Podcast · Puheenaihe 44 · 2019-10-31 · 57:53 · In Finnish
The International Monetary System — Sami Miettinen on Puheenaihe
Published as “Talous: Kansainvälinen rahajärjestelmä (Sam Laakso & Sami Miettinen) | Puheenaihe 44”
Hosted by: Puheenaihe
Sami Miettinen and Sam Laakso joined Puheenaihe for an hour on the plumbing of the global monetary system — recorded in October 2019, at the tail of what was then the longest expansion in American history and simultaneously one of the weakest by average annual growth. The timing gives the conversation a particular flavour: much of what they describe as a coming problem arrived within five months.
The argument that carries the episode is about pegs. A gold standard rebalances itself: gold flows to wherever goods and services are produced most efficiently, and inflationary pressure follows it. What breaks the mechanism is not gold but the peg — tying a local currency one-to-one to an international settlement currency while labour markets stay rigid and cannot adjust. Sami’s point is that this is precisely the euro’s defect too, which is why a Greek bank deposit and a German one are not the same asset despite sharing a denomination, and why the banking union’s €60bn of common money against a bank sector balance sheet in the tens of thousands of billions is not really insurance.
On central banks the two are blunt: the level of the policy rate is a fully deliberate choice, made to let states borrow cheaply, and the long-run drag underneath it — slowing productivity and population growth — is not something a rate can fix. The debt has to be adjusted down eventually, because otherwise its real burden is too heavy. Sam’s own expectation is that the euro eventually splits back into national currencies, triggered by a crisis rather than a threshold.
The last third covers what was then new: Russia’s central bank floating a digital gold-backed currency, Facebook’s Libra as an SDR-like basket of four currencies minus the renminbi, and the scale problem — all crypto together at around €200bn against a euro system of roughly €21,000bn and gold at some €8,000bn. It closes on housing: asset-class inflation, a Nordic mortgage comparison, Bloomberg’s fifty million empty Chinese apartments, and why Sami will leverage quality Helsinki property but not equities.
Chapters
- 00:00 — What is money, and can you print more of it
- 03:00 — Expansions do not die of old age; the longest and the weakest
- 06:00 — Rates back toward zero, and Europe permanently negative
- 09:00 — Cheap debt for states as the point of the exercise
- 12:00 — Productivity and population growth as the real drag
- 15:00 — Will the euro split back into national currencies
- 18:00 — What a national currency gives you that a supranational one does not
- 21:00 — Central banks buying gold; Russia’s digital gold-backed currency
- 24:00 — Why gold, and what alternatives to fiat are being tried
- 27:00 — The gold standard’s real flaw is the peg, and the euro shares it
- 30:00 — Automatic rebalancing against rigid labour markets
- 33:00 — The SDR, and Libra as a four-currency basket
- 36:00 — Scale: €200bn of crypto against €21,000bn of euro
- 39:00 — Debt has to be adjusted down; taking the power to borrow away
- 42:00 — A Greek euro deposit and a German one are not the same asset
- 45:00 — The banking union’s €60bn against a €30,000bn balance sheet
- 48:00 — Asset-class inflation and a Nordic mortgage comparison
- 51:00 — China’s fifty million empty apartments
- 54:00 — Leveraging quality property but not equities
- 57:00 — Closing
The recording lives on Puheenaihe’s own channel and they own it. This page is a record of the appearance and a pointer to the original, not a copy of it. The episode carries no published chapter marks; the titles above are derived from the recording.
Sami returned to the same themes with Juhana Vartiainen in Puheenaihe 131 on the ECU-2 basket, and set out the proposal on his own channel in Euro, ECU2 and Hamilton.
From the same session: Neuvottelija's own episode
Topics: Finnish Economy & Policy · Investing & Markets · ← All media visits · Talks & Events · Markdown mirror: index.md