Replies to post #153273 on Zeev's Turnips Patch-No Politics (ZEEV)

[basserdan]

Taylor and everyone else should read Keynes and study economics before holding forth on the subject
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Will,
Is that in your humble opinion?

Why do you feel Keynes should be the final word on anything?

I do believe there are alternative schools of thought and one of my favorites is espoused here:

http://www.goldseek.com/news/RichardDaughty/1063903878.php

Btw, he is also bullish on gold. <GGG>

[Elroy Jetson]

Your excellent observations are why many brilliant economists such as Charles Rist and Ludwig von Mises stated the obvious:

the way to deal with financial bubbles is not to create them in the first place.

Expanding the money supply during deflationary periods to "stabilize prices" leads to financial bubbles - simple cause and effect.

Monetarists believe further monetary expansion and debasement should be used to treat the bubble aftermath - creating yet new bubbles.

Not one monetarist has yet explained what method they should use to stop chasing their tails.

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Two questions to basserdan

1. are you aware that banks had excess reserves equal to one fourth of the GNP during the depression and very little money was being demanded as loans from the banks?

2. do you know that Keynes did not believe banks could expand the money in the hands of the public if the public did nt borrow borrow, and he discussed "the liquidity trap"?

Taylor and everyone else should read Keynes and study economics before holding forth on the subject

[ardent jd]

Will,

For an alternative point of view, see this two year old video featuring Milton Friedman:

http://www.uncommonknowledge.org/00fall/526.html

(warning: it is 1/2 hour long, but well worth the time, imo)

It is mainly about government surplus and deficit, but he also devotes some time to addressing the shortcomings of the Keynesian approach. Among other things, he points out that Japan has tried large fiscal stimuli on at least four occasions during its decade long funk, with absolutely no success.