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Alan Watts talks about how some things in life can be like trying to smooth the waves in the ocean with a flat iron. I often think of that when it comes to the

by gdubs 10y ago

Alan Watts talks about how some things in life can be like trying to smooth the waves in the ocean with a flat iron. I often think of that when it comes to the Fed. I know next to nothing compared to the financial wizards, but it does seem like every major financial crisis started with some marginal movement by the Fed. I'm not saying there's a better alternative, or necessarily knocking them - I have respect for them. But at times it seems like nobody really knows how the economy works, and each crisis is followed by an, "oops, let's not do that again."

WalterBright 10y ago
Milton Friedman wrote in "Monetary History of the United States" that the money was more stable when interest rates were set by the blind workings of supply & demand than when the Fed did it, and backed it up with charts and statistics.
- _jahh 10y ago
  https://en.m.wikipedia.org/wiki/List_of_recessions_in_the_United_States https://en.m.wikipedia.org/wiki/List_of_recessions_in_the_Un... Just a cursory glance at that will show that isn't correct. Prior to the fed you had panics every two years.
  - lingben 10y ago
    and looking outside the US, Australia hasn't had a recession in more than 25 years
- WalterBright 10y ago
  Here's the quote, from page 10: "As is clear to the naked eye in Chart 1, the stock of money shows larger fluctuations after 1914 than before 1914 and this is true even if the large wartime increases in the stock of money are excluded. The blind, undesigned, and quasi-automatic working of the gold Standard turned out to produce a greater measure of predictability and regularity—perhaps because its discipline was impersonal and inescapable—than did deliberate and conscious control exercised within institutional arrangements intended to promote monetary stability." Chart 1 is on page 4 and plots the x axis 1867 to 1960 and the y axis plots deposits and currency, and yeah, it's pretty clear to the naked eye.

by gdubs 10y ago

WalterBright 10y ago

Milton Friedman wrote in "Monetary History of the United States" that the money was more stable when interest rates were set by the blind workings of supply & demand than when the Fed did it, and backed it up with charts and statistics.

_jahh 10y ago
https://en.m.wikipedia.org/wiki/List_of_recessions_in_the_United_States https://en.m.wikipedia.org/wiki/List_of_recessions_in_the_Un... Just a cursory glance at that will show that isn't correct. Prior to the fed you had panics every two years.
- lingben 10y ago
  and looking outside the US, Australia hasn't had a recession in more than 25 years
WalterBright 10y ago
Here's the quote, from page 10: "As is clear to the naked eye in Chart 1, the stock of money shows larger fluctuations after 1914 than before 1914 and this is true even if the large wartime increases in the stock of money are excluded. The blind, undesigned, and quasi-automatic working of the gold Standard turned out to produce a greater measure of predictability and regularity—perhaps because its discipline was impersonal and inescapable—than did deliberate and conscious control exercised within institutional arrangements intended to promote monetary stability." Chart 1 is on page 4 and plots the x axis 1867 to 1960 and the y axis plots deposits and currency, and yeah, it's pretty clear to the naked eye.