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> Monetary policy is not handled by the current political white house. Hasn't been for decades and never should be, ever. Right, which is why I don't think Kru

by bko 5y ago

> Monetary policy is not handled by the current political white house. Hasn't been for decades and never should be, ever. Right, which is why I don't think Krugman being a liberal has anything to do w/ taking the threat of unprecedented growth in money supply seriously. > "GOLD STANDARD!" arguments have long been settled by economists a century ago. US got off gold standard in 1971. Gold has been around since 40,000 BC. I don't think hard money has been settled. But that's besides the point. The question is whether you think there is a remote chance that increasing the money supply by 25% in one year could have negative economic distortions such as inflation. You can be for fiat currency but think that growing the currency 25% in one year is a bad idea.

bb88 5y ago
> The question is whether you think there is a remote chance that increasing the money supply by 25% in one year could have negative economic distortions such as inflation. I believe that's a perfectly reasonable question. Fortunately there are graphs which show the inflation rate before and after the US got off the gold standard. https://www.macrotrends.net/2497/historical-inflation-rate-by-year https://www.macrotrends.net/2497/historical-inflation-rate-b... Note that the inflation rate has pretty much stabilized since the 1980's. Before that the inflation in 1970's were due to OPEC policies largely (hence the national speed limit set to 55mph). Before that it was WWII. The transition to fiat currency happened in 1933 domestically in the heart of the great depression. And you can see that inflation was in fact wildly variable before 1933 -- with severe deflation in the midst of the depression as people hoarded gold rather than depositing it in banks. So effectively the US ran out of the ability to control the money supply. It's not theoretical either. Loss of control of the currency has been a sticking point for countries in the EU. GB never did accept the Euro -- largely because they would lose control of this. Spain who did join the EU had 40% unemployment and lost the use of monetary policy to try to alleviate that, etc. > I don't think hard money has been settled. Back in 2012 the Chicago Booth school of economics surveyed a good number of economists from freshwater and saltwater economists. Here are the results: https://www.igmchicago.org/surveys/gold-standard/ https://www.igmchicago.org/surveys/gold-standard/ My favorite response is this one: "Why tie to gold? why not 1982 Bordeaux?"

by bko 5y ago

bb88 5y ago

> The question is whether you think there is a remote chance that increasing the money supply by 25% in one year could have negative economic distortions such as inflation. I believe that's a perfectly reasonable question. Fortunately there are graphs which show the inflation rate before and after the US got off the gold standard. https://www.macrotrends.net/2497/historical-inflation-rate-by-year https://www.macrotrends.net/2497/historical-inflation-rate-b... Note that the inflation rate has pretty much stabilized since the 1980's. Before that the inflation in 1970's were due to OPEC policies largely (hence the national speed limit set to 55mph). Before that it was WWII. The transition to fiat currency happened in 1933 domestically in the heart of the great depression. And you can see that inflation was in fact wildly variable before 1933 -- with severe deflation in the midst of the depression as people hoarded gold rather than depositing it in banks. So effectively the US ran out of the ability to control the money supply. It's not theoretical either. Loss of control of the currency has been a sticking point for countries in the EU. GB never did accept the Euro -- largely because they would lose control of this. Spain who did join the EU had 40% unemployment and lost the use of monetary policy to try to alleviate that, etc. > I don't think hard money has been settled. Back in 2012 the Chicago Booth school of economics surveyed a good number of economists from freshwater and saltwater economists. Here are the results: https://www.igmchicago.org/surveys/gold-standard/ https://www.igmchicago.org/surveys/gold-standard/ My favorite response is this one: "Why tie to gold? why not 1982 Bordeaux?"