Monday, August 24, 2009

Money 2

Moral: Wherein we go on now from the first look at money. What we did there was review earlier posts, one of which looked at definitional work by von Mises.


We talked about fiat currency several times in prior posts. von Mises (and the Vienna School, love the use of undecidable) had opinions about this, too, that we ought to consider, as did other, of course.

One thing to consider is how the fiat situation (as does the theme described by Minsky's) exacerbates bubbles and inflation. Just look at this chart of inflation up to 2004. Notice that after 1950, there have been no deflationary periods, that is, 49 years without going below the line. Is that natural? Do we know how to run the economy (or do the past couple of years show this)?

Without stable money, what is there to establish the proper basis? Theoretics (ah, like Ben? He who has no 'mea culpa' to offer despite blinking and being desperate.)? Quantifications (meaning, of course, that the Quants' insights and programming will be the savior)?

You know what? During that same time, of no deflation, the consumer got increasingly under a debt load, as did the US economy as a whole (hello, China). There is a definite correlation to be looked at further.

Have you noticed that, of late, the emphasis is on credit (not its natural consequence which is debt)? Yes, some change of perception has taken hold. We need to look at this, folks, and tackle this beast now.

We are mortgaging future generations for no good reason other than mental laziness. Politicos who salivate when a buck is passed underneath their noses are no help either.


12/06/2013 -- If only Ben would put a shot across the bow. He's helped the chimera unfold in unhealthy ways. He could, at least, say a mea culpa.

03/17/2011 -- On the rise of the professional politician (will there ever be the citizen polico? that is, those who do not salivate when a buck is passed beneath the nose) toward robber barony. The M & Ms are apropos. As well, need to bring in Schervish's viewpoint.

11/02/2010 -- Over a year later, the message is the same, except some changes have occurred. But Big Ben continues in his ways. Of real note is that the jobless rate is high; out-housing really set up for that. Also, we need to re-look at that learned from the 'vons' guys, Ludwig and Friedrich. See Near Zero.

12/15/2009 -- Requiem for the dollar (WSJ) and responses.

09/09/09 -- We'll need to look at UUUN, as a framework.

08/24/2009 -- Liquidity trap is the operative concept. Various 'helicopter money' schemes have been tried but have they gone mostly to the fat cats?

Also, we have seen the CPI fall in the past 12 months. How low can this go?

Modified: 12/06/2013

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