Some of us are capable of succinctly demonstrating an error.
Well okay.
If you eventually manage to find an error in one of my posts, feel free to succinctly demonstrate it.
But I mean a real error, not some bullshit you misinterpret and falsely attribute to me like you did in Post 133.
How so?
You say the government forces people to use 1 currency, but people are free to use other (crypto) currencies.
Ahh, I see.
Well, we’ll see if that “freedom” lasts.
It’s already been compromised. If the dollar depreciates against bitcoin or gold, the holder must pay capital gains. Make no mistake, alternatives to the Fed paper are compromised for a reason.
Yeah, after the New World Order intervened to make the Fed prohibit credit cards in 1972, the Bilderbergers will stop at nothing to crush any attempt to undermine Federal reserve notes.
No. The government confiscated gold to limit competition. Today they tax alternate currencies and throw people like Ross Ulbricht in prison for life for running a website. They also jailed a guy for coining gold a few years ago if I remember right.
When you try to lampoon a point of view, it’s probably best to up the ante on the hyperbole.
Any political claim can be lampooned in a lame way. For example, replace any of Obama’s or Romney’s boogeymen with “Bilderberger” or “New World Order”. Same effect.
Um, no.
You have your “facts,” I have mine.
If the government adopted the gold standard and gold depreciated against bitcoin, you’d still have to pay taxes on those gains…
Yes, but the gold market can fluctuate wildly now, by a few billionaires clicking a couple buttons.
It’s not the dollar depreciating against bitcoin or gold, it’s the wild fluctuations caused by investing in them.
He was convicted of money laundering, computer hacking, and conspiracy to traffic narcotics.
Yeah, running a website. That’s literally all that Ross Ulbricht did. Just running a plan ol’ website with photos of his cat or something. And boom life in prison.
Well, that’s what the Germans say, in public at least.
The problem right now is that Greece does not have its own central bank at this time. Hard money, like gold or Euros, isn’t just a measurement like inches or centimeters. It can flow away and be very hard to retrieve. It’s hard to pay debts when you have to borrow at interest the credit to pay the debts.
As for your obnoxious insistence that I’m trying to control society by banning gold, I’m really not. I’m in favor of private citizens to be able to issue their own currencies, backed by gold or silver or pounds of flax if they want; but I also know they can’t typically compete. It’s consistent with that that I’m in favor of nation-states being able to issue their own currencies, including fiat currencies, so they can keep their local economies liquid and functional.
Yes it is “hard to retrieve” money when you can’t print money that anyone will accept. You actually need to do crazy stuff like produce goods and services. This is novel to nobody operating in society today.
“Every” non-Keynesian economist?
Here’s Edward Prescott, New Classical economist, most emphatically not a Keynesian.
He won a trip to Sweden in 2006 saying stuff like this, for reasons that I still have trouble understanding.
Here’s John Cochrane, describing a Neo-Fisherian result:
The Neo-Fisherians believe that inflation has been very low since 2008, because interest rates have been low. They think that inflation would increase if the Fed increased interest rates. The standard joke about the Neo-Fisherians is they also recommend that everyone leave their umbrellas at home, because it rains when people take their umbrella with them. They’re not Keynesians either.
Or how many monetarist economists do I need to cite here? They point out the demand-based nature of recessions, like the Keynesians so I guess you can call them Keynesian-adjacent, but they don’t have exactly the same policy prescriptions. I’m a flavor of monetarist myself, and I don’t agree with your analysis.
You seem to be implying a non-Keynesian consensus that I do not believe exists.
267x?
This is the OECD estimate of the M3 stock of money since 2008. The US monetary base is about 4 times as big as it was in 2008, yet the M3 as estimated by the OECD is only about two times bigger than it was, not “267x”. I don’t know where you’re getting the “average reserve ratio” or why you think it’s relevant. You’re citing the M3 here, which also includes repo, but repo is collateralized borrowing, not exclusively deposit-based borrowing with a legal reserve requirement. You have to post assets to borrow any cash on the repo markets, which makes it more stringent in a certain sense, than deposit-based reserve-requirement borrowing that applies to commercial banks.
This is the Federal Reserve’s own calculation of the M2 stock of money. It’s also about two times bigger than it was. This is the Federal Reserve’s calculation of the M1 stock of money. The first derivative increased in 2008, but it’s only about 3 times bigger than it was. It’s worth pointing out that the M1 money multiplier (M1/MB) was about 1.6 in 2008, when it took a precipitous drop as the base was quickly expanded (the base being the denominator of that definition). The M1 multiplier only recently got back above 1.0. It’s still not close to 1.6 where it was in 2008. Reserve requirements, to the extent they exist for certain deposit accounts, are not binding.
The broader money stock, from “fractional reserve banking”, is simply not showing the explosive growth you are asserting here. Money is not being “multiplied” in a “massive” fashion right now.
Quick and Dirty Definitions
M1: currency in circulation + checkable deposits.
M2: currency in circulation + checking + savings + small term-depots.
M3: currency in circulation + checking + savings + small term-depots + large term-deposits + repo.
The Fed stopped calculating the M3 itself. When they used to keep their own M3 time series, they included eurodollar accounts along with repo, which the OECD does not.
As I understand it the fed effectively credits the private banks with a credit to their Fed account in exchange for the securities. This is how they create money out of thin air.
As long as the securities maintain their value, there is no problem. If not then the fed owes more money to its constituents than it has and the fed has to be bailed out, probably with inflationary money. It was a big risk but the alternatives were pretty grim.
Prior to the 2008 crisis, the money supply seemed to head slowly and steadily up and AFAICT money supply is supposed to increase with the size of the economy.
Then, we had the worst financial crisis since the great depression. They dropped interests rates as low as they could but it was not enough to address the financial crisis so they started buying assets to inject liquidity into the system. It worked and we are not living in Mad Max world. They have since started to raise the fed rate and sell off some of those assets and it’s not like they are done, they can still reverse all of it given time.
I am not sure why because I would have thought that the selling off of the assets would naturally raise interest rates. Eventually we will either sell the assets or they will mature. Either way, the money is taken back into the Fed who can then use it to back up the IOUs.
In any event, right now the problem seems to be in the deficit and debt rather than quantitative easing.
An expansion of 300% only needs a reduction of 75% to reverse itself. right?
Average homes these days have about twice as many square feet as homes built in the 1960’s. And AFAICT, they are upgraded in almost every way from the 1960s.
A 3% inflation rate over 30 years is about 580%.
You mean Alan Greenspan, right? Alan Greenspan oversaw the dot com recovery. The toxic securities started getting issued while Greenspan was still chairman of the fed.
You don’t want to get into the financial crisis but you declare that it was a fed driven bubble? Is it possible that the prohibition against regulating those securities had something to do with it?