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M3 up 50%, fed can suck up excess liquidity later???
- Thread starter kxvid
- Start date
Quote from drsteph:
Not to be glib, but what hasn't been done here?
-aggressive easing to zero rate
-commercial paper purchases
-direct injections of liquidity
- while purchasing of the long end of the curve hasn't been admitted, I would not be surprised if it has already happened.
-
Totally agree that it has all been done but since the speech was givin in 2002 what has changed now that will show that his philosophy is flawed? I guess I don't understand your post.
Also, read this interesting exerpt of an essay by Bernake. READ IT CAREFULLY!
First, as you know, Japan's economy faces some significant barriers to growth besides deflation, including massive financial problems in the banking and corporate sectors and a large overhang of government debt. Plausibly, private-sector financial problems have muted the effects of the monetary policies that have been tried in Japan, even as the heavy overhang of government debt has made Japanese policymakers more reluctant to use aggressive fiscal policies (for evidence see, for example, Posen, 1998). Fortunately, the U.S. economy does not share these problems, at least not to anything like the same degree, suggesting that anti-deflationary monetary and fiscal policies would be more potent here than they have been in Japan.
First, as you know, Japan's economy faces some significant barriers to growth besides deflation, including massive financial problems in the banking and corporate sectors and a large overhang of government debt. Plausibly, private-sector financial problems have muted the effects of the monetary policies that have been tried in Japan, even as the heavy overhang of government debt has made Japanese policymakers more reluctant to use aggressive fiscal policies (for evidence see, for example, Posen, 1998). Fortunately, the U.S. economy does not share these problems, at least not to anything like the same degree, suggesting that anti-deflationary monetary and fiscal policies would be more potent here than they have been in Japan.
Quote from short&naked:
Also, read this interesting exerpt of an essay by Bernake. READ IT CAREFULLY!
First, as you know, Japan's economy faces some significant barriers to growth besides deflation, including massive financial problems in the banking and corporate sectors and a large overhang of government debt. Plausibly, private-sector financial problems have muted the effects of the monetary policies that have been tried in Japan, even as the heavy overhang of government debt has made Japanese policymakers more reluctant to use aggressive fiscal policies (for evidence see, for example, Posen, 1998). Fortunately, the U.S. economy does not share these problems, at least not to anything like the same degree, suggesting that anti-deflationary monetary and fiscal policies would be more potent here than they have been in Japan.
Too bad we didn't share those problems because it was 2002 and Bush and Cheney hadn't looted the coffers in entirety at that point.
Bob Chapman is one of a handfull that still attempts to track the M3 these days........ http://www.theinternationalforecaster.com/
Quote from joash99:
I don't know how accurate it is, but here's an estimation of the M3 money supply: http://www.nowandfutures.com/key_stats.html
Quote from AMT4SWA:
Bob Chapman is one of a handfull that still attempts to track the M3 these days........ http://www.theinternationalforecaster.com/
Thanks
Quote from short&naked:
Also, read this interesting exerpt of an essay by Bernake. READ IT CAREFULLY!
First, as you know, Japan's economy faces some significant barriers to growth besides deflation, including massive financial problems in the banking and corporate sectors and a large overhang of government debt. Plausibly, private-sector financial problems have muted the effects of the monetary policies that have been tried in Japan, even as the heavy overhang of government debt has made Japanese policymakers more reluctant to use aggressive fiscal policies (for evidence see, for example, Posen, 1998). Fortunately, the U.S. economy does not share these problems, at least not to anything like the same degree, suggesting that anti-deflationary monetary and fiscal policies would be more potent here than they have been in Japan.
Unfortunately the U.S. economy DOES share these problems.
btw, do you have a link for that essay?
Quote from LVMises:
Thanks
btw, do you have a link for that essay?
http://federalreserve.gov/boarddocs/speeches/2002/20021121/default.htm
Scroll down to where it reads "Japan" This is the Bernanke "helicopter" speech
This is part of Bernanke's speech where he obviously shows that devaluing the dollar doesn't bother him in the least.
Although a policy of intervening to affect the exchange value of the dollar is nowhere on the horizon today, it's worth noting that there have been times when exchange rate policy has been an effective weapon against deflation. A striking example from U.S. history is Franklin Roosevelt's 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation. The devaluation and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly. Indeed, consumer price inflation in the United States, year on year, went from -10.3 percent in 1932 to -5.1 percent in 1933 to 3.4 percent in 1934.17 The economy grew strongly, and by the way, 1934 was one of the best years of the century for the stock market. If nothing else, the episode illustrates that monetary actions can have powerful effects on the economy, even when the nominal interest rate is at or near zero, as was the case at the time of Roosevelt's devaluation.
Although a policy of intervening to affect the exchange value of the dollar is nowhere on the horizon today, it's worth noting that there have been times when exchange rate policy has been an effective weapon against deflation. A striking example from U.S. history is Franklin Roosevelt's 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation. The devaluation and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly. Indeed, consumer price inflation in the United States, year on year, went from -10.3 percent in 1932 to -5.1 percent in 1933 to 3.4 percent in 1934.17 The economy grew strongly, and by the way, 1934 was one of the best years of the century for the stock market. If nothing else, the episode illustrates that monetary actions can have powerful effects on the economy, even when the nominal interest rate is at or near zero, as was the case at the time of Roosevelt's devaluation.