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You know, you would think after seeing those two graphs people would stop crying about the federal reserve causing inflation....
But no doubt they cant make any sense of those two graphs...
Or understand IS-LM
You know, you would think after seeing those two graphs people would stop crying about the federal reserve causing inflation....
But no doubt they cant make any sense of those two graphs...
Or understand IS-LM
The problem is that the Austrian School generally discounts the CPI (or PCE) as a valid measure of inflation and inists on restricting "inflation" to mean only changes in the money supply.
Yea pretty much. The monetary base tripled at the same time inflation decreased.
Its amazing, because no one outside of a presidential debate could still stand behind the strict views of Ron Paul. Its a sad state of our society, facts do not matter.
Yea pretty much. The monetary base tripled at the same time inflation decreased.
Its amazing, because no one outside of a presidential debate could still stand behind the strict views of Ron Paul. Its a sad state of our society, facts do not matter.
Actually, as a liberal you apparently don't know that inflation is a function of both money and velocity (P=MV). No one denies this, especially in the short term, especially Friedman, but most agree that in the long term velocity reverts to the mean and so inflation is always and everywhere a function of an inflated liberal money supply.
Too much fail.I guess he does call for an end to the fed. He would like to go back to the turn of the century when people like JP Morgan had to step in and save the economy and the government.
You know, you would think after seeing those two graphs people would stop crying about the federal reserve causing inflation....
But no doubt they cant make any sense of those two graphs...
Or understand IS-LM
The problem is that the Austrian School generally discounts the CPI (or PCE) as a valid measure of inflation and inists on restricting "inflation" to mean only changes in the money supply.
Wow.
Who cares about changes in the money supply if the price level remains the same?
I guess he does call for an end to the fed. He would like to go back to the turn of the century when people like JP Morgan had to step in and save the economy and the government.
Yea pretty much. The monetary base tripled at the same time inflation decreased.
Its amazing, because no one outside of a presidential debate could still stand behind the strict views of Ron Paul. Its a sad state of our society, facts do not matter.
Actually, as a liberal you apparently don't know that inflation is a function of both money and velocity (P=MV). No one denies this, especially in the short term, especially Friedman, but most agree that in the long term velocity reverts to the mean and so inflation is always and everywhere a function of an inflated liberal money supply.
Too much fail.I guess he does call for an end to the fed. He would like to go back to the turn of the century when people like JP Morgan had to step in and save the economy and the government.
Inflation and the price of gold was pretty stable (low) from 1776 until 1913 when the Privately Owned Federal Reserve was created. Since then we've had many bubbles and crashes in our Economy as the Fed has increased and shrunk the money supply at their own whim. The Fed has had only one partial audit in it's almost 100 year history as well.
The Fed is also (until recently) secretly loaning out trillions of dollars to foreign banks while getting back about 78 Billion of it in the last year. Simple math shows that at that rate it'll take about 200 years to pay it all back.
If you did any research at all you'd know that International Bankers (Like JP Morgan and Goldman Sachs) are behind the Feds' current effort to destroy the dollar and remove it from it's place as the World Reserve Currency.
The problem is that the Austrian School generally discounts the CPI (or PCE) as a valid measure of inflation and inists on restricting "inflation" to mean only changes in the money supply.
Wow.
Who cares about changes in the money supply if the price level remains the same?
I guess he does call for an end to the fed. He would like to go back to the turn of the century when people like JP Morgan had to step in and save the economy and the government.
This post has much fail.
First of all, price levels don't immediately change when money supply changes. The multiplier effect must first begin via bank loans. Banks for now have been very content with simply taking their excess reserves and investing them throughout the markets. If you look at commodities, things people need to survive, prices are anything but steady, much less low.
And the other fail in your post is the JP Morgan part. I suppose you're unaware of JP Morgan's primary role during the 2008 collapse, where they backstopped much of the failure in the financial marketplace. And if it's not Morgan taking on these roles, it's Goldman.
The question that the "there is no inflation" people need to ask themselves is, can the Fed exit 2 trillion dollars worth of asset positions efficiently enough to avoid massive inflation when the economy rebounds to the point that lending and borrowing increase pace?
History tells us no.
Wow, this is one hell of a rebuttal!Wow.
Who cares about changes in the money supply if the price level remains the same?
I guess he does call for an end to the fed. He would like to go back to the turn of the century when people like JP Morgan had to step in and save the economy and the government.
This post has much fail.
First of all, price levels don't immediately change when money supply changes. The multiplier effect must first begin via bank loans. Banks for now have been very content with simply taking their excess reserves and investing them throughout the markets. If you look at commodities, things people need to survive, prices are anything but steady, much less low.
And the other fail in your post is the JP Morgan part. I suppose you're unaware of JP Morgan's primary role during the 2008 collapse, where they backstopped much of the failure in the financial marketplace. And if it's not Morgan taking on these roles, it's Goldman.
And your fully aware that a lender of last resort is a necessary part of our financial system, right?
Again, history is not on the Fed's side.
Again, history is not on the Fed's side.
1) the Fed is new so there is very little history. This crisis was new for the Fed; so far they have done an incredible job. No one knows the outcome but it will for sure rewrite the rules of central banking.
2) the most important lesson so far is that base money does not necessarily cause inflation in any timely way and the system is too interdependent and so too vulnerable to a another similar collapse. Dodd Frank did not address this issue at all.
There's ample history of the Fed not exiting properly and bringing about price inflation.
What there isn't history of, is a Fed balance sheet of this size.
That should scare people, not encourage them.
Wow, this is one hell of a rebuttal!This post has much fail.
First of all, price levels don't immediately change when money supply changes. The multiplier effect must first begin via bank loans. Banks for now have been very content with simply taking their excess reserves and investing them throughout the markets. If you look at commodities, things people need to survive, prices are anything but steady, much less low.
And the other fail in your post is the JP Morgan part. I suppose you're unaware of JP Morgan's primary role during the 2008 collapse, where they backstopped much of the failure in the financial marketplace. And if it's not Morgan taking on these roles, it's Goldman.
And your fully aware that a lender of last resort is a necessary part of our financial system, right?
As far as the liquidity trap response, this answers nothing about the Fed exiting their asset positions once the economy starts to move again.
You do realize that if they don't get it just aboit perfect, there is extreme risk of those excess reserves spilling out into the economy creating potentially damaging price inflation, right? And if they miss the mark on it, they will be forced to make drastic rate hikes to extinguish money which just starts the deflationary spiral all over again.
A liquidity trap, regardless if there's really one or not, doesn't last forever. At some point, that monetary base is going to multiply. The only question is can the Fed keep it to a minimum so as not to allow inflation, but not stifle growth.
Again, history is not on the Fed's side.