tag:blogger.com,1999:blog-1892824566694270102.post5191415092732975089..comments2024-01-27T00:46:34.345-08:00Comments on How Fiat Dies: How the US Dollar Will Fail?Vincent Catehttp://www.blogger.com/profile/06502618776820144289noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-1892824566694270102.post-13797037455689867362014-01-01T11:53:47.508-08:002014-01-01T11:53:47.508-08:00I have a new post up addressing why there will be ...I have a new post up addressing why there will be inflation. See it at:<br />http://howfiatdies.blogspot.com/2014/01/how-we-know-inflation-is-coming.htmlVincent Catehttps://www.blogger.com/profile/06502618776820144289noreply@blogger.comtag:blogger.com,1999:blog-1892824566694270102.post-35699171884039961472013-12-30T22:20:17.579-08:002013-12-30T22:20:17.579-08:00I don't think you understand monetary policy w...I don't think you understand monetary policy well enough, so far the inflationistas have been wrong for an extended period of time, particularly those owning gold the last 18 months.<br /><br />The question should be: what did you misunderstand about monetary policy and inflation? <br /><br />1) inflationistas didn't account for the credit overhang - which ensured the new money entering the system would go straight back out through the existing credit channels and keeping the money multiplier low.<br /><br />2) if you can consider how much the velocity of money slowed down since the financial crisis, you will realise with some simple arithmetic that the addition to base money via printing (about 9%) vis a vis the contraction in velocity on the rest, gives you a smaller result. Hence, disinflation.<br /><br />3) finally, QE is just a credit and debit on the fed's balance sheet - an asset swap if you will - of non-interest bearing cash, for interest bearing bonds... Certainly not helicopters from the sky! <br /><br />4) If you are a republican voting American, you must avoid falling into the old hyperinflationist meme, it is so deeply associated with your politics, most people do not realise and stems back to political/philosophical arguments against Lenin and Marx, when the left was much more politically left. Prometheusnoreply@blogger.comtag:blogger.com,1999:blog-1892824566694270102.post-11905057715440163872013-12-23T10:15:29.630-08:002013-12-23T10:15:29.630-08:00If Market Monetarists like Scott Sumner are right,...If Market Monetarists like Scott Sumner are right, then if "lever pulling" amounts to setting interest rates or even adjusting the base money supply, then those efforts (levers) are "lousy" as a communications strategy, and communications is really the best tool the central bank has:<br /><br />http://www.themoneyillusion.com/?p=25642#comments<br />Tom Brownhttps://www.blogger.com/profile/17654184190478330946noreply@blogger.comtag:blogger.com,1999:blog-1892824566694270102.post-63428654617544222012013-12-13T07:17:17.916-08:002013-12-13T07:17:17.916-08:00Many years ago when Alan Greenspan was at the cont...Many years ago when Alan Greenspan was at the controls, (my nickname for him is appropriately "Green-Spin"), I likened him to my 12-month old son sitting at his Playschool workbench, turning pretend knobs and drooling all over the place. I think that pretty much sums up the effectiveness of Fed lever pulling.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1892824566694270102.post-42721011195796770312013-12-13T04:41:21.583-08:002013-12-13T04:41:21.583-08:00The policymakers at the Fed think they are dialing...The policymakers at the Fed think they are dialing a thermostat up and down, but they're actually playing with a nuclear reactor. A runaway chain reaction can melt the whole thing down. Paraphrase of Jim Rickards, Currency Wars.Vincent Catehttps://www.blogger.com/profile/06502618776820144289noreply@blogger.comtag:blogger.com,1999:blog-1892824566694270102.post-11947268647192042982013-12-12T18:29:50.682-08:002013-12-12T18:29:50.682-08:00Agreed - seems to be a calculated, lever-pulling e...Agreed - seems to be a calculated, lever-pulling effort to stoke the fires of inflation? Are chance the banks will hoard it themselves as collateral?Warren Jameshttps://www.blogger.com/profile/00631403827559820571noreply@blogger.comtag:blogger.com,1999:blog-1892824566694270102.post-35734434907547230982013-12-12T16:07:26.721-08:002013-12-12T16:07:26.721-08:00That's precisely what Scott Sumner an the othe...That's precisely what Scott Sumner an the other Market Monetarists would like to see happen (for the Fed to lower the IOR rate) to help get NGDP back on track.<br /><br />Maybe they're right. :DTom Brownhttps://www.blogger.com/profile/17654184190478330946noreply@blogger.com