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Not to put too fine a point on it, but the reason the US Federal Reserve exists is to "manipulate" the dollar. Personally, I've always liked Singapore's approa
by thematrixturtle 5y ago
Not to put too fine a point on it, but the reason the US Federal Reserve exists is to "manipulate" the dollar.
Personally, I've always liked Singapore's approach of anchoring the Singapore dollar to a basket of major currencies. However, they also give themselves leeway by not publishing the basket's constituents or weightings, meaning they can still make the dollar dance by tweaking those.
- lottin 5y agoCurrency pegs are vulnerable to speculative attacks. https://en.wikipedia.org/wiki/Speculative_attack https://en.wikipedia.org/wiki/Speculative_attack
- Aperocky 5y agoChina has more than 3 trillion USD in reserves, which makes any speculative attack essentially financial suicide.
- imtringued 5y agoUsing a negative interest rate to reduce the miney supply is a much better idea than using a peg. To be fair you can do both. A negative interest rate is a speculators nightmare.
- rswail 5y agoI thought that because Singapore is primarily a market/port economy, having its currency pegged against a basket that covers the majority of its trade weightings would help it withstand dramatic movements in individual currency swap rates with the Singapore dollar.