tag:blogger.com,1999:blog-6704573462403312459.post2279677175820005322..comments2024-03-18T11:14:41.367-04:00Comments on Moneyness: A lazy central banker's guide to escaping liquidity trapsJP Koninghttp://www.blogger.com/profile/02559687323828006535noreply@blogger.comBlogger42125tag:blogger.com,1999:blog-6704573462403312459.post-15587156746222705342016-02-29T06:41:20.612-05:002016-02-29T06:41:20.612-05:00I am a nobody in the pantheon of economists; howe...I am a nobody in the pantheon of economists; however, sometimes a nobody can see with a clarity unencumbered with baggage.<br /><br />Thus, given that (monetary) inflation is nothing but the legalised theft of capital and it is the current inability of the authorities to impose this theft (for the purpose of increasing velocity of flow) in a deflationary environment that is the problem, how about instituting a Law to legalise the theft of capital in a deflationary environment? <br /><br />We have seen this on a (forced) voluntary basis sometimes - it is called a "haircut". <br /><br />Cash, being identified by serial number would be subject to a "haircut" (based upon the time since it was first issued) every time it was used in a transaction; there would thus be no point in storing it to avoid negative interest rates. <br /><br />And the "haircut" is exactly equivalent with UOA's reduction in value in an inflationary environment; it is no more morally wrong than simple inflation.<br /><br />Problem solved?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-2917393431411142462015-02-23T12:40:15.208-05:002015-02-23T12:40:15.208-05:00Low interest rates are a symptom of tight monetary...Low interest rates are a symptom of tight monetary policy. To boost NGDP, our lazy central banker should hand out $5 trillion worth of $100 bills. NGDP rises, pulling interest rates higher, eliminating liquidity trap. <br /><br />Exactly why are you advocating the destruction of currency? Currency circulates in the nominal economy. Reserves only circulate among banks. Seems simplest to increase currency supply, not eliminate currency.<br /><br />More currency, not less. The goal is higher NGDP, not lower rates. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-60156675803810875412015-02-23T12:19:06.387-05:002015-02-23T12:19:06.387-05:00Nope, free markets would also have to evolve solut...Nope, free markets would also have to evolve solutions to the zero lower bound.<br /><br />http://jpkoning.blogspot.ca/2013/06/does-zero-lower-bound-exist-thanks-to.htmlJP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-43384453765075829572015-02-23T12:16:42.126-05:002015-02-23T12:16:42.126-05:00"So why doesn't he favor it now?"
N..."So why doesn't he favor it now?"<br /><br />No idea.<br /><br />"He seems to write as if NGDP targeting and negative rates (plus phasing out large notes) are mutually exclusive. But CB lite policies can surely be implemented in conjunction with an NGDP target." <br /><br />Agreed.<br /><br />"...but I still don't understand why. Sumner was bugging Krugman about negative rates before Kimball started blogging, so I don't see why he wouldn't join forces with Kimball on negative rates unless he changed his views." <br /><br />Another theory is that the market monetarist brand irrevocably hitched its cart to the monetarist obsession with the quantity of money. As a tool, interest rates "go mute," they like to say. Market monetarists associate interest rate policy with Keynesians. So it becomes an us vs them thing. Sort of silly. See for instance:<br /><br />"Mainstream economists and particularly New Keynesian economists place interest rates at the core of monetary policy. Furthermore, central banks mostly formulate monetary policy within an interest rates framework. Market Monetarists, as traditional monetarists, are highly critical of this approach to monetary policy and monetary analysis,which Nick Rowe has termed Neo Wicksellian analysis" <br /><br />from https://thefaintofheart.files.wordpress.com/2011/09/market-monetarism-13092011.pdf<br /><br />"Kimball's idea to completely eliminate paper money is DOA US (as you wrote, just eliminating the $100 would incur the public's wrath, imagine the shitstorm if the Fed went after all cash), and the crawling peg requires a UOA switch."<br /><br />In fairness, Kimball doesn't support an elimination of paper money, just a crawling peg. <br /><br />"I guess it's an ego thing."<br /><br />People get attached to the ideas they create. Also, we only see the blogosphere side of these debates, not the academic side or the view from within central banks. It could be different there.JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-82901755136450689252015-02-23T00:24:35.816-05:002015-02-23T00:24:35.816-05:00Right, I assumed it went without saying that Kimba...Right, I assumed it went without saying that Kimball endorses negative rates. I was referring to the other big-name monetary econ bloggers.<br /><br />Thanks for the link, but I agree with the comment you left there--I don't really get Sumner's point. As you outlined above, removing large denomination notes would impose a de facto negative rate on currency in the form of storage and handling costs. Does Scott disagree? It would also clear the way to charge penalty rates on excess reserves, a proposal which Scott himself vigorously endorsed in 2009. So why doesn't he favor it now?<br /><br />He seems to write as if NGDP targeting and negative rates (plus phasing out large notes) are mutually exclusive. But CB lite policies can surely be implemented in conjunction with an NGDP target. And as you point out, standard switching and price confusion aren't problems under CB lite.<br /><br /><i>since Miles started blogging I think Sumner probably retrenched to focus purely on NGDP targeting and the quantity of the base.</i><br /><br />Probably so, but I still don't understand why. Sumner was bugging Krugman about negative rates before Kimball started blogging, so I don't see why he wouldn't join forces with Kimball on negative rates unless he changed his views. <br /><br />I think your second strategy (closing the $100 window) is the most pragmatic compromise. Kimball's idea to completely eliminate paper money is DOA US (as you wrote, just eliminating the $100 would incur the public's wrath, imagine the shitstorm if the Fed went after all cash), and the crawling peg requires a UOA switch. <br /><br />But to be honest, I don't hold much hope that anyone will endorse your idea (even Kimball--he'll still push for pure electronic money, I guarantee you). For all the arguing back and forth that goes on in the blogosphere, I rarely see anyone change their views and say, "Wow, that's a good idea! I'll add it to my toolbox." I guess it's an ego thing. John Snoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-5224335112799370962015-02-21T14:32:13.730-05:002015-02-21T14:32:13.730-05:00Maybe I'm missing something, but it seems stra...Maybe I'm missing something, but it seems strange to put such amount of time to come up with ideas how to destroy the free market.<br />Personally I cannot wait for CBs to start implementing these suggestions as most of my savings are already in precious metals. :-)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-15279823496447410642015-02-20T10:32:45.106-05:002015-02-20T10:32:45.106-05:00I completely agree that higher IOR means less hot ...I completely agree that higher IOR means less hot potato effect from expanded money supply. I have been perplexed by why the Fed would pay any IOR in this climate.<br /><br />Thanks for taking the time to respond to your commenters.<br /><br /> -Ken<br />Kenneth Dudahttps://www.blogger.com/profile/10593455504357461005noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-40282371134626261542015-02-20T09:42:15.658-05:002015-02-20T09:42:15.658-05:00Nobody? What about Miles Kimball?
Ever since Mile...Nobody? What about Miles Kimball?<br /><br />Ever since Miles started blogging I think Sumner probably retrenched to focus purely on NGDP targeting and the quantity of the base.<br /><br />Here's something more recent:<br /><br />http://econlog.econlib.org/archives/2015/01/central_banking.html<br /><br />"Nonetheless, it is probably impossible to pay negative interest rate on currency. Nor do I think it is feasible to make it so that currency is no longer a medium of account (as Miles Kimball proposed.)"<br /><br />(...which was incidentally also a reply to my idea of removing large denomination notes, although I'm not sure what Scott was trying to say.)<br /><br />So Sumner probably sees some positive benefits to reducing interest rates into negative territory, but sees this potential as bounded by the existence of 0% cash. Nor does he think it likely that Kimball's plan can work given the necessity of a medium of account switch... which is a weak argument. Switches are costly, but not impossible. JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-37894591702893625392015-02-20T09:22:59.788-05:002015-02-20T09:22:59.788-05:00I agree, an NGDP target is probably better than an...I agree, an NGDP target is probably better than an inflation target.<br /><br />"Don't most people agree that in the long run, the price level is determined by the size of the monetary base."<br /><br />Not when a central bank pays a competitive rate on deposits. Given a competitive rate, monetary base expansions don't do anything since deposits aren't being debased in any way. At this point, the way to drive NGDP is to reduce the deposit rate, since this debases deposits by reducing their return.<br /><br />https://ello.co/jp_koning/post/-YgIT9FD5rDsqXwq7MpFGwJP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-34014420418528986442015-02-19T22:17:22.437-05:002015-02-19T22:17:22.437-05:00Quick question: Has Scott Sumner changed his stanc...Quick question: Has Scott Sumner changed his stance on imposing a penalty on excess reserves? Recently, after clicking a few links, I ended up on Scott's 2009 open letter to Krugman. Under the point "Easy Reforms," he wrote:<br /><br />"Eventually I will get to quantitative easing, but there are some even easier steps that could make the problem much more manageable, without incurring the risks of highly unconventional policies. One easy step would be to stop paying interest on reserves....<br /><br />... why not go one step further and charge an interest penalty on excess reserves? That would end the current problem of banks treating reserves and T-bills as near perfect substitutes. Yes, it wouldn’t solve that problem with respect to cash held by the public, but so far most of the hoarding of base money has been done by banks.... I don’t know if the interest penalty idea would work, but the Fed should certainly consider it."<br /><br />http://www.themoneyillusion.com/?p=349<br /><br />After Krugman wrote a dismissive response to the letter, Sumner replied in the NYT comments:<br /><br />"I still haven’t gotten an answer on why my interest penalty idea on excess reserves wouldn’t work (from any major economist, not just Krugman.)"<br /><br />http://krugman.blogs.nytimes.com/2009/03/02/a-quick-response-to-scott-sumner/comment-page-1/#comment-137039<br /><br />I still feel the same way--nobody in the monetary econ blogosphere*** seems to be pushing this idea nowadays, and I don't understand why they aren't. I only skim Sumner's blog every few days, but I get the sense that he also has become a lot less enthusiastic about the penalty idea in recent years, despite being quite supportive of it in the early days of his blog (in fact, his FAQ still includes the following: "The Fed should stop paying interest on excess reserves, and if necessary should put a small interest penalty on excess reserves. This would encourage banks to stop sitting on all the money that has been injected into the system.")<br /><br />As I said, I don't recall seeing the penalty idea at all in Sumner's posts over the last few years (or Glasner's, for that matter). Any thoughts on what accounts for its disappearance and absence?<br /><br />*** Numismasphere? Perhaps another reader can think of a more elegant term.John Snoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-23611061722893546152015-02-19T20:21:03.561-05:002015-02-19T20:21:03.561-05:00Thanks, JP. I love your explanation (in "the...Thanks, JP. I love your explanation (in "the Market Monetarist Smell Test") of why outsourcing forecasting to a predictions market is such a win. I agree with you that NGDP is just one possible nominal aggregate target, but it seems like a pretty good one, and certainly better than targeting inflation, so I'm surprised you're not more positive on it. Do you think there is a (much) better target? (I sort of like aggregate nominal labor compensation per capita myself, but NGDP is probably very nearly as good.)<br /><br />I think it's downright strange that you are so negative on the monetary base size as the instrument. Don't most people agree that in the long run, the price level is determined by the size of the monetary base (relative to the size of the economy)? Given that, doesn't the (expected future) size of the monetary base drive people's expectations of future prices, i.e., inflation expectations, which in turn determine real rates, which in turn drives spending, which drives NGDP? Granted that's a lot of "in turns", but that's what the prediction market is for --- to get the details right, to tell the Fed how big the monetary base will have to be to get inflation expectations to the point needed to hit the Fed's NGDP target for this year.<br /><br />But I apologize, I'm just repeating myself. I agree that negative nominal rates would be a powerful tool if they can be made to work. But given that no one knows how negative they need to go to do the job, we don't know if there is a set of politically feasible changes to the US payment system that will prevent people from escaping to guaranteed 0% nominal return assets (cash) if a -10% or -20% nominal return on central bank deposits turns out to be necessary to maintain aggregate demand. <br /><br />But you have certainly inspired me to think harder about it. Thanks again.<br /><br /> -Ken<br />Kenneth Dudahttps://www.blogger.com/profile/10593455504357461005noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-59617771859570447802015-02-19T19:46:35.551-05:002015-02-19T19:46:35.551-05:00One last thing you may find interesting: an NGDP f...One last thing you may find interesting: an NGDP futures mechanism can be twinned with an interest rate tool, as long as that tool is designed so it can go negative.<br /><br />http://jpkoning.blogspot.ca/2014/10/the-market-monetarist-smell-test.htmlJP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-43166536551022741342015-02-19T19:19:15.022-05:002015-02-19T19:19:15.022-05:00Thanks, JP. I would love to be wrong about negati...Thanks, JP. I would love to be wrong about negative nominal rates because if they can be made to work, they would be such a powerful tool to fight a positive money demand shock like the one that knocked us off our feet in 2008. I'll be sure to keep my eyes on this and see if I can connect with Miles.<br /><br /> -Ken<br />Kenneth Dudahttps://www.blogger.com/profile/10593455504357461005noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-40054968742306111582015-02-19T14:41:34.545-05:002015-02-19T14:41:34.545-05:00Thanks for the offer; the guy to talk to on that f...Thanks for the offer; the guy to talk to on that front is Miles Kimball. I'm just a scribbler.<br /><br />"I believe negative nominal rates are impractical because you are never going to convince the electorate that it makes sense for banks to charge them interest on their own deposits"<br /><br />It's already happening in Denmark (-0.75%), Sweden (-0.85%), and Switzerland (-0.75%), with the ECB also implementing a slightly negative deposit rate.JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-18302267559627188672015-02-19T11:28:53.040-05:002015-02-19T11:28:53.040-05:00JP, thank you for the comment, and especially to t...JP, thank you for the comment, and especially to the link to your August 2013 post. That is a great explanation of the monetary authority's ability to move NGDP even at the ZLB, honestly one of the best I've seen. I'll add it to my arsenal.<br /><br />> Please contribute your brain power to explaining why <br />> it won't do the specified job...<br /><br />I've had a hard time gearing up my brain to really think about negative nominal rates because I am interested only in practical solutions, and I believe negative nominal rates are impractical because you are never going to convince the electorate that it makes sense for banks to charge them interest on their own deposits, and/or do other things to make it "expensive" to work with paper currency (crawling pegs, deposit fees, whatever). The left will hate it as a giveaway to the banks, and the right will hate it as a state power grab, and they're both wrong, but it doesn't matter, your idea is dead. I believe NGDPLT has a real chance of support from both the left and the right (except for the Austrians/libertarians, but they're a smallish faction). That's why I funded the new Program on Monetary Policy at Mercatus. Unfortunately MM'ers are slowing down the building of the needed consensus by antagonizing Keynesians, but I believe that rift can be healed through a New Monetary and Fiscal Policy Consensus that broadly consists of NGDPLT plus automatic fiscal stabilizers if NGDP drops too much below target for too long. I believe that direction is a huge improvement over current policy and is also achievable. So that is the direction I am pushing.<br /><br />That said, I am seriously prepared to fund any credible effort to improve monetary policy as practiced by the world's major central banks. I am open to doing more, including in the negative-nominal-rate area. It will take some convincing to convince me that the negative-nominal-rate direction is practical, but I do recognize that if you could pull off negative nominal rates, it would be a huge help in stabilizing the nominal economy. if you can see the path to make negative nominal rates a reality, and think some funding could advance us down that path, please let me know, kjd@duda.org.<br /><br />Thanks, <br /> -Ken<br /><br />Kenneth Duda<br />Menlo Park, CA<br />Kenneth Dudahttps://www.blogger.com/profile/10593455504357461005noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-59380824696023929202015-02-19T09:36:37.315-05:002015-02-19T09:36:37.315-05:00Ken, I've written before about how the Fed has...Ken, I've written before about how the Fed has "control over the nominal universe". I've called it a central banker's Archimedean lever, whereby if you "give any central banker full reign, they'll be able to increase NGDP by whatever amount they desire."<br /><br />http://jpkoning.blogspot.ca/2013/08/give-bernanke-lever-long-enough-and.html<br /><br />As for the idea that purchases stop working at the ZLB, it is mainstream. Have you tried to engage with what folks like Woodford and Wallace have to say on this issue? <br /><br />This post isn't about NGDP targeting. Do you think that the non-fungibility of various note types is a sufficiently large friction to allow a central banker to reduce rates further into negative territory, without flight into cash? Please contribute your brain power to explaining why it won't do the specified job rather than talking about another subject :) I'm curious what readers come up with.JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-2325372423751158882015-02-18T22:37:49.775-05:002015-02-18T22:37:49.775-05:00JP, thanks for the note. I think you vastly under...JP, thanks for the note. I think you vastly underestimate the power of the central bank over the nominal economy. You write:<br /><br />> Purchases become irrelevant, and the interest rate lever gets stuck.<br /><br />I am always surprised when sophisticated economists act as though the Fed can't place NGDP anywhere it wants. NGDP is a purely nominal quantity, and the Fed is master of the nominal universe.<br /><br />NGDP is coming in a little low? Getting frustrated about missing your targets quarter after quarter? How about offering to buy unlimited quantities of yen at $1 each until NGDP reaches its target level. Or Euros for $100 each. And promise that those purchases will never be undone, that the monetary base expansion is permanent. What do you think that would do to NGDP?<br /><br />Way too many people seem to have concluded that since inflation has been below target for 24 quarters running, that the Fed must be powerless to raise it. Nonsense, the Fed can get whatever price level it wants simply by committing to do whatever it takes to get it, and following through on that commitment. For example, if the Fed had switched to PCE level targeting in 2008, and then fallen short in 2009, and said okay folks, we are not kidding, here is our new PCE level target (2% higher than the last PCE level target even though we fell short), and here's the monetary base expansion that's permanent, higher inflation is right around the corner, what do you think that would have done to the market's inflation expectation and 30-year treasury yields? By driving inflation expectations higher and keeping nominal rates at zero, the Fed would create a -4% or -6% real interest rate climate just like that. If you don't think that would increase spending at the margin, then I'm not sure what else to say.<br /><br />In other words, the reason the Fed has been failing to hit its inflation target is because it isn't trying to hit it. It has other priorities. For example, it links QE program duration to unemployment levels. And then it tapers QE3 while still under its inflation target. Between those sorts of actions and the endless hawk squawking, the Fed's inflation target has lost credibility. Look at 30 year bond yields! And I'm not the only one who has concluded the Fed is just kidding about its inflation target. See David Beckworth (http://macromarketmusings.blogspot.com/2014/12/tinkering-on-margins.html), and Mark Thoma (http://economistsview.typepad.com/economistsview/2014/03/the-two-percent-ceiling-for-inflation.html).<br /><br />The Fed can achieve anything it wants to in the nominal economy. Today, it is using the wrong instrument in the wrong way in pursuit of the wrong target. The room for improvement is breathtaking. (Well, until you compare the Fed to the ECB anyway.) We don't need negative nominal interest rates. All we need is the right target (NGDP, not price level) targeted the right way (level targeting, not growth rate targeting) using the right instrument (monetary base expansion, not interest rates).<br /><br /> -Ken<br /><br />Kenneth Duda<br />Menlo Park, CA<br />Kenneth Dudahttps://www.blogger.com/profile/10593455504357461005noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-67279669314801139572015-02-18T18:05:53.134-05:002015-02-18T18:05:53.134-05:00"So your lower bound becomes the operating co..."So your lower bound becomes the operating cost of the lowest-cost warehouser..."<br /><br />Effectively, yes. Right now I'm pretty sure the operating cost of cash storage is high since there is very little demand for the product and no reason to innovate. Entrepreneurs might start building warehouses out in Iowa to store $10 bills if interest rates go to -3.5%, charging customers say 3% for the service. If the costs of running the warehouse are 1%, our entrepreneur enjoys a 2% return each year. But they'd have to be pretty sure that rates are going stay at extremely low levels for more than a few years if they're going to commit that sort of capital. Without that sort of guarantee, I don't see the competing down storage operating costs to minimal levels. <br /><br />Other anon, I read something on cash ETFs here:<br /><br />https://www.bondvigilantes.com/blog/2015/02/10/zero-bound-debate-negative-rates-tightening-policy/JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-86313722495399148992015-02-18T16:55:52.540-05:002015-02-18T16:55:52.540-05:00What about an ETF that does this?What about an ETF that does this?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-18704023750980606502015-02-18T16:40:10.710-05:002015-02-18T16:40:10.710-05:00The problem is that the cost of holding cash is no...The problem is that the cost of holding cash is not well-defined, and you would create space for someone to go into the cash-holding business. 2.5% cost to hold a thousand dollars for a year might look reasonable; but if you needed a hundred billion held, don't you think you could do it more cheaply than 2.5 billion? Someone will go into business with a warehouse just down the road from the mint, stacking up pallet-loads of fresh-printed $10 bills; and they'll gladly accept your excess reserves at the Fed, convert them to 10's and throw 'em on the pile, for 1% interest or whatever. So your lower bound becomes the operating cost of the lowest-cost warehouser, and I'm not convinced that it would be low enough to matter.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-67734748907232295012015-02-18T15:32:08.926-05:002015-02-18T15:32:08.926-05:00If maintenance of the rate of inflation is achieve...If maintenance of the rate of inflation is achieved at the expense of the funds rate, then you could have a decreasing real interest rate. Do you agree? Is that an issue? Is it likely?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-64435755450105679012015-02-18T14:59:28.207-05:002015-02-18T14:59:28.207-05:00I'm not sure if a fall from 2% to -2% is any w...I'm not sure if a fall from 2% to -2% is any worse than a fall to 6% to 2% for life insurers. In other words, they always suffer when rates decline, but somehow they have been able to honor past contracts. JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-65746672046368654522015-02-18T14:55:42.278-05:002015-02-18T14:55:42.278-05:00No worries, Anton, and thanks for reading. I'l...No worries, Anton, and thanks for reading. I'll get to your response on the black holes post once the activity dies down on this post. JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-57770860415802145182015-02-18T13:59:39.018-05:002015-02-18T13:59:39.018-05:00what happens to insurance and pension portfolios w...what happens to insurance and pension portfolios when they run out of positive yielding assets to buy? Won't their go bankrupt trying to honor the past contracts?Reynmakerhttps://www.blogger.com/profile/07476475937171799011noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-74303465204741532452015-02-18T13:36:07.819-05:002015-02-18T13:36:07.819-05:00JP, you are right. I did not read this specific po...JP, you are right. I did not read this specific post, that is, not all of it. But I never said I did, I just answered your question. I often read your blog and consider it one of the more informing on the subject, as far as I can judge (not being an insider).<br /><br />Normally, I never respond to your blog, but somehow this article struck me. I have noticed that you are being read by "important" economists. And in my opinion, that brings some responsibilities, if you like it or not. <br /><br />The point that I try to make is that this is not some kind of intellectual game. We are in the midst of a serious crisis, and to my opinion, it is the financial sector that brought us there. And I sincerely ask myself if ideas like this are goiing to solve this problem instead of making it much worse.<br /><br />Having said that, I will post my question on the article "speculative-markets-are-not-black-holes" and hope you will answer it there.<br /><br />AntonAnonymousnoreply@blogger.com