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The global stock markets are strongly up today on the latest news from the EU on the deal on Greek debt (and little bit less…). There is no reason to spend a lot of time describing the deal here, but I nonetheless feel it might be a good day to tell a bit about something else – the so-called Hoover Moratorium of 1931.
Recently I have been giving quite a bit attention to the writings Gustav Cassel (and I plan more...), but I have failed to give any attention to the great British monetary economist Raplh G. Hawtrey. That is not really fair - Hawtrey and Cassel lived more or less at the same time and both played important roles in the debate and formulation of monetary policy and monetary thinking around the world in 1920s and 1930s.
I have always found it fascinating how much information the internet is providing "real time" and I believe that a lot of economic data can and should be "extracted" from data on internet activity. A good example is the development in google searches on the European debt crisis. Here Google Trends is an excellent tool.
As we minute by minute are inching closer to the announcement of some form of restructuring/write-down of Greek Sovereign debt nervous investors focus on the risk of contagion from the Greek crisis to other European economies and contagion in the European banking sector.
I have asked Alex Salter to give his perspective on the ongoing debate about "Central banking is (not) central planning" in the blogosphere.
The year is 1931. US president Hoover on June 20 announces the so-called Hoover Moratorium. Hoover's proposition was to put a one-year moratorium on payments of World War I and other war debt, postponing the initial payments, as well as interest. This obvious is especially a relief to Germany and Austria. The proposal outrages a lot of people and especially the France government is highly upset by the proposal.