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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: GraceZ who wrote (56104)3/17/2006 7:01:38 PM
From: Elroy Jetson  Read Replies (1) of 110194
 
Of course you're a "big fan" of expanding the money and credit supply at a minimum of 2% per year. All currency cranks believe that wealth and prosperity are dependent upon expanding the "money supply" -- because that way, "everyone has more money".

This is a favorite deception of Milton Friedman. He is deeply suspicious of the free market and dresses up his monopolistic currency crank ideas up in a thin disguise of "free marketry". Have you ever examined this dubious idea?

1.) How do currency cranks like Friedman propose to limit the growth of the "money supply" to just 2% per year?

Will Grace Zaccardi go from lender to lender and issue citations and dark threats when they exceed their 2% annual growth? Do you propose imprisonment or just fines for exceeding the 2% speed limit?

If the money supply growth is less than 2% per year due to risk aversion or a sudden panic among lenders, do you threaten to kill their family and burn down their homes until they bring the growth in lending up to your 2% required minimum?

2.) An even better question is, why do currency cranks like yourself believe the "money supply needs to grow at all? When improvements in productivity lower nominal prices by 20%, why is it necessary to increase the "money supply" by 20% in a desperate attempt to keep nominal prices stable? Why not just let the free market lower prices by 20%? Is that really so terrifying?

Just like John Law, Milton Friedman believes nominal prices need to increase by at least 2% per year. Partly because he has an obsession with nominal prices and partly because he believes the free market cannot be trusted to maintain stability. Do you share his fears and quirks, or do you have your own motivations?
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