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CURRENCY_EVENTS

                                          June 26, 2006

We speak often of 
Jane Jacobs first work.        THE_GREAT_CITY 

This is a line of argument 
from another one:                        
                 
  "The Economy of Cities" (1969)
                        
Here she makes the case that:
                        
  (1) The natural unit of economic activity
      is not the nation, but the city.

  (2) Currencies act as information transmission
      mediums, sending signals about when to
      increase production or when to retrench.

She argues that the end result of having national
currencies is that large cities tend to get even
bigger, and smaller ones tend to stay small.

The idea is that the biggest city dominates what's
going on with the currency, so it receives signals
that are more or less correct for it's own conditions.

The other cities, however, receive the wrong signals,
so their economies are always oddly faltering.  They
never get a chance to really thrive.


This line or argument seems simple, and persuasive --
as is so often the case with Jane Jacobs, you wonder
why you haven't heard it from somewhere else.

                               Perhaps there's some           
                               counter-argument that's obvious
                               to currency experts, but not to
                               the rest to us.                
                                                              
If this is correct,               Since the issue is never    
there are some                    discussed publicly it's     
obvious conclusions               difficult to say.           
that apply to the   
present state of the
world:                 
                    
  (1) The Euro may turn out to be a very bad idea.
  Fifty years hence, Berlin will be hugely successful,
  but the rest of Europe will be stumbling.  It will
  be hard to believe that Germany lost the two world
  wars.

  (2) The United States may need more than one medium
  of exchange... it could be that the New York
  tri-state area has been dominating the exchange
  rate, making it difficult for any other region to
  get started.

  And perhaps in recent decades, Silicon Valley has 
  been subtly interfering with other regions attempts        
  at imitating it's success? 

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