas as a central bank that provides the price anchor, the present-day gold standard, for our economy. Through real independence from political overlords, the price anchor provides long-term benefits: A stable price of money discourages speculation. Success in investing will now require merit in product differentiation and business [...]
Is the Bangko Sentral in Trouble? 2 of 3
What can the people do if the government itself violates the law? Not much especially if no harm is felt. And even if the violation ultimately leads to a bust that hurts the people, much less so, it seems. The violation of the law I am speaking about is the successive administrations’ neglect in funding [...]
Innovators Love a Stable Peso 1 of 3
Note: This post has been re-written in a more accessible and longer style. Please click here for link to Post 132, the better version. An independent central bank is the linear descendant of the gold standard; in fact, its very innovative replacement fit for our time. The operative word here is “independent.” By being independent [...]
Innovation and Independence for RBNZ in Central Banking – 2 of 2
(Start of Part II of II) A critical element in NZís inflation targeting is the separation of roles: monetary policy through the central bank takes care of price stability, i.e. inflation, while fiscal policy through the rest of the government takes care of growth and domestic stability.
Singleton Story of Innovation and Independence for the RBNZ – 1 of 2
As the first country in 1988 to adopt a formal inflation target, New Zealand proves that a nation, as one, can be innovative. New Zealanders used to be really rich in the world even as the country had a strong socialist streak with cradle-to-grave entitlements. The problem started in 1958 when they lost their main [...]
