3 ms·
The market for treasuries would exist exist without theed, since they're issued by the treasury. Why not set a limited quantity of dollars and have that be that
by boppo1 4y ago
The market for treasuries would exist exist without theed, since they're issued by the treasury. Why not set a limited quantity of dollars and have that be that, or a quantity that strictly grows at some pre-defined and predictable rate?
I'm familiar with the argument that people would theoretically hoard deflationary currency, I'd counter that people will always spend to eat and purchase shelter.
Calling shots like we are obviously isn't working and the only 'stability' seems to be a nominal one in asset prices. Everyone is otherwise bemoaning how broken the economy is. Great, we kept boomer pensions safe and quietly watched wage/salary earners' purchasing power erode. Seems like a false 'stability' to me.
- notahacker 4y ago> The market for treasuries would exist exist without theed, since they're issued by the treasury The market to exchange dollars for treasuries would not exist without dollars. Since we've established that it was OK for the Fed to "interfere" to create dollars in the past, it seems absurd to pretend that doing so if future is somehow different. > Why not set a limited quantity of dollars and have that be that, or a quantity that strictly grows at some pre-defined and predictable rate? Because that's even more arbitrary (it's still the Fed creating the monetary base, they're just delinking it monetary base from credit demand and ignoring the effects of the quantity of money on the economy) People aren't going to invest deflationary currency in productive enterprises to purchase food and shelter. They're not just going to invest it (and the rich don't need to spend very much of their wealth on food and shelter). Guess the proles will have to work harder for lower wages to make up for it. You think it's bad now....