Tuesday, March 14, 2006

Armchair economists

Business Day published this letter of mine in April last year. The comments are still valid. Quick tip on how to get published in Business Day. Short (less than 100 words), pithy and witty! Don't even think of rambling like I do in my blog.

All manner of armchair economists (and some more serious such as Cosatu's Neva Makgetla - Business Day, April 8) have called for some intervention (e.g. rate cuts) to devalue the currency. The economist, Professor Antal E. Fekete (Memorial University of Newfoundland, Canada), provides this comment on the debasement of the US currency which I find equally relevant to our own circumstance: "You have to pursue the argument of dismal monetary science ad absurdum to understand it. If a little bit of devaluation is supposed to be good for the country, then a big devaluation should be even better and, reducing the exchange rate to zero, Nirvana itself. Then the country could give away its goods and services to foreigners free of charge. That, finally, will really perk up exports."

No comments: