diametrics

[jonathankaplan]

in thinking about all the recent events politically in the US, in some sense, it comes down to two different themes. Centralism v. Federalism. ,Monetarists v. "Keynesians. So, on the second of those two themes, I was just curious where you all fall, simplistically.
Here's an easy poll.

Poll Monetarism v. Keynesians.

Comments appreciated.

Comments

[prock]

For what it's worth, monetarism is a naive perspective which emphasizes protecting wealth over any other social end. As such, it's not so much an economic theory as an ideology.

And of course, we all know what happens when you put a monetarist in charge of the Fed. Anyone who is a monetarist after the colossal bubble blowing of 1980-2006 isn't really a rational actor.

[prock]

And as evidence of my claim, it appears that Russian spammers are monetarists. :)

[jonathankaplan]

:)....I am sure that monetarism is more simplistic. I am not so certain on the word "naive". That belies millenia of history. Further, both of these economic doctrines are ideologies, it is just perspective.
Funny you picked 1980 as the first number of your date range. Pick 1970 (or 1913) instead, and the results look significantly different.
I prefer long term thinking whenever possible. Generational or more, if possible. In a generational sense, the concepts of Monetarism hold more water imo. Keynes had to rely on "in the long run, we are dead." to buttress is thinking.
IF the bubbles are about to become popped, I'd rather be a monetarist now than a Keynesian, for me.
Thanks!

[prock]

That belies millenia of history.

I'm not sure what this means. Price instability of currency is nothing new.

Funny you picked 1980 as the first number of your date range.

I'm not sure why that's funny. It's the beginning of the era of the credit bubble.

In a generational sense, the concepts of Monetarism hold more water imo.

I don't know what that even means.

IF the bubbles are about to become popped, I'd rather be a monetarist

How does an ideology promoting price stability of currency help you in a world where all the countries are in a slow motion race to the bottom for the most devalued currency?

[jonathankaplan]

I guess some of this comes down to one's definition of currency. My definition is, more and more, NOT pieces of paper but other fungible tangible things

[prock]

I guess some of this comes down to one's definition of currency.

uh... Better to stick to the classical definitions than to start making up new ones.

If you had picked 1970 instead of 1980, then owners of gold would have come out looking much better

Really? That seems a bit of a stretch. The number of people that bought in the 70s and who did not sell until at least 2006 is probably very small.

Every so often, every 50-100 years, rarely more, there is a crisis of paper currency and almost invariably, that paper ends up worthless.

True enough. That fact of life belies the monetarist premise that currency should be a store of wealth.

There is no major currency from more than a hundred years ago that still has anywhere near the value it had then. Except precious metals.

I guess. This is a function of using a commodity as a currency. A gold standard does not prevent the 50-100 year currency crises you speak of.

Only one currency is gaining in value. Gold.That's just an issue of supply and demand. When the global currencies

[prock]

Note, global money supply is actually somewhere around $50T, not $75T, so I guess we might get a bonus 1.5 cents of gold when we cash in our dollars, for a total of 4% of the face value.

[jonathankaplan]

when I look up "currency" HERE, I don't know that I have said anything wrong, in fact, it looks to me like gold might have a much longer and deeper definition as currency than anything else the world has endured

[prock]

"I DO say that currency, if it wants to be a more stable form of currency/exchange, should have more of a backing than just words from far away"

Given that value is subjective, fashion is whimsy, and needs are changing, stability will always be ephemeral. Sure you could back a dollar with a dollar's worth of gold. But what backs the gold? What guarantees that gold will remain stable and will neither become so scarce as to make backing impossible (as it has), or become so plentiful that it's value drops to less than water (all we need is a modern midas to perfect fusion).

In the end it doesn't matter if a currency is backed. It's just turtles all the way down."One thing I am saying. I would rather own precious metals (that have millenia of being useful currency) than pieces of paper that really only have a few centuries. And that is a different question than I originally posed

Maybe. It happens to be in a bull market.

[ext_736599]

Currency is whatever people say it is. Gold just happens to be the default that everyone goes to when they don't have any other bright ideas about what money should be