Tim Duy — A Trap of My Own Making

Steve Waldman at interfluidity catches me in a trap of my own making.

Tim Duy's Fed Watch
A Trap of My Own Making
Tim Duy

See the comment I left there as tjfxh.

Steve Randy Waldman — There’s no such thing as base money anymore

I’ve no grand ideological point to make here. But I think a lot of debate and commentary on monetary issues hasn’t caught up with the fact that we have permanently entered a brave new world in which there is no opportunity cost to holding money rather than safe short-term debt, whether we are at the zero bound or not.

Interfluidity
There’s no such thing as base money anymore
Steve Randy Waldman

That is a grand ideological point, and the bankers don't want it drawn for fear it will undercut the rationale for the interest subsidy.

Tim Duy on the real reason TPC option was killed in the crib

Apparently fiscal and monetary cooperation is alive and well - the US Treasury and the Federal Reserve conspired to kill the platnium coin idea. In retrospect, we should have seen this coming. As the debate continued, it became increasingly evident that the platinum coin threatened the conventional wisdom in very deep and profound ways. It was a threat that could not be endured by Washington.

This realization hit me this morning, working on my last piece. Begin with the effectiveness of monetary policy at the zero bound. Or, more accurately, the lack of effectiveness as the Federal Reserve is swapping one zero-interest asset for another. Rarely do we take this to its logical conclusion for fiscal policy: If there is no difference between cash and Treasury bonds, why should we issue bonds at all? Why not simply issue cash? In other words, at the zero bound, what is the argument against monetizing deficit spending?

Tim Duy's Fed Watch
On The Disruptiveness of the Platinum Coin
Tim Duy

Hitting too close to home. TPTB had to step in and end it. Definitely read this one in its entirety.

John Lounsbury — The Terrifying Danger of the Trillion Dollar Coin

Excellent post by John Lounsbury shows the real implication of TPC, the option of government self-financing and the consequent ending of the public subsidy to finance in the form of operationally unnecessary interest payments on consolidated non-government saving of net financial assets in aggregate and with it ending the so-called government intertemporal budget constraint.

Global Economic Intersection
The Terrifying Danger of the Trillion Dollar Coin: No One is Talking about the Bottom Line with the Platinum Coin
John Lounsbury | Managing Editor and Co-founder of Global Economic Intersection