Can government print more money without causing inflation?

My side? What on earth are you rambling on about now? Monetarism was essentially destroyed by Thatcherism. That only eventually controlled inflation by destroying the economy. Clearly also you have no understanding of bastardised Keynesianism. The twin application of the Phillips Curve and IS/LM had naff all to do with Keynes. It was about finding orthodox agreement between microeconomics and macroeconomics. You're of course free to talk about the folly of the New Keynesians who effectively got a boner over rational expectations for mathematical ease. That might be fun!

 

You didn't make any points, just issued false claims and gratuitous personal insults. Again.

Which you indeed didn't. Which indeed proved me right and you wrong. Again.

No, I proved there was more than one accepted definition, which proved you wrong. Again.

Which proves you wrong. Again.

Thanks for proving to readers how unworthy your opposition is. Again.

 

Exactly, it's sterilizing the added liquidity by taking interest bearing notes in turn. It collects the interest for as long as it holds the notes, and if they need to reduce liquidity, they simply sell the notes, to folks that pay them for them.

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We are still fighting deflation. The Fed is doing enough to keep the 10 year positive, but not by much.

 

So, that's what the Fed was doing when it held interest rates so low for a decade, reinflating the real estate bubble and and kiting bonds and stocks to the moon? "Fighting deflation"? Somehow, all that deflation fighting tripled the value of the rich's investments, but barely budged the needle on working people's wages. Such a mystery.

To you, that is.

 

Why should we fight it?

There's constant inflation every year. What would be so awful about one year with some deflation instead?

 

If folks were operating out of savings rather than marginal debt, we probably could and the pain of deflationary cycles would likely build the character values of thrift and so forth.

Unfortunately, the world we live in is not structured like that, it's all leverage and fractional banking and deflation rapidly leads to waves of defaults and bankruptcy.

 

We had essentially open borders during that period and much lower tariffs which pits our workers against the 3rd world, often without our Labor and Environmental standards. American Workers suffered under that set of circumstances, certainly there was no wage inflation, which big business was very pleased with, but it sure sucked for us.

 

If everyone knew there was not going to be inflation, interest rates would be lower.

 

The 2 year note is yielding a 1/5th if a percent
The 5 year a 1/3rd of a percent
The 10 year, less than 2/3rds of a percent

Where do you think these yields would be if there was less fear of inflation?

 

Those yields are only so low because the Federal Reserve Bank is subsidizing them.

If, for example, the natural market rate would be 4 percent, but the Federal Reserve Bank is holding it down to 1 percent, then it basically costs the Federal Reserve Bank the other 3 percent to keep the interest rates down. This is paid for through inflation.
People don't realize that it's very expensive for a Central Bank to keep rates up or down.

Of course, in an economic malaise where there would naturally be deflation, the Central Bank can get away with causing inflation and no one noticing it, because the inflationary effect pretty much just overrides the deflation that would happen in prices. That's why wage levels can go down, but you never see much of a correlating drop in prices.

 

Zero content again. Of course, given you're reliant on Wikipedia, where else could you go?

This really isn't complex, but the inability to see it is revealing for the 'quality' of the thread. There is only one definition of inflation. You and the other fellow, showing your innocence, have only provided aimless comment over the mechanics of measuring. That is awfully mundane stuff, leading only to marginal changes in trends for a Conservative to obsess over (e.g. 'if measured inflation is 0.1% lower, perhaps we don't need the increase in interest rates').

The real important stuff is over the courses of inflation. We know that monetarism has as much credibility as trickle down voodoo economics. We also know that the likes of Georgism is as much use as tits on a bull. Do we have to rely on Marxist 'classical economics driven' analysis into conflict across factors of production? Of course not. The Post Keynesians offer the most insight, with their approach also challenging the very nature of the laws of supply and demand.

 

You seem to be very prejudiced against other schools of economics, Riever.

 

It's tough on savers. They can go long to try to get yield, but, if inflation does catch, you are stuck in long term low yield bonds. The other choice is to buy higher risk, but, if it blows up, you take a haircut, maybe even a scalping.

What do you think the Fed should be doing?

 

Nope. I embrace them. Once you do that you also can understand the crackpottery. Monetarism was derived from a false debate over the Phillips Curve (which had naff all to do with Keynes). Of course it would therefore be low powered.

 

<yawn> Well, I could be like you, and make false claims rather than true ones, and give no sources rather than credible ones.

I already proved that claim false.

Your claims continue to be reliably false.

Some post-Keynesians like Michael Hudson have a decent handle on monetary economics and inflation, others don't.

 

Deflation encourages people to save rather than spend, as their money will be worth more next year. Reduced spending means reduced demand, stifled economic activity, lower production, unemployment and poverty. Money's most basic purpose is to serve as the medium of exchange, and deflation discourages people from using it for exchange, so it contradicts the very purpose of money. That is one reason bitcoin will never be money: the more it is used, the more valuable it will be, and the more people will hoard it instead of spending it.

 

You've said nothing, again. Try critiquing cost-plus pricing (without using Wikipedia mind you)...

 

Agreed.

Another term for "reduced spending" is "increased savings".

You seem to view savings as LOST spending, and it's not, it's deferred spending.

In our current system, with the complete lack of savings to use to weather downturns, the Fed Balance Sheet and the Federal Deficit serves as our pooled "savings" system, the problem with this system is that the Federal Reserve and Federal Government DIRECTS the flow of those funds and that is an awesome level of unlisted constitutional power over us.

In a dispersed savings systems, there is a separate funding stream controlled by private citizens.

The reason we have little savings in this country is because of past Fiscal and Fed policy that has left our entire financial system dependent on Fiscal and Fed policy.

The more traditional dispersed savings is much more empowering to the citizen vs the Fed and Federal Government and much more resistant to external shocks.

Looking at it realistically, I don't think we will be able to make significant steps back toward that more resilient and personally empowering system until we are again wrestling with inflation pressure and we have an opportunity to bleed that pressure into private savings.

 

Doing less. Why do people view the Federal Reserve Bank as the solution to economic problems?
The government has a lot more control over the economy with how they choose to allocate spending. Half of everything the Federal Reserve does is in response to government budget deficits. Got to keep buying up Treasury bonds to avoid interest rates rising.

 

That's why the federal government should stand at rest and let the states go bankrupt -- to avoid printing so much paper fiat money -- to avoid having the whole country go into hyperinflation.

If a state doesn't want to go back to work let them solve their own financial problems in ways where they will have no choice.

 

Completely agree. The problem is that we have no savings, so are completely dependent on the Fed and Fiscal policy for funding, which gives those two entities a massive level of power over funding streams.

We have no savings because past stimulation was essentially converting savings to consumption and not just savings, but also investment. The reduction in investment puts downward pressure on increasing productivity and without productivity growth, wage growth is difficult.

I don't think we will have an opportunity to reverse all this until we complete the deflationary portion of this economic cycle and are again wrestling with inflation pressure. If we are smart, we will bleed off inflationary pressure by encouraging savings and reducing the Federal Deficit. While we aren't at that point of the economic cycle, we will be at some point, and I expect the Federal Reserve and the Federal Government are going to have mixed feelings about relinquishing that tremendous level of power over our lives.

I think this current time is a good one to prep for that coming conflict by lawfully asserting ourselves against any arbitrary exercises of government power.

We need the same interconnected web of non-profits engaging in law fare for Constitutionalism that the Left has for their causes from the Gender Array to Environmentalism.

 

Why don't you refer to evidence pinpointing stimulus for low savings rates and the wage-productivity gap? Good luck!

 

False. Saving decreases the velocity of money, so total spending is reduced. This should be obvious. If each person normally spends their money in one month, then one person waiting a month reduces the money available for others to spend, reducing demand, production, and employment during that month. Instead of being spent twice in two months, that person's saved money is only spent once.

You don't seem to understand that the only ultimate purpose of all economic activity is to enable consumption. Saving contradicts that purpose. If saved money was all automatically invested in increased production right away, you might have a point; but it's not, so you don't.

 

You've made $#!+ up again.

 

Still nothing! There seems to be a pattern.