Who is believing in the current monetary policy is still the right course and why?

Maverick74 said:
There are so many mistruths in this post, not sure where to start. Inflation is not an increase in the money supply and increasing money supply does not directly cause higher prices. Spend a few minutes and think through the logic on that if you can.
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inflation is an increase in the money supply +an increase in the velocity of money. you can print all the money you want and if people don't spend it or hoard it under their mattress, for whatever reason, there is no inflation. if people don't trust the future of a country and its government (perhaps a future wealth tax or vat increase or war etc. etc.) even a small increase in money supply will lead to inflation.
 
tandh said:
The vocabulary has become distorted.

Inflation is the increase of the money supply with the result being higher prices.

Deflation is the reduction of the money supply with the results being lower prices.

Current dictionaries have changed the definition of inflation to mean rising prices and deflation to mean falling prices. This is because in general they were both so interchangeable that they were just used this way.

But using the original definitions, prices can fall without deflation. Increases in industrial efficiency, for example, lead to falling prices. This is a great thing, as we can then all buy more stuff with the same amount of money. Our standard of living has just increased in this example.

The idea of falling prices being a bad thing is brain washing of the 1st degree. I don't know about you but I would be happy to see my milk get cheaper rather than more expensive. Falling prices are a good thing, rising prices are a bad thing. It's common sense.

In regards to current monetary policy, the problem is that we have central planners trying to dictate the economy. This never works. Why not let the free market set the interest rate? Why not keep the government out of the private market?
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I could not disagree more with this post!
 
Tsing Tao said:
He's an academic with no real world experience. Reads a lot, has no idea how to practically apply his knowledge. Big, big fan of Bernanke and the Fed. Not surprising.

Might even work for the Fed - never did answer that question. But would explain the shameless cheerleading.
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it is a centuries old argument between those who believe in a hard currency and a soft currency. on the left they believe in a soft currency to extinguish the debt of the masses.
 
zdreg said:
what kind of response is appropriate to your egocentric and uninformative reply?
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Why should I waste ET resources repeating what MAV has already said about this post. I want both the poster and you to know that MAV is not the only one that disagrees with this wrong post. That's all that need be said.
 
piezoe said:
Why should I waste ET resources repeating what MAV has already said about this post. I want both the poster and you to know that MAV is not the only one that disagrees with this wrong post. That's all that need be said.
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Piezoe is now Mav's political spokesperson. All that's missing is "I'm Maverick, and I approve of this message."
 
piezoe said:
Why should I waste ET resources repeating what MAV has already said about this post. I want both the poster and you to know that MAV is not the only one that disagrees with this wrong post. That's all that need be said.
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everybody can find at least one other person who disagrees with a post. any post that includes the words I don't where to begin usually fails to provide the where to persuade others of their opinion. is it lassitude or just being intrinsically condescending? since you are of the same school you will certainly be understanding of his attitude even if you are not always his confirming mouthpiece.
 
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I still go back to the concept that the Fed is fighting battles that it created with prior reckless policy...The targeted creation of asset bubbles (let's not even pretend that they haven't been doing this) leads to these "deflationary bouts" once the bubbles deflate and the economy goes into recession...as a result, the Fed always has a valid excuse for their next round of overly loose monetary policy...when this loose monetary policy doesn't "stimulate" the economy sufficiently, it's time for even more "unconventional" measures...all of this to fight problems that are of their own making...
 
der_kommissar said:
"unconventional"
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these are not unconventional methods by the Fed.. it is used routinely by second and third world countries like argentina and brazil etc. it is used by first world countries when they run out of money to pay for their socialist agendas.
 
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