Macro Poll: The Dollar's Up: Is This Good Or Bad?

[ajoknoblauch]

(emphasis in above quote is mine)

Bkentfc, could you explain to us, please, what the bolded part above means? I'm not pursuing the Socratic Method, I'm genuinely curious what you meant, because I don't see how that works with a fiat currency, when a non-government reserve bank simply prints money at whim. I mean, we do all realise that the Federal Reserve in the USA, (and its equivalent in virtually every other nation), is not an arm of the US government, right? Yes, I saw the part right after the bolded section, but I don't see how you isolate the two, when the bankers run the Fed.

Since when is the Federal Reserve not an arm of the US government? http://www.federalreserve.gov/

 

[Bkentfc]

(emphasis in above quote is mine)

Bkentfc, could you explain to us, please, what the bolded part above means? I'm not pursuing the Socratic Method, I'm genuinely curious what you meant, because I don't see how that works with a fiat currency, when a non-government reserve bank simply prints money at whim. I mean, we do all realise that the Federal Reserve in the USA, (and its equivalent in virtually every other nation), is not an arm of the US government, right? Yes, I saw the part right after the bolded section, but I don't see how you isolate the two, when the bankers run the Fed.

Alright Red.Economic growth creates money demand as transactions are taking place on the micro level.The central bank can choose to match the demand by manipulating the monetary base to increase the amount/supply of money in circulation(not the same as printing money).This causes inflation but wages should stay the same as the aim is to maintain growth. Governments lazily print money to deal with balance of payments problems and paying off debt. This is disastarous as it eventually turns the economy upside down.Hope I was able to clear up what I meant by money demand causing inflation as a result of economic growth.

 

[Redpossum]

Alright Red.Economic growth creates money demand as transactions are taking place on the micro level.The central bank can choose to match the demand by manipulating the monetary base to increase the amount/supply of money in circulation(not the same as printing money).This causes inflation but wages should stay the same as the aim is to maintain growth. Governments lazily print money to deal with balance of payments problems and paying off debt. This is disastrous as it eventually turns the economy upside down. Hope I was able to clear up what I meant by money demand causing inflation as a result of economic growth.

(emphasis in above quote is mine)

Again, not trying to be a jerk, but can you explain, please, exactly how that bolded part works on the micro level?

 

[Joe]

Fiat currencies are the mother's milk of politicians. It allows politicians to hand out goodies to constituents (via money printing and/or debt issuance) and leave the bill to future generations.

It's also been instrumental in financing wars.

In financing the war (WWI) and abandoning gold, many of the belligerents suffered drastic inflations. Price levels doubled in the US and Britain, tripled in France and quadrupled in Italy.

http://en.wikipedia.org/wiki/Gold_standard#Impact_of_World_War_I

 

[Bkentfc]

(emphasis in above quote is mine)

Again, not trying to be a jerk, but can you explain, please, exactly how that bolded part works on the micro level?

Excuse the laziness Red. Look up Friedman´s theory of money demand. I know you dont like the bloke but its a theory that really does work in the real world.

 

[Redpossum]

Excuse the laziness Red. Look up Friedman´s theory of money demand. I know you dont like the bloke but its a theory that really does work in the real world.

This is something I do take seriously, so...

is this what you mean? -
http://en.wikipedia.org/wiki/Friedman%27s_k-percent_rule

or is it this?
http://en.wikipedia.org/wiki/Money_demand

or something else entirely?

 

[Bkentfc]

This is something I do take seriously, so...

is this what you mean? -
http://en.wikipedia...._k-percent_rule

or is it this?
http://en.wikipedia....ki/Money_demand

or something else entirely?

There you go Red the first link is a specific part of the general picture the second link explains; The formula Md = P * L (R,Y); where if the k-percent rule was adhered to, one would have to influence mostly P (price level) and R (nominal interest rate) as Y is exogenous.

 

[Rich One]

This is something I do take seriously, so...

is this what you mean? -
http://en.wikipedia...._k-percent_rule

or is it this?
http://en.wikipedia....ki/Money_demand

or something else entirely?

Milton F. is the Guru that engineered the Chilean success Model via the Chicago Boys. The basis of the Model remains until today with Bachelet, both Governments.

Some will say what success ? No FREE public Education? and the distribution of wealth is not inclusive? Well on the other hand Chile is rated as Numero Uno as investment Destination! etc.etc.

 

[germano]

Milton F. is the Guru that engineered the Chilean success Model via the Chicago Boys. The basis of the Model remains until today with Bachelet, both Governments.

Which also led to the Chilean economic crisis of 1982!

The fact that the model remains today is also a consequence of the undemocratic bi-nominal voting system (institutionalized with the Pinochet constitution) that has prevented the anti-Pinochet block (that Bachelet is part of) from getting the necessary majorities in the parliament so far.

Some will say what success ? No FREE public Education? and the distribution of wealth is not inclusive? Well on the other hand Chile is rated as Numero Uno as investment Destination! etc.etc.

You could also add the privatized retirement system, healthcare system etc. to the list.

 

[Rich One]

Which also led to the Chilean economic crisis of 1982!

The fact that the model remains today is also a consequence of the undemocratic bi-nominal voting system (institutionalized with the Pinochet constitution) that has prevented the anti-Pinochet block (that Bachelet is part of) from getting the necessary majorities in the parliament so far.



You could also add the privatized retirement system, healthcare system etc. to the list.

The Concertacion has had majority in congress for years. If Its so BAD why Chile rates so high in ALL indices???