tag:blogger.com,1999:blog-6616959642391988608.post4483032928798455200..comments2024-03-18T13:22:06.536-07:00Comments on Calafia Beach Pundit: The M2 myth: money is not in scarce supplyScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger50125tag:blogger.com,1999:blog-6616959642391988608.post-51729233785722356042010-08-16T21:50:11.197-07:002010-08-16T21:50:11.197-07:00This comment has been removed by a blog administrator.halleberryhttps://www.blogger.com/profile/05446913527756764103noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-78884136958430348702010-07-09T02:55:41.980-07:002010-07-09T02:55:41.980-07:00This comment has been removed by a blog administrator.Unknownhttps://www.blogger.com/profile/14958515986089135461noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-8839857925489376922010-07-07T23:06:18.670-07:002010-07-07T23:06:18.670-07:00This comment has been removed by a blog administrator.Anonymoushttps://www.blogger.com/profile/12561311256046383228noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-91296925493343887242010-05-24T14:14:07.338-07:002010-05-24T14:14:07.338-07:00Benji: "Whatever we spend on our military sh...Benji: "Whatever we spend on our military should be paid for, not borrowed."<br /><br />When has the ever happened for a sustained period? The US has run a deficit for most of its history. But, if you insist on a pay as you go system, reduce or eliminate the entitlements and social spending lavished on your parasitic fellow Obama voters and we could run a surplus forever. National Billhttps://www.blogger.com/profile/05145490918994594519noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-46290376246792137322010-05-24T14:04:54.350-07:002010-05-24T14:04:54.350-07:00Public Library/Benji: I enjoy discussing history ...Public Library/Benji: I enjoy discussing history with people whose (usually erroneous) historical knowledge is limited to their own lifetimes. <br /><br />Public: "Bush was the first to execute preemptive wars and the first to wage war without paying for it."<br /><br />Let's see, the Revolutionary War, the War of 1812, the Mexican War, the Civil War, the Spanish-American War, Billhttps://www.blogger.com/profile/05145490918994594519noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-76710429627050098852010-05-24T10:02:45.784-07:002010-05-24T10:02:45.784-07:00Mark: It's tough to argue against the wisdom o...Mark: It's tough to argue against the wisdom of Milton Friedman, but let me try. I think MF is generally right, but there is a question of causality that he glosses over. Periods of rising inflation are often preceded by low interest rates; indeed, I would argue that inflation can be triggered by a central bank keeping rates lower than it really should. Similarly, periods of low inflation areScott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-20967953401174927562010-05-24T09:53:11.953-07:002010-05-24T09:53:11.953-07:00Mark: You make quite a few good points that contra...Mark: You make quite a few good points that contradict my belief that monetary policy is accommodative. Bear with me and I'll address most of them.<br /><br />Whether M2 is up or down by $30 billion or so is a very minor issue. It's very clear however that the growth of M2 has slowed considerably and by some measures is modestly negative. Does this confirm that money is tight? No. In my Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-32653587823416094082010-05-24T09:00:02.441-07:002010-05-24T09:00:02.441-07:00Bill-
Whatever we spend on our military should be...Bill-<br /><br />Whatever we spend on our military should be paid for, not borrowed.<br /><br />Milton Friedman advocated the use of a progressive consumption tax to finance military mobilizations. <br /><br />In general, I contend federal outlays should be balanced by revenues, except in times of depp recession or full-on wars, such as WWII.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-89132343953685028222010-05-24T08:09:08.664-07:002010-05-24T08:09:08.664-07:00Bill,
Bush was the first to execute preemptive wa...Bill,<br /><br />Bush was the first to execute preemptive wars and the first to wage war without paying for it. What planet are you living on?<br /><br />The Iraqistan wars are running into the trillions now. You must be over saturated with tea packets.Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-68707882343129722592010-05-24T07:38:39.235-07:002010-05-24T07:38:39.235-07:00Benji: You seem to have forgotten that Reagan had...Benji: You seem to have forgotten that Reagan had to incur debt to defeat the Soviet Union. His great success at this provided subsequent Presidents with a peace dividend thereby allowing them to spend less on the military. <br /><br />This worked well until liberals (in both parties but mostly Democrats like Obama) discovered that they could buy votes from the parasite class by running up Billhttps://www.blogger.com/profile/05145490918994594519noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-51772027263117467272010-05-23T18:03:33.661-07:002010-05-23T18:03:33.661-07:00This comment has been removed by a blog administrator.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-52560764264751319052010-05-23T16:27:11.541-07:002010-05-23T16:27:11.541-07:00John,
0.25% may seem small but keep in mind there...John, <br />0.25% may seem small but keep in mind there are plenty of investors for 1, 3 and 6 month T-Bills that pay less. Also, look at this graph and consider the timing. Coincidence?<br /><br />http://research.stlouisfed.org/<br />fred2/series/EXCRESNS?cid=123Mark A. Sadowskihttps://www.blogger.com/profile/08259309059705236763noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-84425112762454934152010-05-23T16:08:36.010-07:002010-05-23T16:08:36.010-07:00Mr. Sadowski,
.25% APR on excess reserves is cert...Mr. Sadowski,<br /><br />.25% APR on excess reserves is certainly more than nothing but not much more. It is tight commercial bank lending policies that keep the money there. As qualified borrowers emerge there is still plenty of incentive for banks to lend. <br /><br />Maybe that is an important factor but I have trouble seeing .25% as a meaningful deterrant if a good loan to a qualified Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-20707445678984209782010-05-23T15:44:10.185-07:002010-05-23T15:44:10.185-07:00John,
I think the reason why bank reserves have fa...John,<br />I think the reason why bank reserves have failed to enter the economy this time is interest on excess reserves. This policy was implemented for the first time in Federal Reserve history on October 6th 2008. Banks can earn 0.25% APR by holding cash as excess reserves. This is more than they can earn at somewhat greater risk on 1, 3 or 6 month T-Bills. Consequently excess reserves went Mark A. Sadowskihttps://www.blogger.com/profile/08259309059705236763noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-37817881461378298032010-05-23T15:12:21.611-07:002010-05-23T15:12:21.611-07:00Mr. Sadowski,
I think I see your point: Low inter...Mr. Sadowski,<br /><br />I think I see your point: Low interest rates is indicative of tight money. I think money can be tight due to commercial bank policies but CENTRAL bank policy is in my view accomodative if money is practicly given to commercial banks. I still think Prof Friedman believed the reserve increases provided by Central banks would work their way into the economy through increasedJohnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-25141260918463457902010-05-23T14:45:56.848-07:002010-05-23T14:45:56.848-07:00John,
Milton Friedman also said the following:
&...John,<br /><br />Milton Friedman also said the following:<br /><br />"Low interest rates are generally a sign that money has been tight, as in Japan; high interest rates, that money has been easy."<br /><br />and<br /><br />"After the U.S. experience during the Great Depression, and after inflation and rising interest rates in the 1970s and disinflation and falling interest rates Mark A. Sadowskihttps://www.blogger.com/profile/08259309059705236763noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-55084408275752935002010-05-23T14:43:14.189-07:002010-05-23T14:43:14.189-07:00Fam,
I agree with you. The Euro had an up week la...Fam,<br /><br />I agree with you. The Euro had an up week last week vs the USD. The US equity market had what looked to me like a climactic (for now) selloff and bounced up sharply at the close friday. I am expecting a pretty sharp rally near term. <br /><br />The panic has been fairly pervasive lately and the markets will need time to settle down. I think there will be a fair amount of back and Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-37477923887822476542010-05-23T14:34:18.845-07:002010-05-23T14:34:18.845-07:00Charles,
US monetary policy is already quite acco...Charles,<br /><br />US monetary policy is already quite accomodative and fiscal policy is as aggressive as I have ever seen it. While there are those who maintain none of this matters, and we are all on a train about to crash, the economic numbers just do not paint that picture. If you go back over Scott's many posts you will find ample evidence of this. <br /><br />As I see it, either MiltonJohnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-44136906840734763622010-05-23T14:26:13.598-07:002010-05-23T14:26:13.598-07:00Please take a look on three BRIC ETF:FXI, EWZ, RSX...Please take a look on three BRIC ETF:FXI, EWZ, RSX - looks like buyers emerged, (even one permabear I follow became short/medium term positive after this sellof). <br />EURUSD works as a EU Confidence Indicator now and neither ECB nor FED want hem to see as falling off the cliff undermining the sentiment, so bounce/stabilization is likely.<br />But further gradual weakening is possible. The time Family Manhttps://www.blogger.com/profile/10304538166086313103noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-57049471487514977662010-05-23T09:13:03.692-07:002010-05-23T09:13:03.692-07:00Scott,
I have located the OECD leading indicator...Scott, <br /><br />I have located the OECD leading indicators information I asked you about. The US and European components show continuing expansion while China and Brazil show a leveling off. Since the latter economies have been so hot, a slowdown would likely be a good thing. <br /><br />If you are interested, go to the OECD website and under the 'Statistics Directorate' menu click on Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-30551688281273890162010-05-23T08:56:53.359-07:002010-05-23T08:56:53.359-07:00I do think the European crisis calls for further e...I do think the European crisis calls for further easing of US monetary policy. The fall in the dollar has been the main driving force behind inflation this past year. Now that the dollar is rising, the fed needs to resume purchases of long-term debt and keep the federal funds rate at 0% for the next 6 months at least.<br /><br />On the fiscal side we need a true stimulus package. This would Charleshttps://www.blogger.com/profile/00607057013050715435noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-39709659882361985812010-05-23T04:03:25.809-07:002010-05-23T04:03:25.809-07:00@All of us
Is there any good book/author/theory o...@All of us<br /><br />Is there any good book/author/theory on "inflection points"? I am wondering if it is possible to "extract" this phenomena and describe its basic ingredients. It could go from different areas of knowledge, but maybe it could be applied generally to any kind of events.Family Manhttps://www.blogger.com/profile/10304538166086313103noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-71177003126507023402010-05-22T16:51:43.132-07:002010-05-22T16:51:43.132-07:00Your both right, I remember now, a few weeks after...Your both right, I remember now, a few weeks after the election our pay packets became heavier through big tax cuts and I think company/business taxes were cut also.<br /><br />On the flip side gov spending was massively cut back through firing gov workers. A lot of the utility companies were made leaner then sold off, the privatisations were all very successful, except the railways.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-54823092409215402622010-05-22T16:41:08.698-07:002010-05-22T16:41:08.698-07:00Scott,
If you look at weekly data M2 is down to 85...Scott,<br />If you look at weekly data M2 is down to 8529.6 on 5/10 from 8562.5 on 12/14/2009:<br /><br />http://research.stlouisfed.org/fred2/data/M2.txt<br /><br />Furthermore if you look at the broadest measure of money, MZM it is down after 13 months.<br /><br />Combine this with the 20% decline in aluminum, copper, oil since mid-April and<br /><br />The decline in US Treasury 10 year bonds Mark A. Sadowskihttps://www.blogger.com/profile/08259309059705236763noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-6503794220705676822010-05-22T15:52:15.105-07:002010-05-22T15:52:15.105-07:00BTW, here is a chart of the federal debt as percen...BTW, here is a chart of the federal debt as percent of GDP. How on earth anyone can look at this chart and say anything good about Reagan is beyond me. <br /><br />This is fighting inflation? The way you fight fire by pouring gasoline on it? <br /><br />I guess you could say that Obama will be worse. <br /><br />http://zfacts.com/p/318.htmlBenjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.com