Replies to post #117007 on Zeev's Turnips Patch-No Politics (ZEEV)

[Joe Stocks]

>>>But I was truly shocked to read over this weekend that none other than the same Milton Freidman has just recanted the central premise of monetarism. In an astonishing interview published in the Financial Times, the now 91-year-old retired professor concedes that “The use of quantity of money as a target has not been a success. I’m not sure I would push it as hard as I once did” (see “The Long View,” an interview with Simon London contained in the Weekend Section of the Financial Times, June 7-8, 2003). This is an extraordinary mea culpa for a man who single-handedly turned the macro policy debate inside out over the past 30 years. The founding father of modern-day monetarism is now telling us that the quantity of money doesn’t matter after all. Ironically, the admission comes at just that same point in time when the Fed is telling us that it’s all that matters. <<<

Interesting. I would think with all that has been seen in history that Freidman's new found conclusions are only logical.

[Joe Stocks]

" boasting repeatedly of the Fed’s possession of the unlimited ammunition of monetary creation as the means by which the anti-deflationary battle ultimately will be won."

I think just saying they can do it could be their biggest weapon. Maybe that's why they are doing the "boasting".

[jayhawk 5]

Thanks an incredible read on the girations that are taking place in our lives right now.

[mlsoft]

Dan...

Finally got around to sharing your Roach <gg>.

I am both glad to see him returning to the fold of doubters (it was getting lonely) and I highly recommend his comments for anyone who needs a little background of the economic theories now in play by the Fed (ultra monetarism, Friedman style) and the administration (supply side fiscal policy). I am a doubter of the efficacy of both in the aftermath of the bubble, either individually or in tandem, because neither touches on the real problem of the economy - excessive debt at a time of excess capacity and lowered demand.

Roach explains the background of the theories much better than I could and expresses his own doubt that the various global central banks will gain policy traction.

Highly recommended.

Thanks, Dan.

mlsoft