Who would have expected extreme thinking from central bankers? That is the theme of some coverage in the financial press over the past few weeks. For example, the Financial Times takes note that “a growing chorus of economists is saying central banks should take more radical steps, including buying assets other than government bonds.”
Some, if not all, of these steps are not so radical from a broad historical perspective. Following the recent bankers’ brainstorming session in Jackson Hole, Wyoming, Fed Chairman Ben Bernanke was said to be pondering various possibilities including (1) QE (quantitative easing) 3, (2) a lowering of the interest rate paid on banks’ reserve accounts at the Fed, (3) an extension until 2015 of the Fed’s low-interest-rate precommitment, and perhaps in the longer term, (4) adopting nominal GDP targeting, as endorsed, for example, by George Soros in a recent opinion piece on the eurozone and Germany in particular.
Today, the Fed announced that it would adopt options (1) and (3), purchasing $40 billion in mortgage-backed debt each month for an indefinite period and predicting that the federal funds rate would remain near zero through mid-2015 (news article).Multiplier Effect
Again, Unconventional Win Out
Greg Hannsgen
fucking central bankers can print as much money as they want to buy assets from the 1%, whilst government is shackled by imaginary "debt". Whoever designed this sick system was pretty clever.
ReplyDeleteOT: This is pretty interesting. Discusses "Babylonian" mode of thinking: On the importance of economic methodology
ReplyDeleteThat is right - back door MMT printing for the rich and stick it to the poor with austerity after the 99% are told that budgets have to balanced.
ReplyDeleteMerkle says that multiculturalism is a failed venture in Europe - and then the Norwegian wacko kills 100 kids on a island.
Palin puts an Austerity target on Gifford, and then some wacko in Arizona shoots her.
Cameron of UK puts out an Austerity target on the poor in UK, and then riots erupt all over.
But the Germans shelled out 600 billion EUROs in 2008/2009 without any legal matters while their economic minister proclaims USA egages in "krass keynesianism"
Even take Paul Krugman's column today about the iPhone economic bump. He says all the money is made over here not in China when putting these evidently cheaply made widgets togther:
"Second, it noted that although iPhones are manufactured overseas, most of the price you pay when you buy one is domestic value-added — retailing and wholesaling, advertising and profits — all of which counts as part of G.D.P. Finally, it took some plausible guesses about the price of each phone and the number of phones sold, and used those guesses to make an estimate of the impact on G.D.P. "
He doesn't mention that the phones are made with U$D not Yuan, transported by U$D, sold in U$D and then piggy banked by the 1% in U$D.
The stimulus will come if we can count on China, Japan, UK, OPEC, India, and all other U$D piggy bankers to open up their accounts and spend the dollar anywhere in the world since it will hit the currency zone it was born in - the USA.
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ReplyDeleteMatt, Babylonia was a region of Mesopotamia (area between Tigris and Euphrates, now Iraq) that was dominated by Sumerian language and culture, later combined with Akkadian. LIttle is known for sure about the origin of Sumerian, or its demise. See "The Life and Death of the Sumerian Language in Comparative Perspective" by Piotr Michalowski. However, Sumerian culture was a dominant one at one time and still lives through the influences that it bequeathed.
ReplyDeleteAbraham was from Ur in the south, near the sea, and latter moved to Haran in the north before migrating to Canaan. Abraham is impossible to date. Most scholars surmise c. 2nd millennium BCE. He probably spoke Sumerian-Akkadian, which is not a Semitic language, while Hebrew and Arabic are. Semitic is Afro-Asiatic in origin. Abraham is clearly a pivotal character in history, and would be even if he were simply legendary, which I don't think was the case, even though the Abraham is a "mythic" character, like Zarathustra, Rama, Krishna, Buddha, Jesus, and Muhammad, in that their stories shaped civilizations.
The advent of Abraham marks a sharp break in the West with the past numinous, polytheistic, and imaginative cultures. Abrahamic religion and the cultures that developed under its influence are personal, (fiercely) monotheistic, and historical. From this would develop ways of relating to the world that were quite different from what had been the case previously, although Zarathustra had been a precursor. BTW the West has a rather distorted view of Zarathustra and his teaching, which is confused with later Magian culture.
Ancient ways of thinking were in many ways more flexible than modern thinking, which has become less artistic (expressive, qualitative, synthetic and continuous) and more scientific (conceptual, quantitative, analytic, and discrete).
Each has its own power, and individuals and societies who learns to use both will be much more powerful and those that don't. Those that do integrate reason and passion. Those that don't isolate them and value one over the other in the tug of war between rationalism v. romanticism, fact v. value, positive v. normative, descriptive v. prescriptive, etc. One sees opposites as complementary, and the other views them as contradictory and conflicting. One takes a dialectical approach and the other a categorical one.
Sumerian civilization is one of the most ancient that we know much about and Sumerian is one of oldest known recorded written languages, using cuneiform pictographs. Hebrew uses an alphabetic language possibly Phoenician in origin.
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ReplyDeleteThe point of this is that there was a vast difference in the language and culture of Babylonia and Hebraic culture and language, as well as that of civilized Europe after the Roman conquest and introduction of Christianity. The language and culture of Asia Minor and Greece developed from proto-Indian-Iranian sources, and this was combined with the civilization of Abraham in the West as it rose in power and culture.
Language and culture are the basis for thought and context. Thus, the major civilizations are still alive in the languages and cultures that they spawned.
Most ancient people were polytheistic animists, with religions based on their experience of the numinous manifesting in the great natural powers and their different manifestations in natural things and events and living beings. All of this was seen as integrated into a numinous wholeness, which the Sioux call Wakan Tanka, roughly translated as the Great Spirit. Wakan signifies numinous power that is personal and impersonal. Anthropologists take this as a fair approximation of Late Stone Age people's cultural foundation of integrative explanation and what we know now call "worship."
So-called primitive though is remarkably similar in spite of linguistic and cultural in that most early people had somewhat similar mythologies to explain changing phenomena in terms of forces operating within a whole.
Through the development of historical periods, cultures manifested different developmental paths, staying closer to or moving further from the primitive, but all maintaining some connections to it.
These are different ways of thinking and they manifest themselves in different methodological approaches in various field.
For example, the traditional approach to medicine of China and India are now being integrated with modern Western medicine to produce a more powerful integrated approach. The traditional approach is ground in the ancient functional way of thinking and the modern scientific approach in the structural way of thinking. They are different and complementary.
nice mini-essay, Tom.
ReplyDeleteIt'd be even better if you'd replace "primitive" with "integrative."
All current cultures are crude, ongoing attempts to scale up exquisitely tuned tribal methods beyond the population sizes they were developed for. We're still adjusting.
Along the way, we've been so overwhelmed by the rate of change that we actually think that "it's different this time." It's not, of course, although the scale our activities is unprecedented.
We'll get back to a flexible, agile, integrative approach, but only after more practice at whatever population levels we maintain once the recent population growth rates slow.