just in in-tray
the Austrian view is that velocity is a useless concept (see various explanations by Rothbard, Hazlitt et al.), however imo one must incorporate it when thinking about extreme monetary/credit events in a pure fiat money system. i've concluded that after what happened in Japan (i may well be wrong and it's possible i will change my mind again).
regarding how to measure it, as long as your measures are historically consistent and show the same trends, it likely doesn't matter which ones you use. what i mean is that for instance, although government's job data are obviously not representative of reality, they still manage to depict trends, and the same goes for all other such data.
re. the POMOs, they should show up in the balance sheet of the Fed - it strikes me as a fairly normal, if unusually large, pumping operation. also, it's unusual that only agency debt was used, but i guess it's now 'as good as treasury debt' even though the underlying businesses are bankrupt.
btw., should the government continue to throw everything and the kitchen sink into bail-outs, then treasury debt could become suspect somewhat sooner that i have been expecting. one must consider that the while the bail-outs are essentially open-ended, the general expectation of the bureaucracy is likely still that 'we'll soon get over this rough patch' and that therefore the amounts involved won't be extremely excessive. well, we're talking about a bunch of people 'who never saw it coming' and should therefore view their expectations with a great deal of skepticism. it's possible that the amounts involved will be astronomical in the end, unless the whole bail-o-rama meets with sufficient resistance from the tax cows , who cast votes once in a while. if it's allowed to get out of hand, then resistance will inevitably come from the investoriat involved in t-bonds (once known as 'bond vigilantes').
also, the bail-outs do not change reality. they only change who gets to be on the hook, a point that might one of these days receive wider recognition, and therefore provoke resistance |
