Denmark conducts a fixed exchange rate policy to ensure low and stable prices. As the monetary policy target of the euro area is to keep inflation below, but close to 2 per cent in the medium term, the fixed exchange rate policy provides a framework for low inflation in Denmark.
Since when has Denmark been conducting a fixed exchange rate policy? Denmark has been conducting a fixed exchange rate policy since — initially against the German D-mark and then against the euro. The decision to conduct a fixed exchange rate policy without adjusting the exchange rate for economic policy purposes was made following a period of high unemployment and inflation and major imbalances in the Danish economy. Despite turbulence in the Swedish krona in and the foreign exchange crises in the early s, adjustment of the exchange rate of the krone has not been used actively in Danish economic policy, and the krone's central rate against the D-mark and then against the euro has been unchanged since January What is ERM2?
The euro is at the core of ERM 2, and countries participating in the programme have central rates against the euro, but not against each other's currencies. As part of the convergence criteria, countries wishing to join the euro must participate in ERM 2 and observe the fluctuation band for at least two years.
Denmark does not participate with a view to joining the euro, but only because ERM 2 provides a framework for its fixed exchange rate policy. The European Central Bank, ECB, and the individual member state have an obligation to ensure that the currency observes the fluctuation bands. What is the central rate of Danish kroner?
Denmark participates in ERM 2 at a central rate of This means that the krone can only fluctuate between Since the late s, Danmarks Nationalbank has, in practice, stabilised the krone at a level much closer to the central rate. The krone is floating against all other currencies but the euro. There are no upper or lower limits on how much the exchange rate price of, say, the Swedish krona or the US dollar can move.
Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. The formation of the European Union EU paved the way for a unified, multi-country financial system under a single currency —the euro. While most EU member nations agreed to adopt the euro , a few, such as Denmark and Sweden among others , have decided to stick with their own legacy currencies.
This article discusses the reasons why some EU nations have shied away from the euro and what advantages this may confer on their economies. There are currently 27 nations in the European Union and of these, eight countries are not in the eurozone—the unified monetary system using the euro. Denmark is legally exempt from ever adopting the euro. All other EU countries must enter the eurozone after meeting certain criteria. Countries, however, do have the right to put off meeting the eurozone criteria and thereby postpone their adoption of the euro.
EU nations are diverse in culture, climate, population, and economy. Nations have different financial needs and challenges to address. The common currency imposes a system of central monetary policy applied uniformly. Most EU nations that have avoided the eurozone do so to maintain economic independence.
Here's a look at the issues that many EU nations want to address independently. Since the European Central Bank ECB sets the economic and monetary policies for all eurozone nations, there is no independence for an individual state to craft policies tailored for its own conditions. The UK, a prior EU member, may have managed to recover from the financial crisis by quickly cutting domestic interest rates in October of and initiating a quantitative easing program in March of In contrast, the European Central Bank waited until to start its quantitative easing program creating money to buy government bonds to spur the economy.
Every economy has its own challenges. Greece, for example, has a high sensitivity to interest rate changes, as most of its mortgages are on a variable interest rate rather than fixed. However, being bound by European Central Bank regulations, Greece does not have the independence to manage interest rates to most benefit its people and economy.
Meanwhile, the UK economy is also very sensitive to interest rate changes. But as a non-eurozone country, it was able to keep interest rates low through its central bank , the Bank of England.
Again, non-euro countries have the advantage here. In the case of rising bond yields , these central banks start buying the bonds and in that way increase liquidity in the markets. Eurozone countries have the ECB as their central bank, but the ECB does not buy member-nation-specific bonds in such situations. The result is that countries like Italy have faced major challenges due to increased bond yields.
It became retrogressive to insist, as I often did, repeating what I learned as a boy, that we lived in a constitutional republic. All that mattered, somehow, was that America be more democratic. And not just in politics, but in everything. Democracy became a kind of mood lighting for institutions, corporations, sports teams, and social clubs. America a republic? I might as well have tried arguing that states have the right to secede which I also did, and still do.
During the Trump years, this democracy-as-mantra phenomenon reached a fever pitch. Trump was anti-democratic, people kept insisting at me with very pained and worried expressions on their faces. The country was in grave peril, apparently because the Electoral College was working just as it was designed. Everywhere I turned, I heard people disclaiming the withering of democracy on the American vine.
Anti-democratic forces were abroad, were smuggling in their malicious anti-democracy from Russia and other such reactionary places. If you were for a republican form of government, you were bad. But now, in , I think another lurch has wracked our once republican republic, our erstwhile and ersatz democratic democracy.
For autocracy is the name of the game today. Democracy really did die in darkness. What they want is results, and they want the president to issue proclamations to give those results to them, now. This American flavor of tyranny is hardly a new development, to be fair. Long before Trump arose from the Pre-Cambrian oceans of flyover country to do a Godzilla number on Democracy, presidents Bush, Obama, Clinton, and many prior to their reigns had been making use of the Executive Order to bypass what were either, depending on your persuasion, republican or democratic norms.
Roosevelt, still the grand champion of the genre, issued an astounding 3, other Executive Orders besides that one. Ulysses S. Grant issued of the things during his time in the White House.
Calvin Coolidge, you may be surprised to learn, issued 1, Executive Orders. Old William Henry Harrison, the poor soul who died just a month after inauguration, ought to go down in history as the greatest American president, for he issued precisely zero Executive Orders during his tenure, making him the least autocratic chief executive of them all.
But Harrison was the exception. What we have now is essentially rule by fiat, a slew of Executive Orders and other imperial rescripts with some democratic-republican bunting draped around the edges to make the kingly pretensions of our autocrats look nice and constitutional. The progression? Rome springs immediately to mind.
So does France. But what is different about the American story, or should have been, is that America is supposed to be a federalist arrangement. If and when one state hits on a good policy solution to a certain problem, then other states are supposed to copy that model, thus jazzing up efficiency across the board.
But if this is true, and if federalism is the flywheel of our republic, or democracy, then what are Executive Orders? How do we make sense of those? One guy, at a desk, signs a document, and more than three hundred million people fall in line? Or even more people, if the Executive Order has implications beyond the borders of the United States, which they often do. It sounds like a federal employee grossly abusing his office. Biden is dictating to us born-free, red-blooded Americans.
Biden is reported to be contemplating threatening. Forget about the constitutionality of such a mandate, which is highly questionable. What happened to federalism? Why mandate from the top, when various states are working, even as we speak, on delivering an array of policy solutions to what is, after all, a pandemic, something which is affecting us all? The governor of Florida, and the governors of many other states, are indicating that they will not comply with Mr. That sounds a lot like real federalism to me.
The obvious answer seems to be that Hamilton and Madison got it wrong. Federalism is not federalist after all. Before the Constitution was signed, there were many people in the United States who were Anti-Federalists. They told Hamilton and Madison what they could do with their little Constitution. That is Hamiltonian, Madisonian federalism. That is, in other words, the federal government. It is a hulking, liberty-crushing beast precisely because the Founding Fathers gave us a political Voltron.
They took a lot of parts and assembled them into a big machine. And that machine now rules us, just as one might have intuited, just as common sense would instruct. Give a man the means to power, and he will use those means to seize all power in his own two hands. That is human nature. The Federalists who pushed the Constitution on our forebears told us that they had solved that problem. This is precisely, however, what they did not do. We got played by Hamilton and Madison.
So here we are, with a vaccine mandate by a senile dotard as King George III once was whose main line of work is arranging massive payoffs for his not-quite-Picasso kid something not even George III had the effrontery to try. But it is not too late to admit that the Anti-Federalists were correct. Apostasize from Federalism and be free! Anti-federalism, indeed, is the highest form of federalism. You are a slave, in fact. We are free men and women.
We are better than that. In that same spirit, I advocate now for anti-federalist federalism. I want there to be a scintillating mosaic of tiny republics, or monarchies, or anarcho-capitalist confederacies, or hippie communes, or agricultural cooperatives, or whatever.
Let a hundred flowers bloom on the political veldt. Let federalism shine. But let us have no more federalist federalism. That is the recipe for tyranny. That concentrates all the power into the center, precisely where power should never, ever be. Anti-federalism is real federalism. Let the governors of the states escort OSHA agents, and all other federal representatives, to the state line. State by state, until the federales are back in DC, properly scorned and ignored by the freeborn, as they ought to have been in and forever after.
An income tax audit is essentially a search. Since income-tax audits sometimes lead to criminal prosecutions and jail sentences, why is it not a requirement Since income-tax audits sometimes lead to criminal prosecutions and jail sentences, why is it not a requirement that anyone whom the IRS wishes to audit first be given a Miranda warning, with its notification of the right to remain silent and to have an attorney present?
As per Starting with a question of whether interest rates will be increased once or twice next year. Chair Powell responded:.
We don't think it's time yet to raise interest rates. There is still ground to cover to reach maximum employment both in terms of employment and in terms of participation. Taken literally, he must believe there is a trade off between interest rates and employment.
According to Powell, a rate rise would impede on achieving the maximum employment goal. To make matters worse, no one at the Fed has articulated what maximum employment means. Despite both the media and the Fed not knowing what maximum employment means, the question was asked:.
So, if you look at the progress that we've made over the course of the last year, if that pace were to continue, then the answer would be yes, I do think that that is possible.
Of course, we measure maximum employment based on a wide range of figures, but it's certainly within the realm of possibility.
You know, the concern is a somewhat unusual case where if wages were to be rising persistently and materially above inflation and productivity gains, that could put upward pressure on or downward pressure on margins and cause companies to [ sic ] their employers [ sic ] really to raise prices as a result, and you can see yourself, find yourself in what we used to call a wage price spiral.
We don't have evidence of that yet. Perhaps something imposed by the government, like a mandatory minimum wage, could artificially raise the cost of labor, which in turn will hurt profit margins.
Yet, every time they talk about the wage price spiral, minimum wage laws never come up. The inflation that we're seeing is really not due to a tight labor market. It's due to bottlenecks, and it's due to shortages, and it's due to very strong demand meeting those. Consider the monetary and fiscal policy since the start of the pandemic.
The Fed and Congress created many inflationary programs, like the Paycheck Protection Program or stimulus check programs, which created money for the purpose of giving it to certain members of society. With this new money comes no increase to the supply of goods and services in the economy. But there is an increase to the demand for goods and services. For Powell to say that bottlenecks, shortages and strong demand are causing prices to increase misses the very source of this demand i.
This dance between the Fed and media plays out its continuous loop over and over again, but it is all part of the process; an unapologetic gathering between those who control the media and those who control our money. Previous sustained surges in consumer prices — otherwise described as big levies of inflation taxation - have brought in their wake episodes of monetary normalization.
The surge The surge will likely prove an exception thanks in no small part to an unholy alliance between crypto and unsound money. The alliance spells trouble for the ideal of sound money. At least in some political jurisdictions the authorities would have responded to popular demand for an escape from the inflating dollar by permitting a growth in the private monetary role for gold. Accordingly, banks and non-bank financial institutions would have gained regulatory consent to create deposits or other types of liability in gold usable directly for transaction purposes.
Offsetting balances of these financial institutions could be cleared directly through a gold clearing house by physical transfers of bullion. A new type of liability would have been virtual gold banknotes otherwise described as digital gold coins , constructed around new blockchain technology.
Increasing use of gold as a money at a private level could well have been a forerunner to gold having a resurrected role as a monetary standard in the aftermath of the surge in consumer prices. This would have set the stage for the building of a monetary order in which monetary base would be pivot, consistent with interest rates being wholly market determined and free of official pegging or manipulation.
Instead, crypto mania has fanned a regulatory clampdown — which paradoxically has almost totally bypassed crypto whilst inhibiting all other forms of novel monetary competition for deeply rotten fiat money. They were ostensibly concerned by all the ways this could be used by bad actors or lead to the small guy being misled. The main non-bank issuer of virtual dollar coins more broadly described as stablecoin — Tether - is reportedly in the sight of a regulatory attack, perhaps for the good reason that these are advertised as perfectly safe though they do not seem to be backed per cent by cash and say Treasury Bills.
Strangely however Bitcoin and more broadly crypto has avoided any crackdown outside China. This is despite huge questions about the extent and nature of bad actors using these — whether state entities in Iran, North Korea, and more broadly, cyber ransom merchants, Russian and other mafias and so on.
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