Ramsey, Gregg and other "New Paradigm Rulz OK!" doubters, check out:
web.mit.edu
which basically [hidden within all the tortuous tripe] says "Stuff the savers, print lots of money, diluting them to hell. Economies need inflation".
He says: "The way to make monetary policy effective, then, is for the central bank to credibly promise to be irresponsible - to make a persuasive case that it will permit inflation to occur, thereby producing the negative real interest rates the economy needs".
Now if savers don't understand that they are being sized up for a turkey- shoot, and thanksgiving dinner, I don't know what would persuade them.
Your sea-shells means of exchange is a reasonable reaction, though I say stick with the actual physical entities which will benefit from the New Paradigm in which money will become not a store of value but a means of exchange. It's simply too hard to move sea-shells through the Web. But Mighty-Q! and SpinCo stock can transfer nanosecondly. The new money is 'stock ownership' in the New Paradigm.
Krugman's stuff is the current conventional wisdom and Japan, USA and others believe the rot about a deflationary spiral and will print like hell. Of course it is very simple to avoid a deflationary spiral = you cut taxes and replace the spending needs with freshly minted money.
Krugman says Japan has expanded its balance sheet 50% per year and still they are wading in the swamp. He does acknowledge the demographic change there = older people don't work as much, don't need as much and produce a lot less so it is understandable that Japan's economy is shrinking as part of the overall malaise due to mismanaged debts and dumb investment in speculative real estate and other ventures.
With the USA having to match the Japanese and others printing of money to revitalize their economies, or see the currency disparities increase to create big trade imbalances and volatility of many markets, I reckon that Dow 16000 might be conservative in Feb 2002. But probably after a couple of years of wild printing, it will all settle down to a more straightforward rapid rate.
People do have the idea that money is some solid measure like a metre or kilogram [flexible though those entities are in the quantum scheme of things] instead of the elastic band it really is.
Overall Ramsey, you are right - we are heading for a 'sea-shell' backed currency, but the sea-shells will be stocks.
Abandon money now folks - inflation is ripping you off even though consumer price indices trick you into thinking otherwise. Prices should be falling, not staying the same. NZ law and Fed intent is to keep money constant, which means, especially in the current financial shambles, that they'll be taxing money holders by diluting them.
Buy Qualcomm now.
Yeah, Amazing that YHOO etc are valued so highly. Efficient markets? Hahaahahaa!!
Mqurice
Dow 16000
Feb 2002
You saw that first here Ramsey [and Dow 8000 at Feb 1998 which seemed wild too 3 years ago] |
