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So are you saying that under MMT, the path to prosperity is unsustainable and prone to collapse absent regular new shots of fiat funny money into the system?
No Mr Roddis I am saying that if the CBs do large scale asset purchases the depository institutions have to offset the new reserve assets by shedding/retarding growth in other asset classes...
"Funny Money" Roddis will be disappointed to learn that in a perfectly functioning free market, market forces would automatically increase the amount of funny money.
That is, in a perfect market and given a recession, wages and prices would fall, which would increase the real value of each "money unit" (dollars in the US), which in turn would increase private sector net financial assets, which in turn would increase spending (i.e. aggregate demand). Whether the monetary base is gold or whether it comes in fiat form makes no difference: in both cases the value of private sector financial assets rises.
Of course the latter mechanism doesn't work too well in the real world because as soon as any employer tries to cut wages, one gets strikes, riots, etc. Or as Keynes said, "Wages are sticky downwards".
in a perfect market and given a recession, wages and prices would fall
In a “perfect market” there would be no artificial credit creation and thus no unsustainable price, investment and capital structure. There would be no recession where unsustainably high wages and prices would fall because there would be no unsustainable high wages and prices. There would be no artificially stimulated boom followed by the inevitable bust where an unsustainable boom price and wage structure collapses.
Keynesianism exists to solve the problem that does not exist. The problems that do exist are caused by Keynesianism and artificial credit expansion.
The busts happen because the CB doesn't coordinate with the depository institutions on capital requirements...
The busts happen because the government is run by Wall Street insiders who prohibit legislative regulation that would prevent massive greed and corruption from creating "profit opportunities" through continuous cycles of pump and dump with socialized losses and privatized profits.
12 comments:
The rough data is available weekly.
http://www.bankofengland.co.uk/publications/Pages/weeklyreport/default.aspx
Thx Neil, looks like up about 100B GBPs in the last 6 months.....
Hence rate of growth down over there again... same here in US...
Mr. Franko:
So are you saying that under MMT, the path to prosperity is unsustainable and prone to collapse absent regular new shots of fiat funny money into the system?
No Mr Roddis I am saying that if the CBs do large scale asset purchases the depository institutions have to offset the new reserve assets by shedding/retarding growth in other asset classes...
"Funny Money" Roddis will be disappointed to learn that in a perfectly functioning free market, market forces would automatically increase the amount of funny money.
That is, in a perfect market and given a recession, wages and prices would fall, which would increase the real value of each "money unit" (dollars in the US), which in turn would increase private sector net financial assets, which in turn would increase spending (i.e. aggregate demand). Whether the monetary base is gold or whether it comes in fiat form makes no difference: in both cases the value of private sector financial assets rises.
Of course the latter mechanism doesn't work too well in the real world because as soon as any employer tries to cut wages, one gets strikes, riots, etc. Or as Keynes said, "Wages are sticky downwards".
in a perfect market and given a recession, wages and prices would fall
In a “perfect market” there would be no artificial credit creation and thus no unsustainable price, investment and capital structure. There would be no recession where unsustainably high wages and prices would fall because there would be no unsustainable high wages and prices. There would be no artificially stimulated boom followed by the inevitable bust where an unsustainable boom price and wage structure collapses.
Keynesianism exists to solve the problem that does not exist. The problems that do exist are caused by Keynesianism and artificial credit expansion.
there would be no artificial credit creation
Are you assuming a bullion exchange system?
There is no Easter Bunny in Bob Roddis' world.
The busts happen because the CB doesn't coordinate with the depository institutions on capital requirements...
Watch what happens if Canada does QE in response to their current otherwise manageable issues...
'Keynesianism...expansion." Straw man argument...credit cycles have existed since like, forever, Mr. Funny.
The busts happen because the CB doesn't coordinate with the depository institutions on capital requirements...
The busts happen because the government is run by Wall Street insiders who prohibit legislative regulation that would prevent massive greed and corruption from creating "profit opportunities" through continuous cycles of pump and dump with socialized losses and privatized profits.
Matt Franko wrote: The busts happen because the CB doesn't coordinate with the depository institutions on capital requirements...
What about Steve Keen’s work on excessive “private” credit and debt? He is right? Is he wrong?
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