ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Wishful Thinking by Wilson

The persistent pressure on the sterling and the continued outflow of gold from the US—it lost $116 million worth of monetary gold in July this year, the largest monthly loss in more than a year—keep alive discussion of international liquidity. Despite Harold Wilson's ''bold bid" with internal policies and, what is more to the point, the efforts of European central bankers under the auspices of the Bank of International Settlements, sterling is far from being out of the woods

The persistent pressure on the sterling and the continued outflow of gold from the US—it lost $116 million worth of monetary gold in July this year, the largest monthly loss in more than a year—keep alive discussion of international liquidity. Despite Harold Wilson's ''bold bid" with internal policies and, what is more to the point, the efforts of European central bankers under the auspices of the Bank of International Settlements, sterling is far from being out of the woods. The socalled Group of Ten*, which has been examining the question of international monetary reform, however, has not apparently allowed all this to influence overmuch the leisurely pace of its deliberations.

The communique issued by the Group at the end of its Hague meeting last month makes curious reading. Official studies of the problem of international liquidity are now entering their fourth year, but the Group of Ten still contents itself with general statements of elementary truths: that the various countries are vitally interested in the question of adequacy of international reserves, that gold alone is unlikely to yield sufficient additions to monetary reserves, that as and when additional reserves are created they should be distributed among all members of the International Monetary Fund on the basis of some "objective criterion". The idea of a contingency plan, pending fullfledged and universally acceptable reform, has been rejected by France which also continues to insist that the US and the UK correct their balance of payments before the question of augmenting international liquidity is taken up.

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