4 ms·

Cash is a bond. From my perspective outside the USA, a dollar note is just a perpetual bond with 0% interest rate. Never a good idea to accuse others of not u

Cash is a bond. From my perspective outside the USA, a dollar note is just a perpetual bond with 0% interest rate. Never a good idea to accuse others of not understanding something.

adam_arthur 5y ago
Whether cash is a bond or asset is totally irrelevant. The subject at hand is, is the Federal reserve printing money and increasing the money supply? The answer is yes. Calling cash an asset and thus defining printing money as an asset swap is an irrelevant distinction to make. OP Implies the Fed is not increasing money supply, which is wrong.
- neilwilson 5y ago
  Everybody increases the money supply everyday. It’s normal - because money is an elastic concept. Trade credit increases the money supply. There is no distinction between any of it. It’s all credit in a unit of account
  - adam_arthur 5y ago
    Yes, credit is another mechanism to alter money supply. But you know the Fed has many levers to control this, such as fed funds rate, bank reserve ratios? It's part of their job to optimize these levers. Yet they choose to create moral hazard and unaffordable housing through excessively easy policy (supply chain disruptions anyone?) Demand has been artificially distorted far beyond baseline, is the core of the supply chain issues. If you looked at the actual economic data and retail sales, personal income numbers. Expansion of the money supply is not some magical thing that just happens in a totally free market fashion. If it were free market, the cost to borrow would be much higher, thus lower effective money supply, I assure you. The distortion of long term treasury rates is much worse than their distortions of short term rates. That's why they're so afraid to end QE. They know, if subjected to free market forces, long term treasury yields will spike and cause valuations to tank. Personally I think the Fed should stop focusing on the market. That's not their job

Cash is a bond. From my perspective outside the USA, a dollar note is just a perpetual bond with 0% interest rate. Never a good idea to accuse others of not understanding something.

adam_arthur 5y ago

Whether cash is a bond or asset is totally irrelevant. The subject at hand is, is the Federal reserve printing money and increasing the money supply? The answer is yes. Calling cash an asset and thus defining printing money as an asset swap is an irrelevant distinction to make. OP Implies the Fed is not increasing money supply, which is wrong.

neilwilson 5y ago
Everybody increases the money supply everyday. It’s normal - because money is an elastic concept. Trade credit increases the money supply. There is no distinction between any of it. It’s all credit in a unit of account
- adam_arthur 5y ago
  Yes, credit is another mechanism to alter money supply. But you know the Fed has many levers to control this, such as fed funds rate, bank reserve ratios? It's part of their job to optimize these levers. Yet they choose to create moral hazard and unaffordable housing through excessively easy policy (supply chain disruptions anyone?) Demand has been artificially distorted far beyond baseline, is the core of the supply chain issues. If you looked at the actual economic data and retail sales, personal income numbers. Expansion of the money supply is not some magical thing that just happens in a totally free market fashion. If it were free market, the cost to borrow would be much higher, thus lower effective money supply, I assure you. The distortion of long term treasury rates is much worse than their distortions of short term rates. That's why they're so afraid to end QE. They know, if subjected to free market forces, long term treasury yields will spike and cause valuations to tank. Personally I think the Fed should stop focusing on the market. That's not their job