tag:blogger.com,1999:blog-6704573462403312459.post4766880695736568873..comments2024-03-28T06:53:23.473-04:00Comments on Moneyness: Monetary policy is not a tightropeJP Koninghttp://www.blogger.com/profile/02559687323828006535noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-6704573462403312459.post-55776909488490338272020-03-10T04:27:14.231-04:002020-03-10T04:27:14.231-04:00"1. As long as new money is issued in exchang..."1. As long as new money is issued in exchange for adequate backing, the Fed’s assets will move in step with its issue of money, and there will be no inflation. This explains (among other things) why the Fed was able to issue enormous amounts of money after 2008, without causing inflation."<br /><br />What is the relationship between the Fed's assets and the issue of money? Why will there be no inflation? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-33905921436426433902020-01-27T23:40:36.493-05:002020-01-27T23:40:36.493-05:00My view is that even if money is issued for non-pr...My view is that even if money is issued for non-productive purposes, it will find its way to where it is needed. Specifically, if an economy is cash-starved, then money will thaw the channels of trade and stimulate business and employment. New money is like taking a drink of water. If you are thirsty, it can have a miraculous effect, but if you are not thirsty, it does you no good. <br /><br />The reason that old-time bankers favored real bills over fictitious bills is that they found that when they issued bank notes to farmers and carpenters, those notes tended to stay in circulation, but if they issued notes to gamblers and tourists, or for deposits of coins, the notes would reflux to the issuing bank the next day.Mike Sproulhttps://www.blogger.com/profile/12949235460682126524noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-12172956804317575802020-01-27T21:34:41.776-05:002020-01-27T21:34:41.776-05:00As I understand it, the Real Bills policy was deve...As I understand it, the Real Bills policy was developed at a time when the liquidity was used to enhance trade. But today, monies are used for non-productive purposes: real estate loans, corporate buy-outs, mergers, share buy-backs etc. Unemployment is unlikely to be affected by monetary policy. Fiscal policy is required wherein the government spends money into the real economy by targeted spending that puts people to work. Larry Kazdanhttps://www.blogger.com/profile/04756717838017050246noreply@blogger.com