Friday, December 18, 2015

Dick Ware - The IMF and Gold

RESEARCH STUDY 26

The IMF and Gold

Revised edition, May 2001

(originally published as Research Study 20 in July 1998)

by Dick Ware


"...From the written material that survives it seems as though the possibility of a basket including gold was never explicitly considered. In a subsequent article, however,16 the late Sir Joseph Gold gave it as his opinion that even the partial use of gold would be precluded. As the principle architect of the text of the 2nd Amendment, his obiter dicta obviously carry weight. But, as I have suggested, times have moved on and there is no longer any need to anathematize gold, especially if its partial use in this way might improve the economic lot of a small number of countries which need all the stability they can get. The law, perhaps, is too important to be left to lawyers..."


Source:  https://www.gold.org/search/site/RS26Gold.pdf

Based on older post  http://anotherfreegoldblog.blogspot.fi/2013/11/wgc-euro-dollar-and-gold.html

Wednesday, December 16, 2015

Thursday, September 3, 2015

IMF - 1975 - Purchases under the Oil facility for 1975 - Prior use of Gold tranche

Gold tranche - Amount of gold that each member country of theInternational Monetary fund (IMF) contributes as part of itsmembership obligations to the fund, and can readily borrow when facing economic difficulties. See also special drawing rights.



Source: http://adlib.imf.org/digital_assets/wwwopac.ashx?command=getcontent&server=webdocs&value=EB/1975/SM/171899.PDF

CVCE - Plans and studies drawn up after the Werner Report


...


Source: http://www.cvce.eu/en/collections/unit-content/-/unit/56d70f17-5054-49fc-bb9b-5d90735167d0/6cd0fcad-2e67-4abc-a626-7cafbe1fcda6/Resources

 

 

 

AEI - EMS - Texts concerning the European Monetary System

COMMITTEE OF GOVERNORS OF THE CENTRAL BANKS OF THE MEMBER STATES OF THE EUROPEAN ECONOMIC COMMUNITY EUROPEAN MONETARY CO-OPERATION FUND

Texts concerning the European Monetary System 


Agreement between the Central Banks of the Member States of . the European Economic Community laying down the operating procedures for the European Monetary System 



Decision (No.12/79) of the Board of Governors of 13th March 1979 


Agreement between the Central Banks of the Member States of . the European Economic Community laying down the operating procedures for the European Monetary System 
13 March 1979



 Council Regulation (EEC) No. 3180/78 of 18th December 1978 changing the value of the unit of account used by the European Monetary Co-operation Fund





Source:  http://aei.pitt.edu/38739/1/A3700.pdf

CVCE - The difficulties of the monetary snake and the EMCF

"...the EMCF was established on 3 April 1973 30 and was the kernel of the future organisation of the central banks at Community level. Its primary aim was to oversee the proper functioning of the progressive narrowing of the fluctuation margins between the Community currencies. It also had to monitor interventions in Community currencies on the exchange markets. Finally, it was responsible for settlements between central banks leading to a concerted policy on reserves. The fund had legal personality and was administered by a board comprising the governors of the national central banks 31 and one representative from the Commission (who was not a member of the board in the strict sense: he had the right of address, but not the right to vote). Generally, it had to abide by the agreements between the central banks on the progressive narrowing of margins and short-term support. 32 However, the fund did not have its own resources, and its powers were limited because the principle of pooling reserves was not adopted. 33..."

Source: http://www.cvce.eu/en/collections/unit-content/-/unit/56d70f17-5054-49fc-bb9b-5d90735167d0/2d84f078-672e-4ae9-92d5-b4969911442a

ECB archive - 1978 - Outline of an agreement on the European Monetary System 12/12/1978





Source: https://www.ecb.europa.eu/ecb/history/archive/pdf/released/1978-12-12_Outline_agreement.pdf?6b22d1c608512cdaeb35027327f06b4a

---

MORE 

Records released: https://www.ecb.europa.eu/ecb/history/archive/requested/html/index.en.html

ECB - 1978 - Note concerning decisions to be taken with a view to implementing the new European Monetary System



Source: https://www.ecb.europa.eu/ecb/history/archive/pdf/released/1978-12-09_Note.pdf?5368254bb6ca8e40e1b5852aa611e3a2

Wednesday, September 2, 2015

ECB archive 1973 - EMCF - First directive of the Committee of Governors to the agent

British EUROPEAN MONETARY COOPERATION FUND
FIRST DIRECTIVE OF THE COMMITTEE OF GOVERNORS
TO THE AGENT,
DATED 14th INY 1973 




Source: https://www.ecb.europa.eu/ecb/history/archive/pdf/released/1st_directive_EMCF_agent_14_5_1973_EN.pdf?3d9bd073094cf6f76aeb6991b5074dc7

ECB archive - 1978 - Summary of questions and options - annex to the interim report on the European Monetary System - (Heyveart report no. 39)



Source: https://www.ecb.europa.eu/ecb/history/archive/pdf/released/1978-08-23_Summary.pdf?8c49c7e062828e09222f2c60eeb0245b

ECB archive - 1978 - Interim report on the European Monetary System -(Heyveart report no. 39)

21/08/1978


 




Source: https://www.ecb.europa.eu/ecb/history/archive/pdf/released/1978-08-21_Interim_report.pdf?9578a6091c862c83473b37ea6a4ab01b

ECB archive - 1978 - Draft of a letter of transmittal to submit the Heyvaert report No. 39 to the council of imnisters





Source: https://www.ecb.europa.eu/ecb/history/archive/pdf/released/1978-09-08_Draftletter.pdf?43d4548c3c61aea92fdafc63a4554811

BS - RM - The Bank of England’s revealing views on Gold in 1988

A repost of the original article created by at BullionStar:

Source: https://www.bullionstar.com/blogs/ronan-manly/the-bank-of-englands-revealing-views-on-gold-in-1988/

Extract:

"THE EXCHANGE EQUALISATION ACCOUNT’S HOLDINGS OF GOLD 
  1. The EEA’s holdings of gold, including the gold swapped for ECU’s with the EMCF, amounts to 23.8 mn ozs, or some 740 tons. Since the substantial reduction in stocks in the late 1960’s and early 1970’s resulting from the then balance of payments’ crises, there has been no significant change in holdings. At the annual revaluation of the reserves in March 1988, the gold holdings were worth $8.1 bn. However as a share of total reserves they have fallen significantly from 31 per cent in 1980 to 17 per cent of total spot reserves now. Table 1 shows the change.
...
(c) Gold in the international monetary system
11. After the collapse of the Bretton Woods system and the abolition of the fixed parities between domestic currencies and gold, the international monetary community decided in principle to remove gold from the international monetary system. Until late 1978 central banks understood not to add to their gold stocks, and the IMF and the USA reduced their gold holdings through auction.
 12. However, the move to eliminate gold never gathered much momentum, and has now petered out. The European Monetary System (EMS) has given gold something of a new role in international monetary affairs. Gold deposited with the EMCF can be used to obtain currency through the ECU mobilisation process or (were we in the exchange rate mechanism (ERM) through the use of official ECUs themselves). However, EMS membership (or for that matter, ERM participation) does not constitute an overwhelming ground for maintaining present gold holdings, though ECU mobilisation, within limits, makes gold deposited with the EMCF more liquid.
13. [The mechanism for creating ECUs through the EMCF works on both gold and dollar deposits, so that to the extent that gold was replaced by dollars, the EMCF’s capacity to create ECUs would not be affected. Furthermore, the logic of the system is that an identifiable Community asset is created against the deposit of non-Community reserve assets, namely dollars and gold. There is no reason in logic why EMCF members should not deposit 20 per cent of their reserves in non-Community currencies other than dollars as well, eg. Yen and Swiss Francs, if it is desirable to increase the scale of ECU creation or to compensate for reductions in gold deposits.]
14. Looking forward over the longer term, it is possible that if moves towards more managed rates continue, there will be renewed attempts to restore gold to a more formal role as a reserve asset. It was interesting to note the amount of speculation along these lines in the US last Autumn, following Secretary Baker’s proposal for a commodity indicator (including gold), even though Secretary Baker was at pains to make it clear that he was not advocating a commodity standard. However, the probability of this happening is not sufficiently high to justify the UK retaining its gold stocks on these grounds alone.
15. Gold is therefore left with something more than a residual function. Its possession is likely to increase confidence in the holder’s currency, at least in times of difficulty; and although it is illiquid compared to many financial assets, and expensive to store, in most circumstances it can be used as security for borrowing or to obtain currency through swaps.

ECB - 1978 - Outline of an agreement on the European monetary system





Source: https://www.ecb.europa.eu/ecb/history/archive/pdf/released/1978-12-12_Outline_agreement.pdf?6b22d1c608512cdaeb35027327f06b4a

IMF adlib - 1964 - "International Reserve Units" Compared With Gold Tranche Positions in the Fund

Prepared by the Research & Statistics Department March 16, 1964

Content:
 
1. "International Reserve Units"
...
2. Gold Tranche Positions in the Fund
...
3. Similarities Between Reserve Units and Gold Tranche Positions
...
4. Differences Between Reserve Units and Gold Tranche Positions
 ...

Extract:
 
"The Bernstein plan does not spell out how positions created proportional to quotas can be held proportional to gold holdings (unless quotas are proportional to gold holdings, which does not appear to be the intention). This point could be resolved by countries trading gold for units among themselves, or by some kind of transitional provisions."


Extracts from Mr. Bernstein's Paper on "A Practical Program for International Monetary Reserves"

Foreign Exchange as Reserve Units






Source: http://adlib.imf.org/digital_assets/wwwopac.ashx?command=getcontent&server=webdocs&value=EB/1964/DM/254005.PDF

CVCE - TPS - Bibliography

Bibliography

Source: http://www.cvce.eu/en/education/unit-content/-/unit/32211249-e856-4268-b787-3e816f0764db/1723ab44-7f55-472e-9cc0-cbd70e1c5e75

IMF adlib - 1978 - Arrangements on Gold Among the Countries of the Group of Ten


January 19, 1976





Observation:
1. No price peg
2.Official G10 stock under ceiling
3. CB governed trading
4. Gold reporting to BIS and IMF
5.Validity 2y


Arrangements expired in January 31, 1978




Result is status quo on the IMS non-system.

Source: http://adlib.imf.org/digital_assets/wwwopac.ashx?command=getcontent&server=webdocs&value=EB/1978/EBS/236639.PDF

H/T to

IMF adlib - Report on G-1O Gold Arrangements


Basle meeting on gold arrangements, January 1977, G10 governors and IMF Managing Director

Observation:
1. BIS is tracking movements of monetary gold
2. Establishment of ceiling
2. Gold for minting could be repurchased


Source: http://adlib.imf.org/digital_assets/wwwopac.ashx?command=getcontent&server=webdocs&value=EB/1977/EBS/231472.PDF

H/T to

Monday, August 24, 2015

BdF - HH - The global financial cycle and how to tame it

International Symposium of the Banque de France “Central banking: the way forward?”
Paris, 7 November 2014

"...
Excessive elasticity of the international monetary system 
My second remark is related to the international monetary system. Since the end of the dollar’s link to gold, the de facto global anchor of the system is just the aggregate of the domestic monetary policies of the major reserve currencies. These policies may serve the domestic needs of each country or currency area. But this does not mean that they add up well for the world economy as a whole. The lack of a strong anchor is a key factor behind the excessive elasticity of the system. This means its inability to prevent the build-up of financial imbalances in the form of unsustainable credit and asset price booms.
The global policy interest rate needed for the entire world is very hard to achieve given the near-zero policy rate (negative in real terms) in the G7 countries (Graph 3). In particular, the IMF’s SDR interest rate in October was 3 basis points, with negative contributions from three-month eurepo and Japanese government bills.
 The nominal global policy rate is currently around 2% (Graph 4). In a world growing in nominal terms by 5–6%, the global policy rate should surely exceed its current 2% level. The influence of the 3 basis-point SDR rate on this 2% global policy rate is one of the world economy’s great asymmetries.
I commend the IMF for trying to integrate the global dimension in its spillover reports. But the monetary policy recommendations for reserve currencies in its Article IV or World Economic Outlook reports tend to take a purely national perspective. Indeed, over the past 15 years in my recollection the IMF’s recommendations on monetary policy have almost always been in the direction of more easing. This suggests to me that the global perspective of the build-up of financial imbalances has been missing. All this means that the lack of global anchor of the international monetary system, well described by Tommaso Padoa-Schioppa, remains. And so does the system’s excessive elasticity and inability to constrain effectively global liquidity. 
..."

Source: https://www.banque-france.fr/fileadmin/user_upload/banque_de_france/La_Banque_de_France/Speech-Herve-Hannoun-symposium-141107.pdf

Sunday, August 23, 2015

1973 - MOF VIEWS ON MONETARY REFORM

SUMMARY: FOLLOWING ARE VICE MINISTER INAMURA'S VIEWS ON MONETARY REFORM. THESE INDICATE DESIRE IS FOR ONLY SMALL MODIFICATION FROM PRESENT SYSTEM. EMPHASIS IS ON STABLE EXCHANGE RATES, TO BE CHANGED ONLY IN CASE OF FUNDAMENTAL DISEQUILIBRIUM. ELASTICITY FOR SYSTEM SHOULD CONTINUE TO BE THROUGH PROVISION OF CREDIT. AS CREDITOR COUNTRY JAPAN NOW IN FAVOR OF MANDATORY SETTLEMENT IN STRONG INTERNATIONAL ASSETS.

"...
6. IF THESE TECHNIQUES CAN BE EXPANDED SO THAT JAPAN CAN CONFIDENTLY GENERATE OUTFLOW OF YEN DENOMINATED LONG TERM CAPITAL TO FINANCE CURRENT ACCOUNT SURPLUS THEN PRESENT FL.."OAT SYSTEM MAY BECOME MORE ATTRACTIVE TO GOJ. THIS ESPECIALLY TRUE IN CONJUNCTION WITH FLEXIBLE USE OF CAPITAL CONTROLS WHEREBY FOREX SUPPLIES AND DEMAND CAN BE REGULATED UNILATERALLY TO INFLUENCE YEN/DOLLAR RATE. SUCH A SYSTEM, WHICH RESEMBLES PRESENT FLOAT, IF IT COULD BE CONTINUED, MIGHT OFFER JAPAN BETTER ALTERNATIVE THAN OPERATING UNDER REFORMED IMF RULES..."

Source: https://search.wikileaks.org/plusd/cables/1973TOKYO08319_b.html

THE HISTORY OF U.S.RELATIONS WITH OPEC: LESSONS TO POLICYMAKERS


By JAREER ELASS  and  AMY MYERS JAFFE

SEPTEMBER 2010


"...Nixon and Kissinger believed that if Israel was victorious in the war, the Arab countries would realize that the best way to achieve their objectives would be through cooperation with the United States and its diplomatic efforts rather than by seeking military backing from the Soviet Union..."

"...However, Saudi Arabia was recognizing the need to put an end to the embargo, particularly after  Shah Mohammed Reza Pahlavi of Iran proposed what  some referred to as the “Christmas Eve  massacre”—a more than doubling of the pric e of oil from $5.12 to $11.66 a barrel at a  December 1973 meeting in Tehran. King Faisal wa s aware that such a gigantic price jump,  coupled with a reduction of OP EC output, would prove disasterous to the West and undermine  Washington’s ability to thwart communism. Three  days later, Saudi Arabia led other Arab OPEC members in agreeing to increase their output, beginning the end of the embargo. However, Arab oil ministers only unconditionally lifted the embargo on March 18, 1974, after Kissinger had demonstrated movement on an Israeli-Egyptian resolution to the conflict, with the kingdom announcing a one million b/d boost in its oil production..."

"...In this post-embargo period, the United States began to work on diplomatic strategies to reduce the power of OPEC. As Henry Kissinger notes in his memoir, Years of Renewal, “For the power of OPEC to be broken, solidarity among the industrial democracies had to be established across a wide front, both political and economic.” Nixon called a Washington Energy Conference in February 1974 and that led to the establishment of the Energy Coordinating Group (ECG). As President Ford took office, this ECG was being institutionalized into the International Energy Agency (IEA), with a substantive program in “emergency sharing; energy conservation; active development of alternative energy sources; creation of a financial safety net.” The United States also appealed to key countries like Saudi Arabia to consider the benefits of consumer-producer cooperation. U.S. bilateral economic development commissions were created with Saudi Arabia and Iran, with an eye to encourage the use of oil surpluses for nation building and development projects. The U.S. aim was to “reduce the producers’ free funds for waging economic warfare or blackmail against the industrial democracies, and to return some of the extorted funds to our economy.”    ..."

"... As student protests against the Shah Pahlavi began in Iran in early 1978, Iran and Saudi Arabia came together that following June to thwart efforts by price hawks within OPEC to fix the price of OPEC oil in a currency other than the U.S. dollar. At the very least, these hawkish producers were pushing to raise the price of OPEC oil to mitigate the declining purchase value of their oil revenues resulting from world inflation and the diminishing worth of the U.S. dollar, the currency in which OPEC was being paid for its oil...."

"By the summer of 1984, Saudi Arabia surprised its OPEC colleagues and the oil markets by exceeding its voluntary quota of 4.5 million b/d by one million b/d, causing oil prices to slide further. The Saudi move was ostensibly the result of the kingdom’s decision to exchange some 34 billion barrels of oil for 10 new Boeing 747 jetliners in a massive oil for goods barter arrangement—a deal brokered by the Reagan administration. Significantly, the Boeing planes oil barter deal involved a hidden discount for the Saudi oil at below official prices and as such destabilized the oil market even more.

By the summer of 1985, Saudi Arabia’s production had fallen to just 25 percent of its capacity, and the kingdom made the decision to start an oil price war to claw back its market share. The result was a price collapse, with oil hitting a low of $8.76/bbl (OPEC basket equivalent) in July 1986. It is unclear how much influence, if any at all, that the Reagan administration had on the Saudi decision to flood the markets with its oil in 1986. But the United States was certainly grateful for lower oil prices that perhaps, not coincidentally, also helped bankrupt and disable the Soviet Union, which was dependent upon oil for its hard currency.

The improvement in U.S.-Saudi relations and a unified worldview about the Soviet Union was accompanied by similarly friendly oil relations. Saudi Arabia sought oil refining and downstream investments in the United States and, in 1981, Saudi Oil Minister Hisham Nazer made an important policy pronouncement during a visit to Harvard University. Nazer called for a system of “reciprocal energy security” and implied that, in return for demonstration of security of demand on the part of the United States, America could gain guaranteed access to a “fairly priced ocean of oil...

...Oil markets were generally oversupplied and oil prices remained relatively low during the late 1980s, despite the continuation of the Iraq-Iran war through 1988. From 1987 to 1990, Kuwait and other GCC members of OPEC “helped keep oil prices down by exceeding OPEC-assigned production quotas.” The low prices not only helped the U.S. and global economy, adding to demand for GCC oil, but also were thought to hurt the pocketbooks of Iran and Iraq, thereby containing their potential military threat within the greater Gulf region. However, this reprieve ended quickly when Iraq invaded Kuwait on August 2, 1990.  Within days, President George H.W. Bush had authorized the dispatch of American troops to Saudi Arabia as part of Operation Desert Shield. On August 6, the U.N. Security Council established strict economic sanctions on Iraq, effectively outlawing all Iraqi and Kuwaiti oil exports. Supplementing a request made in person by then-U.S. Defense Secretary Richard Cheney to allow U.S. troops in Saudi Arabia to ensure that Iraq did not continue to Saudi borders and to position the United States to repel the Iraqi invasion, the U.S. president sent a letter to King Fahd requesting that the kingdom increase its oil production to a maximum level to assure that the impact of the loss of Iraqi and Kuwaiti crude oil would be ameliorated. King Fahd granted the request, and Saudi Arabia began investigating how much oil was needed in the market—and how quickly it could expand its output potential to meet this demand..."

"...OPEC disarray in the early years of the Clinton White House took oil prices off the front burner in the United States again for several years. Ironically, the Clinton administration’s first tangle with OPEC came not from concerns that the cartel would restrict oil output and hurt the U.S. economy, but from fears that sharply falling oil prices might harm important U.S. allies such as Mexico. As oil prices fell to under $10/bbl in the wake of the Asian financial crisis of 1998, Energy Secretary Bill Richardson during a visit to Riyadh—which was ostensibly scheduled to discuss American oil firms participating in the potential upstream opening in Saudi Arabia that had been broached to U.S. oil firms by then-Crown Prince Abdullah in late 1998—reportedly raised the administration’s concerns about market oversupply and extreme price volatility with Saudi leadership. At a joint news conference with Richardson, Saudi Oil Minister Naimi said oil markets were oversupplied and that the kingdom promised to take steps to avoid harming the global economy. Former Saudi Oil Minister Yamani, speaking in Houston in the fall of 1999, told an audience that Richardson had “saved the oil industry” through his discussions with Naimi and the Saudi leadership, as the secretary had “persuaded” the kingdom into changing policy to help lift prices. The Saudis did not appear to require much of a push to want to restore prices, with the kingdom reportedly set on re-capturing a WTI price of $18-20/bbl as quickly as possible. .."




Source:  http://bakerinstitute.org/media/files/Research/e3ef09d6/Amy_Jareer_U.S._Relations_with_cover_secured.pdf

Saturday, August 22, 2015

U.S. Foreign Economic Policy and Relations with Japan, 1969-1976

Thomas W. Zeiler

The University of Colorado

Working Paper No. 1

U.S.-Japan Project


Source: http://nsarchive.gwu.edu/japan/schaller.htm


U.S.-JAPAN PROJECT WORKING PAPER SERIES


Source:  http://nsarchive.gwu.edu/japan/usjwp..htm

OIL - Euro Pricing of Crude Oil: An OPEC's Perspective


Euro Pricing of Crude Oil: An OPEC's Perspective
Samii, V. Massood
Thirunavukkarasu, Arul
Rajamanickam, Mohana
Southern New Hampshire University

Abstract:  In the late 1970s and the early part of th e 1980s, a debate emerged within the Long Term Strategy Committee of the Organization of Petroleum Exporting Countries (OPEC) whether to continue the prici ng of crude oil in United States dollars or to shift to an alternative currency. This debate was rooted in the persistent decline in the value of the United States dollar relative to other global cu rrencies. The choice of currencies available to price crude oil was limited for OPEC because of the inadequate liquidity of most other currencies. With the recent emergence of th e euro, the issue of choice of currency for pricing crude oil has emerge d once again for policy discus sion. The current paper is focused on the implications of a shift in the pr icing of crude oil from United States dollar to euro on OPEC members. Winners and lose rs are identified based on economic gains and losses. It is concluded that while such a policy would incrementally benefit OPEC en bloc, it would result in a disadvantage for th e countries whose major trading partner is the United States and, therefore, would not be a Pareto optimal solution.











Source: http://www.luc.edu/orgs/meea/volume6/massood.pdfhttp://www.luc.edu/orgs/meea/volume6/massood.pdf

OIL - The cartel in retreat

1993 M. A. Adelman 
Abstract:
In 1981, the price of oil was $34 in current dollars ($50 at 1992 price levels). The consensus was that it would keep rising toward the cost of synthetic crude oil or some such long-run ceiling. In fact, the cartel had fixed the price far above the point of maximum profit. OPEC members did not lose their power, they regained their wits, and saw their limits. The drop in consumption in belated response to the two price explosions was borne entirely by OPEC as price guardian. Non-OPEC production rose. OPEC market share fell to less than 30 percent. OPEC members kept a remarkable cohesion. During 1982-1985 Saudi Arabia absorbed most of the loss, and prices declined moderately. But when Saudi exports went to near-zero, they ceased to be the restrictor of last resort. The price fell below $10, until OPEC could patch up a market sharing deal and bring it back to the neighborhood of $18, where it has remained.Consumption revived, and OPEC exports have approached but not equaled the old peak. The once-massive excess capacity dwindled, but in theory and in fact this had little effect on the price. Each increase in exports meant a fresh contention over sharing it among members. OPEC meetings and disputes became almost continuous. Each member did its best to push the burden of restriction on to others. This limited OPEC cohesion and power over price. The oil market became "commoditized," with many re-sellers probing for even a slight gain. Adherence to a fixed price became much more difficult to monitor. Increasing reliance had to be placed on production restraint. Low prices caused Iraq to be hailed as savior for threatening Kuwait and Abu Dhabi, but this in turn provoked invasion and war. Despite the shutdown of two major producers, then one, prices have not revived. The cartel mission is to trade off market share against a higher price.But their market share remains too low to bear the losses a higher price would bring. Until it increases, the cartel stays in a trap. Whether revenues were higher or lower, OPEC members overspent them and ran current-account and budget deficits. They had difficulty raising money for oil capital expenditures, which were only a small fraction of total government expenditures. The Iraqi aggression was an extreme example of this tension, and of thetemptation of a rich neighbor. The world oil industry is an oddity. Socialism is repudiated everywhere, yet most oil is produced by bumbling state companies. The travail in the Former Soviet Union is the extreme example. Taxes on crude oil production in non-OPEC countries is usually regressive and hinders development. But past mistakes are present opportunities, and make likely continued long-time growth of non-OPEC oil, with the OPEC price stuck in the market share trap.
Quotes:
Some samples:


Yamani and barter deal:


Nineties: 

Joint decision of not using strategic reserves to support high oil price:


Source: 35718454.pdf

Wednesday, March 4, 2015

BdI - R.Ossola

"E' MORTO RINALDO OSSOLA

ROMA L' ex ministro per il Commercio estero ed ex direttore generale della Banca d' Italia, Rinaldo Ossola è morto ieri a Roma. Ricopriva la carica di presidente del Credito Varesino ed era consigliere d' amministrazione delle Generali e della Danieli. Più volte ministro per il commercio estero nei governi Andreotti del 1976 e 1978, dopo aver lavorato per lunghi anni alla Banca d' Italia, di cui era diventato direttore generale nel 1975, Ossola era rientrato successivamente nel mondo bancario ricoprendo vari incarichi in Italia e all' estero..." 

Source: http://ricerca.repubblica.it/repubblica/archivio/repubblica/1990/12/08/morto-rinaldo-ossola.html

1965 - Ossola group report: http://www.bis.org/publ/gten_b.pdf

Saturday, February 21, 2015

BUBA - Currency Blocs in the 21st Century

Federal Reserve Bank of Dallas Globalization and Monetary Policy Institute
Working Paper No. 87
*Christoph Fischer Deutsche Bundesbank July 2011

Source: http://www.dallasfed.org/assets/documents/institute/wpapers/2011/0087.pdf

Wednesday, January 21, 2015

134. Memorandum From the President’s Assistant for National Security Affairs (Brzezinski) to the Cabinet

  • SUBJECT
  • Energy Policy
Secretary Blumenthal has reported to the President that, in his conversations with Middle East leaders,2 it has become clear to him that the willingness of the oil exporting countries to cooperate with the U.S. in their oil pricing policies will depend to an important degree on their seeing evidence of our resolve to face up to this situation, specifically by putting in place adequate energy legislation.
The President asked me to report the above to you. He further asked that you make this point in your statements and speeches regarding our energy policy.
Zbigniew Brzezinski

Source: http://history.state.gov/historicaldocuments/frus1969-76v37/d134

122 Memorandum of Conversation

"...In a contingency basis: Offer preferential treatment for OPEC (Saudi) assets in return for (1) a Saudi commitment to progressively increase production levels, to continue to moderate price decisions within OPEC and to produce enough oil to prevent future tight market conditions, or (2) a Saudi commitment to enforce within OPEC an oil price agreement that provides for small price increases..."

Source: http://history.state.gov/historicaldocuments/frus1977-80v03/d122

Ford Knox old rumor



Source: http://news.google.com/newspapers?nid=861&dat=19800224&id=pSJIAAAAIBAJ&sjid=84AMAAAAIBAJ&pg=7098,5879716

H/T @KoosJansen

Monday, January 19, 2015

RM - Financial Crises and the International Monetary System

Robert MundellColumbia UniversityNew York, NY 100
27March 3, 2009

Source: http://www.normangirvan.info/wp-content/uploads/2009/03/mundell.pdf

PMG - The Collapse of the Bretton Woods Fixed Exchange Rate System

"The collapse of the Bretton Woods system of fixed exchange rates was one of the most accurately and generally predicted of major economic events.’ Hind- sight, of course,  sharpens  the  perception of the  inevitability of events  and makes great prophets of those members of the spectrum of analysts who hap- pened to get their predictions right. But the general outlines at least of the key events from 1967 through 1971 were foreseen, starting from the work of Triffin (1960), whose warnings provided  the compass  to policymakers  implementing serious changes in the provision of liquidity  and the administration of capital controls in a vain attempt to preserve the system..."
Source: www.nber.org/chapters/c6876.pdf