I don't know if you are interested but I discuss some money supply theory in the end of the Euro Crisis book I wrote. I addressed correctly I think that the issue in Europe is insolvency and demand not liquidity, which is or was the view of the ECB. If you would like to see the arguments and explanations I made you can read them on page 49 onwards. The beginning of the book is a good primer to the extent of the debt and there is some analysis to indicate which countries might be next. It is available on Kindle instant download. http://www.amazon.com/dp/B007U9JJ0G
I don't have a problem with any of this. What you have written here reflects my own view. What i have a little problem with is understanding your paragraph I quoted earlier. Especially this sentence: "Quantitative Easing will have a more dramatic impact on the currency value than a reduction in the interest rate because it is a real term loss not an increase in the domestic money supply of one nation through credit expansion..." What do you mean by "real term loss"? To be very clear, I don't understand your argument in support of this: "Quantitative Easing will have a more dramatic impact on the currency value than a reduction in the interest rate..." To be direct: Is it because when the fed expands its balance sheet it is necessarily creating more fiat money? Is that always the case? What is the effect of the assets on the balance sheet appreciating in value and the Fed later selling them for cash at a profit?
No it is because there is an expectation that an increase in credit will be paid back in the future. QE is a sign that the debt will not be paid and that the currency in itself is in trouble and that could cause a investment shift. It basically undermines the currency as an investment vehicle. A lower interest rate does not necessarily do that.
Matter and energy are inter-convertible. It is not out of practically nothing. It is out of an unimaginable quantity of energy. In Western philosophy we believe in self determination. A person is in large part responsible for their own fate, or the fate of their offspring in specific cases.. This may not be true, or it may be sometimes true and other times not. In any case, this philosophy virtually guarantees that some people will go hungry. Some will starve.
Thank you. I don't know if I would agree with that. I'll have to think about it. I see QE as an exchange of a liquid asset for a less liquid asset. Not as a debt that will not be paid. Even though there is greater risk associated with the less liquid asset, the risk is countered by the opportunity for asset appreciation.
whatever, by hook or by crook, it's just a way to keep rates artificially low in hopes people will start buying houses again. If that's the best you got, I may go somewhere else
And, it seems to be working, The Fed is re-inflating the balloon, but this time they don't what it to leave the Earth's surface. Just puff it up a bit.
you have a lot of faith in the wisdom of man I'm kind of more natural Since that is what has been working for like 2 million years