Why Won't They Ever Send Me This Useless Stuff?
Yet another assertion that our dollars aren't "really money":
"Central banks of the world’s terminally indebted countries prefer the fiction that paper money that’s printed at little cost, or digital bookkeeping entries that are created at no cost, is money and therefore constitutes real wealth."
I keep asking the people saying things like this to send me all of the worthless pieces of paper they have collected so I can get rid of them for them... but they never do.
"Central banks of the world’s terminally indebted countries prefer the fiction that paper money that’s printed at little cost, or digital bookkeeping entries that are created at no cost, is money and therefore constitutes real wealth."
I keep asking the people saying things like this to send me all of the worthless pieces of paper they have collected so I can get rid of them for them... but they never do.
Because the Post Office enjoys a disgusting monopoly. You get rid of that, and then people will mail you their fiat notes.
ReplyDeleteWhat is particularly strange about that LewRockwell.Com statement is that the most severely indebted countries in the world...have no sovereign central banks!
ReplyDeleteIn fact, it's the countries with a central bank that face little or no sovereign debt problems.
Portugal, Spain, Italy, and Greece have no central bank of their own. And for years, the ECB was refusing an activist monetary policy to accommodate their debts - as good as having no central bank.
Meanwhile, Japan has a higher debt to GDP ratio than all those countries, but is not crippling under a recession like Greece.
And for years, the ECB was refusing an activist monetary policy to accommodate their debts - as good as having no central bank.
ReplyDeleteWhat are you talking about Prateek? All "serious" analysts advance the notion that a central bank's job isn't to monetize the debts of a government that has a solvency problem, because that's the road to runaway inflation. I agree that was always a bogus claim, but that was the official stance of non-nutjobs all along. It wasn't some surprising announcement, but standard policy in line with the original founding of the euro, that of course the ECB wouldn't (and couldn't) buy up debt from individual governments with the aim of lowering their borrowing costs.
What's new, and surprising, is that all of this has gone out the window and I seem to be the only one who remembers what people were saying in 2008 and 2009.
Professor Murphy, that is surprising to me. I did not know people said that.
ReplyDeleteIn my college macroeconomics class, we were introduced to monetary policy as a means to assist the fiscal policies of the government. As if it was the most obvious thing that central banks did.
Interestingly enough, when the Mario Draghi ECB announced an Outright Monetary Transactions program to provide unlimited financial assistance to indebted governments, European stocks shot up. Implying that markets believe in the logic of an activist central bank.