Tag: Monetary Policy
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The Biggest Problem the World Faces: No Stable Unit of Account
Here’s the best way to put it: Quantitative Easing (QE) is like saying that simply feeding a guy will make him exercise more. It doesn’t. It just makes him more fat (inflation). On the other hand, someone who is working out and growing muscle (ie, a metaphor for a growing economy) does need to be…
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The Major Mistake of Both Ron Paul and Paul Krugman
Vis a vi Monetary Policy: The major mistake of the “Monetarists” like Krugman is that they believe Monetary stimulation stimulates growth. It doesn’t. All that it stimulates is stagflation. I’m a Paulista, but the one thing I would disagree with him is that there is a way to know how much liquidity the economy…
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There is a Time For the Fed to Create Liquidity
Maybe the only thing I disagree with Ron Paul about, is that there is a time when the Fed should create liquidity, and that time is when, like in the 90’s due to the Internet and Communications revolution, there is a period of incredible growth. A growing economy needs liquidity like a growing body needs…
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The Only Part of the Equation that Ron Paul is Missing
Ron Paul is correct that gold is important. It’s very important. The only part of the equation that Ron Paul is missing is the demand for money. Inflation is caused by two factors: how much money is printed and how much demand there is for money (growth increases the demand) If you had enough growth…