From: Allin Cottrell (firstname.lastname@example.org)
Date: Wed Jun 23 2004 - 14:46:31 EDT
On Wed, 23 Jun 2004, Rakesh Bhandari wrote: > At 9:57 PM -0400 6/21/04, Allin Cottrell wrote: >> >> What are the consequences if G'span omits to do what, exactly? If he >> omits to consider the price of gold as such, nothing. > > Well the argument is about whether the commodity basis of money has > been transcended. My point is that non convertible money or even > irrelevance of gold does not prove that said basis has in fact been > abolished. Your point is not made by the observation that those reponsible for managing the money supply pay attention to the price level when making their decisions. That is a commonplace, and has nothing to do with whether "the commodity basis of money has been transcended". >> If he's willing >> to let inflation rip in the U.S. (say, monetizing Bush's deficits) >> there may be consequences. > > Well he seems to have accomodated federal spending. He has held interest rates quite low, but the degree of monetization of the federal deficit has been fairly modest: Year Federal Deficit ($b) Increase in M1 ($b) 2002 240.0 37.8 2003 414.5 78.0 Allin.
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