Money Illusion in the Twenty-First Century The starting point for any consideration of inflation is that wages (and interest, profits, and rents) are prices. Every transaction has two sides, and one person’s price is another’s income. In the aggregate, leaving aside international complications, inflation can’t have either a negative or positive effect on aggregate real […]
Via Digby comes a couple short films talking about what is money. They are part of an effort by a group/site called We The Economy that has 20 short films aimed: to drive awareness and establish a better understanding of the U.S. economy. Told through animation, comedy, musical, non-fiction, and scripted films, WE THE ECONOMY […]
Ellen Brown from Web of Debt imagines a scenario close at hand. How accurate is it? Can They Do That? Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises […]
By Noni Mausa The Opposite of Bankrupt Some time ago I wrote about dollars as bizarre IOUs, with no names,dates or specific obligations. They are free-floating promises, whichcan be used to command the efforts of the other people who accept themas valid. I give you ten promises, and you give me a sack of potatoes. […]
As Brad DeLong has noted, Tim Geithner believes it is time for “the economy has now recovered sufficiently for government to begin to make way for private business investment.” In short, he expects “the private sector” to do the heavy lifting in these joyous times of economic recovery. Cynics among us—why, yes, that might well […]
Robert Waldmann Atrios vs Bernanke. OK so I agreed with Atrios about Greenspan (just below). Now I disagree with him about Bernanke. He equates loans with gifts. He equates worse than optimal with worse than nothing (dealing with free market fanatics can cause one to overlook the difference). Bernanke could have sent money from the […]
Charlie Stross talks about liquidity: What we’ve just seen, hidden in the euphemism here, is a confession that drug cartels and other organized criminals have gone on a $352Bn asset-buying spree — and the banks and regulators, world-wide, turned a blind eye to this because the alternative was to allow the banks to collapse. And […]
by Rebecca Ex post, it is obvious that the Fed was way too tight in the second half of 2008. To be sure, the FOMC was actively engaged in its standard easing policies; however, the Fed got the Treasury to aid in its sterilization efforts, and later the Fed fast-tracked the interest on reserves (IOR) […]
by divorced one like Bush Gather all around the camp fire and enjoy your marsh mellow toasting as I tell you the fable of the “The Guitar Player who sold his gear”. Long ago in a far away land of rock and roll there was a young man who played well. Not great, wasn’t going […]
Bloomberg Magazine, in “Unsafe Havens”. (Hat tip to Naked Capitalism.) reports that money market funds run by Bank of America Corp., Credit Suisse Group, Fidelity Investments and Morgan Stanley owned over $6 billion of CDOs with subprime debt in June. The reason this is a serious issue is that money market funds have a $1 […]