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How are economies that literally have no monetary policy a better alternative, though?
by michaelchisari 10y ago
How are economies that literally have no monetary policy a better alternative, though?
- jbarham 10y agoQuoting from the article: "At some point investors – leery and indeed weary of receiving negative or near zero returns on their money, may at the margin desert the standard financial complex, for higher returning or better yet, less risky alternatives."
- endswapper 10y agoI'd argue that they are not. It's more about the proper measure. Monetary policy is a tool attempting to hit a moving target.
- mattnewton 10y ago> Monetary policy is a tool attempting to hit a moving target By sweeping the ice in front of the economy-puck with a toothbrush. There is an effect, just a lot of other stuff has a big effect too...
- WalterBright 10y agoThe US had no monetary policy for the first 100 years of its existence, going from subsistence farming to superpower.
- enraged_camel 10y agoNitpick: the US did not become a superpower until World War 1, when it dramatically expanded the size of government and the military.
- thesimpsons1022 10y agoeven then, it's true super power status was achieved after ww2 when we did have the Fed. not a nitpick, it is a central part of his false premise.
- cinquemb 10y agoHow much of such super power status was derived from Fed itself vs a system that was able to distribute and allocate resources more efficiency than the time before? One could argue that the Fed (and other central banking institutions), compared to times before was that more efficient system, but idealistically, efficient systems are not bounded by the present situation, just temporarily constrained by such. And as people like Bill Gross (who cofounded PIMPCO) are starting to publicly state in some form another, is loosing its effectiveness when it comes to managing resource allocation beyond the state we are at. There are a whole host of human endeavors that are not undertaken (think infrastructure investments) because its more profitable in the short term for large institutions to use their near zero interest credit lines on financial markets, but in the long term are blinded to opportunities that can only come from more efficiency in sectors like energy/mining/transportation.
- thesimpsons1022 10y agoi never made that claim. not sure why all of a sudden you're changing the subject. I was simply responding to the claim of " The US had no monetary policy for the first 100 years of its existence, going from subsistence farming to superpower. "
- cinquemb 10y ago>not sure why all of a sudden you're changing the subject. Well trying to connect this and bring it back to the topic of the original article…
- deleted 10y ago[deleted]
- justinlardinois 10y agoThe Federal Reserve was established in 1913, long before World War II.
- xenadu02 10y ago> The US had no monetary policy for the first 100 years of its existence, going from subsistence farming to superpower It was also rocked by regular financial panics during this period, including massive economic shocks when large gold and silver deposits were discovered that suddenly flooded the economy with new "money".
- WalterBright 10y agoThe US economy since has hardly been free of massive economic shocks, neither has any other monetary policy economy.
- ArkyBeagle 10y agoThe US was a financial basket case that entire time. See ( the unfortunately titled ) "A Nation of Deadbeats."
- EdHominem 10y agofwiw, gold doesn't have an economic policy either. But the difference is that with fiat, "no policy" means they'll do whatever they want in the future. With cryptocurrency no policy is more like an unbreakable policy of no tampering.
- empath75 10y agoJust like any other commodity.