Seeing the Woods for the trees1 Comment
The G20 meeting takes place right ahead of the semi-annual IMF and World Bank meetings in Washington on 20 April. This was therefore the ideal time to read Benn Steil’s splendid book, The Battle for Bretton Woods, just out. If you are an FX junkie, it’s as gripping a read as a spy thriller, and it has its own spies, to boot. Who knew that the chief architect of the IMF/World Bank, Harry Dexter White, was actually a Soviet spy? No less an authority than Whittaker Chambers said White did more harm than Alger Hiss (among other things, he gave the printing plates for the post-war German currency to the Russians, who proceeded to print up some $78 billion-worth of currency and trade it for dollars).
If you want to understand the gold standard, the always-doomed dollar standard, why the IMF is in Washington, how the US deliberately humiliated Britain over debt before, during and after WWII as part of a very real currency war (but also out of genuine anti-colonial sentiment that the British never understood), this is the book for you. There’s quite a lot about Keynes, who would be appreciated by the Chinese today for his promotion of a non-sovereign global currency (bancor) over the gold standard and the dollar.
Every year publishers come out with a couple of purportedly serious books on FX, some by VIPs, and I read them all. This is the only one since Paul Volcker’s Changing Fortunes in 1979 that is worth the price. It is non-partisan, well-written, thorough, and chock-full of the historical perspective that can so easily and so often get lost in the hurly-burly of the daily market.