Tobin tax

Henry C.K. Liu hliu at mindspring.com
Sun Apr 11 10:18:22 PDT 1999


Jordan Hayes wrote:


> From hliu at mindspring.com Sun Apr 11 08:39:10 1999
>
> Market fundamentalism should not be permitted to be the excuse
> for destructive currency manipulations.
>
> I think giving agency to 'currency manipulations' is to miss the
> point: the value of a currency is merely a reflection of the 'true'
> market conditions; in that sense, it can seen as the thermometer, not the
> cold arctic wind. A speculative run on a currency merely
> underscores the problem and makes it plain for all to see.
>
> I think you've singled out a non-sigle-out-able piece of the puzzle.
>

Quite, but it is a matter of when one select the starting of the cycle. There is indisputable recent evidence that speculative/manipulative runs on currencies have drastically distorted fundamentals, rather than faulty fundamentals causeing the speculation. The theroy of market fundamentalism has not been validated by reality.


>
> I think a Tobin tax (or similar) will only serve as a short-term
> increase in ineficiency; transaction costs have never much been a
> problem for large markets.
>
> /jordan

Agree.

Henry C.K. Liu



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