I’ve no grand ideological point to make here. But I think a lot of debate and commentary on monetary issues hasn’t caught up with the fact that we have permanently entered a brave new world in which there is no opportunity cost to holding money rather than safe short-term debt, whether we are at the zero bound or not.Interfluidity
There’s no such thing as base money anymore
Steve Randy Waldman
That is a grand ideological point, and the bankers don't want it drawn for fear it will undercut the rationale for the interest subsidy.
6 comments:
It's amazing how many of Warren Mosler's OLD points are being resurrected as new ones.
The past month of reading has reminded me of Helen Keller's famous plagiarism case. Being a smart person, she eventually dredged up reams of insights that took literally decades to filter up through her subconscious circuits. Once resurrected, the source of what took years to understand had been lost. Understandable, but at least some appreciate Warren's genius in kicking off so much of this.
ps: Maybe Warren's parents played Marriner Eccles and Abba Lerner tapes while baby Warren was asleep? :) Who knows.
Roger, AFAIAC base money=$NFA
Is that what Warren basically impies?
Interest rates are going to head negative, its their next step.
Straight up MMT. Hallelujah.
A few months back I laid out a similar view in a blog post, “Interest-On-Reserves Regime” Will Rule Monetary Policy For The Foreseeable Future (http://bubblesandbusts.blogspot.com/2012/08/interest-on-reserves-regime-will-rule.html). I reference a paper by Marvin Goodfriend, of the Federal Reserve, about Interest on Reserves and Monetary Policy that is a good resource on the topic.
"ps: Maybe Warren's parents played Marriner Eccles and Abba Lerner tapes while baby Warren was asleep? :) Who knows."
Or read Aristotle to him? ;)
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