One Of The Oddest Things Heard All Year - Who's on Paradigm?

Commentary by Roger Erickson

This beats pie in the face ... by some clown who can't attract a suit.

S&P says 'retaliation' is behind US fraud suit

'Standard & Poor's said Tuesday that the U.S. government filed a $5 billion fraud lawsuit against it in “retaliation” for its 2011 decision to strip the country of its “AAA” credit rating.'

No one cared. It had no effect, and was the dumbest thing said since Who's on First ... so Uncle Sam was furious? And is retaliating?

Maybe it's just a fine for excessive crowing about ignorance? Eric Holder doesn't like competition. Neither did Timmy Geithner.

Is this what the in-house management meeting sounded like?

Who's on paradigm? 

Not these clowns, they don't rate.

But they're a rating agency. 

Not worth a pair of dimes.

  ?? So who's on paradigm? 

Not these clowns  ... 

Wait a minute! Is this retail? 

No, they're on hold. 

Who's on hold? 

The paradigm. 

Pfffffgbttth!!!  Let's start again.
No, let's not. Get a defense lawyer.

But they're in denial!
Look, can we get back on paradigm?

That's what I'm asking!!! Who's on paradigm.

Not these clowns ... 

Ashwin Parameswaran — Unifying The Fiscal And Monetary Functions: A Policy Proposal

With the emergence of interest-bearing money, the concept of ‘money supply’ is now meaningless. Theobsolescence of interest-free money is not just a consequence of payment of interest on reserves by the Fed (as Steve Waldman argues). If short-tenor government bonds are liquid enough, then no one needs to hold non interest-bearing deposits for any meaningful length of time. For example, let us assume that rates are at 6%, the Fed has sold off all its QE holdings and is no longer paying interest on reserves. Therefore, bank deposits yield no interest. In such a scenario, most individuals can put most of their risk-free investments into an ETF or index fund invested in T-bills that pays say 5.80% (with 20 bps fees). In a world of such liquid risk-free investments, there is simply no need to hold cash except immediately before the need to make a payment arises.

Macroeconomic Resilience — towards a more resilient macroeconomy
Unifying The Fiscal And Monetary Functions: A Policy Proposal

Ashwin Parameswaran

This proposal is along the lines of outline I've suggested of separating "retail" banking from commercial banking and having government take over retail since the public is already on the hook. Ashwin Parameswaran is a former banker and knows a lot more about how to do this than I do. His proposal is definitely worthy of consideration.