Anyone sufficiently curious about this may generate the numbers by extracting at least two foreign exchange charts from the micro-film of the Globe & Mail (available at some public libraries) preferably for dates at least five years apart. The essence of the program of calculation is to convert the values to Swiss Francs and then calculate the annual rate of change. Then massage the numbers once again to allow for Swiss inflation. I merely added 2.5 per cent for Dec. 31 1975 to Dec. 31, 1980.
I
will be happy to share the calculation programs, such as they are, for my ZX81
with anyone who forwards a SASE, and I would be interested to know whether
anyone else can arrive at the same rates of change that I did for Dec.31,75 to
Dec.31,80. I have found it helpful to concoct a sort of utopian currency with a
zero rate of change to facilitate calculation. While it is my own opinion that central bankers unwittingly determineboth the future course of the inflation rate and the currency when they set in place the national interest rate. I can readily appreciate that a correlation between A or B or C does not necessarily establish cause and effect, rule out the possibility of an outside influence D, or a combination thereof et cetera and on into the night.
I can direct your attention to other facts and observations in the press. Central banks proclaim their central borrowing rate of interest at any level they wish as long as they stand prepared to allow whatever demands for credit arise to be satisfied. Is our central bank our only central bank? Where did 25-year mortgages once upon a time originate? are attempts to peg exchange rates at one place while inflation proceeds at some rate doomed at the start? Does it matter that you have invested at 2% in Switzerland, 60% in Mexico or 150% in Argentiana, if eventually currency erosion of 2%,60 per cent and 150 per cent respectively equalize the three investments?
If the two problems of interest rates and inflation rates are solved, and currency fluctuations are explained as a bonus, then what?
Employment may be shown to be merely a function of fiscal policy and population growth. In maintaining an automobile at 100 Km/h on a highway, one depresses and releases the accelorator with continuous minor adjustments; likewise the process of continuously adjusting government spending and taxation to produce optimum employment levels.
Now, I am busy calculating whether we could assimilate all the Chinese in China as well as the population of South America (south of the equator), reenact both WWI, WWII and the Spanish conquest of Central America (using stand-ins for the original cast} while simultaneously colonizing Mars, keeping all our women working and double track the Port Burwell, Tillsonburg and Pacific by 1995.
Does inflation merely settle where central bankers place interest rates?
This item by George Noviss was included in MC2 (Mensa Canada Communications) May 1983.
