Towards a New Bretton Woods?

Abstract

Beryl Sprinkel, the former United States Treasury Under-Secretary and now Chairman of the President’s Council of Economic Advisers, is a tough man who fought in the Second World War as a gunner in a tank regiment. During his time at the Treasury he used to arrive at his office each morning at eight o’clock and, as he was responsible for monetary affairs, he would instantly sit down at his office computer terminal and press a button on the keyboard. Immediately, the latest exchange rates for the dollar in terms of the Deutschemark, the Yen, the pound, etc. would flash up on the screen. In other finance ministries around the world Sprinkel’s counterparts would set to work straight away on the basis of identical information and decide whether to carry out purchases or sales of their currencies in order to even out exchange market fluctuations. Sprinkel, on the other hand, would most usually do nothing.