Understanding The Modern Monetary System...
Freigeld – Wikipedia, the free encyclopedia
Yes, yes, yes. I’ve spent a hundred hours thinking abou this. And now I have a name for it. Money decays in value less than anything else.
The Republican Party believes that women are trying to defraud the government. – Slate Magazine
FT Alphaville » The era of the ‘negative money multiplier’ – Part 1
I should call this Money and money-like assets, Part III. This is great stuff for repo nerds. Part II is the link below.
FT Alphaville » The era of the ‘negative money multiplier’ – Part 2
Another Debt Ceiling Crisis Would Be Even More Terrifying Than The Last One – Business Insider
Who was talking about this a month ago? Monetary Realism! We’re glad to break tomorrow’s news today. Expect the Trillion Dollar Coin to be on the cover of Newsweek come August…
FT Alphaville » Why China’s RMB exodus IS the story
Clinton: Republicans too Scared to Compromise
Posted from Diigo. The rest of my favorite links are here.
“Yes, yes, yes. I’ve spent a hundred hours thinking about this. And now I have a name for it. Money decays in value less than anything else.”
except for land. )
Unless you bought in 2007…
Except some things actually appreciate in value as they are stored, at a rate in excess of the storage cost, don’t they?
And whether money appreciates or depreciates as it is stored, and to what degree, depends on monetary policies.
Very few real world objects do this at all. And even fewer of them could be used as a medium of exchange.
Agree on the medium of exchange part. But I think that’s the real issue, not the decay of value thing. Land, scotch and wine, art works, cars and furniture that are stored safely – there are lots of things that preserve their value fairly well, or increase in value, over time.
The value of money is simply the value of the things it can buy, which is a function of the productivity of the economy relative to the supply of money. If the economy suddenly lost its productive capacity or even went in reverse, then money would lose value as well. Thank God we don’t live in such a place.
“The value of money is simply the value of the things it can buy”
Which has always perplexed me about some of the hard money/strong currency types. Do they want a world where 100 dollars can buy everything? I suppose they do if they are the ones with the 100$. Isnt the end point of a super strong currency super cheap goods?
The value of the things we can buy with money and the general productivity of the economy does nothing in itself to explain the value of any particular form of money. A has an iPhone; B has 200 US dollars; C has 200 dollars of Monopoly money. B can buy the iPhone with his money and C can’t. Therein lies the greater value of the US dollars, and the reason why people seek to obtain US dollars more eagerly than they seek Monopoly money. The fact that one of the two kinds of money can make the purchase and the other can’t is a complex social fact, relating A, B and features of the society in which they live, Explaining the precise nature of that fact is the theoretical problem of the nature of money and the source of its value.
I’m amazed at all the complaining about how much value the dollar has lost, but completely ignore the fact that from 1981 into the early 2000′s, almost consistently, the government subsidized savers with something that never could have existed in any reasonable amount in a perfectly free market:
Real, risk-free return on their savings via T-Bills. No wonder gold collapsed during that period… it had to compete with a subsidized US dollar.
For some reason savers (or shall I say, Austrians) feel like they deserve ROI even when they take zero risk, and even when they get it they’ll STILL complain that they’re being assaulted by inflation.
Almost as interesting is their belief that the fed is forcing and has forced interest rates to incredibly artificially low levels for decades (and by logical conclusion has the ability to se the cost of treasury borrowing), yet somehow we’re in a disaster scenario where the cost of debt (which the fed is supposedly making far lower than the market would set it at) is going to get is into a death spiral.
Can’t have it both ways… either the fed controls rates or the market does. You can’t claim that the fed controls rates and is punishing savers (rewarding debtors, including the gov’t), and then claim that markets will send rates skyrocketing. Either the fed controls rates, and we don’t need to worry about debt in a traditional currency-user way, or the fed doesn’t control rates, and MARKETS are giving us NEGATIVE real yields on our debt, sending us a huge signal to take advantage of the wonderful prices at the moment. Of course, neither of those serve their philisophical narrative very well.
That, or some third option that either conveniently predicts the fed will lose its grip of interest rates for some vague, poorly analyzed reason, or (more likely) simply wanting to impress one’s viewpoint on both congress and the fed, simultaneously asking congress to spend less, and asking the fed to artificially raise the ROI on their savings, thinking that somehow a strong currency and high unemployment facilitates the efficient creation of wealth by the private sector.
“ome third option that either conveniently predicts the fed will lose its grip of interest rates for some vague, poorly analyzed reason”
This seems to be the majority opinion of the inflationistas. They realize that the Fed sets the FFR, which is the benchmark rate, and can influence the yield curve by buying tys along the curve (QE), but they think that the market can override the Fed on this and will at some point as inflation kicks in, and the Fed will have to follow the market or get left behind.
ummmmmm…… you guys haven’t posted anything since Monday. I’m worred. You guys didn’t sued or something I hope…
Cullens been posting at Prag Cap and Mike used to go days without posting at Traders Crucible so I think its just a matter of ideas coming in spurts.
Yeah, but I’m an addcit and I need my fix, mannnnn. I’m past jonesing and the shakes are setting in (blinks unnaturally quick).
We’ve got big things in the works. Major overload on a lot of different things (mostly with my actual job). More to come though.
Smiley Face Emoticon.
© Copyright 2011 My Domain · All Rights Reserved ·