Report
Patrick Artus

In search of a "reasonable" money supply process

Economic agents want to hold a currency for which the supply process is "reasonable", which is difficult nowadays: The money supply of the "official" currencies (dollar, euro, yen, etc.) has abnormally and dangerously increased due to the highly expansionary monetary policies, which is undermining confidence in these currencies; The money supply of gold and cryptocurrencies is exogenous, which is not managed; this leads to excessive variability in the prices of these currencies that discourages savers from holding them ; So there is a need to create a currency for which the supply is managed "intelligently": no excessive growth, a quantity supplied that partially offsets the changes in demand for this currency in order to limit the variability of its price (exchange rate). This obviously means that there will be a need for discretionary interventions in the money supply in order to stabilise the currency’s price (exchange rate) , which may be a concern . The libra will perhaps have these efficient characteristics.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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