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« A Note to RSS Feed and Email Subscribers | Main | Weighing the Week Ahead: Expecting too Much from Central Bankers? »

July 26, 2012



truth -- I get many offers for "guest posts" which I routinely reject.

I might make an exception for BB, but i would have to reveal him as the author!


The truth

Did Helicopter Ben write this?


John -- You are on target with your thinking. The monetary base has not translated into as much new money as we normally would expect - a low velocity.

Bernanke has stated that the base can and would be reduced quickly if circumstances changed.

Good point -- and something to watch.



steveo -- As I noted, the Fed sometimes points to market reaction as a measure of their success in helping the economy and/or restoring confidence. This is far different from the routine "Bernanke put" discussion of trader lore.

Meanwhile, how about an actual citation, preferably something from the meeting transcripts.



Many seem to critize the expansion of monetary base by central banks. But couldn't the central banks just as well shrink the monetary base if too much money becomes a problem?

I've been wondering this every now and then. My logic tells me that the one that has the ability to create money, also has the ability to "destroy" it.


The fed has plainly admitted that they prop up various markets, including and especially the stock market, although they temper their statement by "just not all markets at once". That this is even a matter of debate astounds me.

Rising gold will be a sign of falling dollar and rising fear.


Alt -- In a sense, yes. The Fed is responsible for the banking system. Exploding gold prices would signal excessive inflation.

So you may have it right:)



Vinz -- I have my copy handy. Do you want to provide a more specific citation?




Brendan -- You make a good point. Those with some expertise do get short shrift, although CNBC has some of them on. It is not zero.

It does seem worse than most areas, although Steve Liesman tries (when not being shouted down).

Interesting question---


alternative investments

We already know what the Fed has as their priority. Save the banks, keep gold price from exploding.

Vinz Klortho

The FED's mandates are:

1) Save the banks, no matter how irresponsible/criminal their behavior.

2) Allow the govt. to finance itself at affordable rates.

The other mandates mentioned are for the benefit of the masses so that they allow the FED to continue to exist.

Read "Secrets of the Temple" if you don't get it.

Vinz Klortho


You're a rational man Mr. Miller.

Doesn't it seem the quality of mainstream monetary policy analysis is even worse than other topics? It seems that the consensus view of ACTUAL monetary economists is not even represented in most discussions. Why so bad in this particular area?

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