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Cliff Asness Warns On QE-Blowback "Nothing Is Over Yet", Slams "Mostly Dishonest" Krugman
Excerpted from Cliff Asness Op-Ed, originally posted at RealClearPolitics,
Quantitative easing (QE) and other inventive forms of loose monetary policy have simply been less than hoped or feared. Some may declare Fed policy a great success as we're not in a depression, but they can't show any counter-factual, and given that this money has largely sat dormant, albeit presumably lowering risk premia (raising asset prices), it's likely we'd have a similar record-weak recovery with or without it. How this is a victory for one side of the debate or another is beyond me, but obviously clear to Paul and his back-up singers. Of course, it's also clear to Paul that the 2009 stimulus package saved us from this same second Great Depression (but more stimulus would of course have been much better). Yep, and if we traded good cash for just one more "clunker" we'd be growing at 5% per annum by now with a normal labor participation rate.
...
In a field without a broad set of counter-factuals we all stick too much to our priors and ideologies, and perhaps I'm doing that now. But at least I see it, and that's always step one. Paul [Krugman] is stuck on step zero (if he ever gets up to "making amends" I will be around but given his history he might never get to me). But, if you'd like to advance past step zero, Paul, we're still waiting on why Keynesianism failed to fix the Great Depression (no doubt not quite enough stimulus; just one more Hoover Dam would have done it, or, as they called it back then, "Dams for Clunkers"), strongly predicted a deep post-WWII depression, didn't predict stagflation, and generally was on a the downward spiral to the intellectual dustbin until the great recession resuscitated it, not as a workable intellectual doctrine, but as an excuse for politicians to spend on their constituents and causes.
Also remember, much like when the Germans bombed Pearl Harbor, nothing is over yet. The Fed has not undone its extraordinary loose monetary policy and is just now stopping its direct QE purchases. When monetary policy is back to historic norms, and economic growth is once again strong, a normal number of people are seeking and getting jobs, and inflation has not reared its head, I think we can close the books on this one, still recognizing that forecasting a risk and having it fail to come to bear is not a cardinal sin. But which one of those things has happened yet? Paul, and others, should by now know the folly of declaring victory too early.
...
So, to those who've been waiting for one of us to say it, you can have half the mea culpa you clearly want, but mostly Paul is wrong, and twisting the facts, and doing so as rudely and crassly as possible, yet again. The rest of the JV team of Keynesians who have also jumped on board are doing the same thing, just with more class and less entertainment value than the master.
Now for a real prediction: Paul will continue to be mostly wrong, mostly dishonest about it, incredibly rude, and in a crass class by himself (admittedly I attempt these heights sometimes but sadly fall far short). That is a prediction I'm willing to make over any horizon, offering considerable odds, and with no sneaky forecasts of merely "heightened risks." Any takers?
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I'm sensing a fumarole negative print of historic proportions. Say something bad about Putin and how oil prices are going to zero!
Hehehehehehehehehe....
You'll never top my singularities Scorpio weenie!
We have all been young. It's okay. You will find that insulting too, I know, still wanted to say it.
There is no winning, just connecting.
You are hurt. I am not interested in that.
I have a son, early college age. Mother is one of my identities, perhaps I am feeling the need to perform that one here. You will find that insulting too. That one is about me, not you.
This will kill you...I was the editor of a major journal in my own industry for 6 years. Not a copy editor, the person who advises on how to revise, how to interpret the reviews, or the one who has to reject them. Oddly the mother role comes up there too. You reject them well and they learn from it and come back later as better authors with articles that work.
We are all helping each other grow. Sometimes even when we are beating each other up.
Peace.
"You chastized me severely, but would not turn me unto Death . . ."
-30-
Is that from an old movie, too? I don't get it.
ZH is better than Viagra? Your wife is putting you up to this then, isn't she?
When you make your altar call, don't make this mistake (for you ignant fuckin' retards it's another john belushi movie clip)
http://www.youtube.com/watch?v=ujxDA9VsQG4
Settle down. It was a Freudian slip.
You have a life?
Never remember, never forget.
Wow MarsInScorpio, judging by the number of responses, and the responses thereto, I'd say yours is the most popular post today. Pay no attention to those red arrows - its just ink, right. Japanese ink.
Well, I had fun. What's the use of showing up at a Fight CVlub if there are never any fights?
Glad I got everyone's heart beating and their blood pressure up . . .
Have a good one.
-30-
You were great! He who fights and runs away lives to fight another day.
Run away!!!
https://www.youtube.com/watch?v=92gP2J0CUjc
'LOOK AT THE BONES!'
all the way back up the thread...
Respectfully Captain, so what?
-30-
Take TWO valium; and take the day off. you're STRESSED.
Mars, get over it. You missed it and are wrong. Laugh at yourself and move on. The more you try and cover the deeper the hole you are digging.
Dayum....this is the worst case of escape of the trolls I have seen on ZH in quite some time !
If you wanna be in the fight club you've gotta know the rules...
It's a well-known line from a well-known movie, you oblivious fucking retard.
The Main Street economy is pretty dead. I'm seeing a giant increase in "For Sale" signs again in the new house neighborhood on my way to work. Maybe 1 year old. I guess property taxes are eating them alive since some of those areas charge 3.5% on those $650,000 houses ! Yips!!
You add 2 or 3 kids, health insurance soaring, food soaring, etc and you get that well-known scenario:
"Houston, we have a problem."
Vegas has 50% vacancy rates at most malls including the strippers. Most will get the joke except for MARS!
Ebola becomes worse:
Doctors Without Borders: 16 staffers have been infected with Ebola, 9 have died
Latest:
http://tersee.com/#!q=ebola&t=text
According to the CDC, the CDC protocols are perfect so all these dead healthcare workers - you know, the ones seeing the effects of Ebola every day - must be idiots for 'breaking protocol'.
Send in the Army! Gas, gas, gas!
Doctors Without Hazmatsuits...
All these frontline ebola healthcare providers are heroes. I can't even imagine using a public toilet in Liberia... my anal sphincter could crack walnuts in such a circumstance...
Tee heee
He said step zero and amends.
Damn long range Kraut dive bombers and torpedo planes at Pearl Harbor. But at least the United States knocked out England once and for all - at least as a global reserve currency. And we also got a bunch of Kraut gold from their hidden vaults.
Krugman: If Martians attacked, we would have zero unemployment!
nmewn: Yeah Paul, because most of us would be dead and you and your fellow space travelers would be pointing to the outstanding employment opportunities in digging long trenches for the bodies.
No. Paul would be a zoo specimen in a cage masturbating for the Martians.
To Serve Krugman.
Spoiler: it's a cookbook.
LOLMAO! I really am laughing very hard. Hey, MARS it is a Twighlight Zone episode. I am just sayin'.
flinging shit
Snort!! That's right. I remember he wanted to spend hundreds of billions making stupid shit like "SRAPs"..... Saucer Resistant Ambush Protected vehicles to stimulate the economy. Nobel Prize for Comedy.
"Germans bombed Pearl Harbor"
Did I miss something?
(Sigh)
Generation Gap, what can ya do?
I think either we're failing at teaching or they just don't want to learn ;-)
I had a birthday a few days ago myself. We are both Libras. Happy birthday!!
Somehow I knew you were a Libra too ;-)
And thanks, when I was twenty I never expected to make it past thirty, so this is like a bonus...lol.
Add me to that club. Good company to be in.
Indeed. ;)
Not me, I'm a crab.
We? They aren't my children.
What? I read books. Some of us dont watch movies. I had to look it up. That will happen when you put 35 year old movie references in an article.
Never seen the movie, never will.
You should give it a try.
Its got all the trials and travails of youths trying to make there way and find about themselves & life, some partying, over zealous authority figures, young wannabe authority figures who crave power and even "folks" who just don't give a flying fuck.
A real morality play ;-)
Double post
That was quite a sales pitch.
Thank you for your non vitriolic reply.
I'll be honest, im not a tv/movie/sports guy. I keep this opinion to myself most of the time because it makes me look like an asshole to others needlessly. I look at movies and sports and tv as updated gladiator matches in the Colosseum. Distracted masses.
Most people i have voiced that opinion to took offense like i was referring to them as dumb or some nonsense. Which isn't the case. Dumb and distracted are two different things.
Cheers.
Hey, its cool. Everybody finds their own sources of escapism/entertainment, whatever works ;-)
Oh absolutely. I used to like those things back when. Example: last movie i remember seeing in the theater was Tombstone (great movie).
Life tends to kick people. I lost desire to participate in pop culture. Lot of people think I'm unhappy in general and anti social. I'm just intj as hell.
I'll close with a line from Tombstone:
"I don't laugh all day long like an idiot if that's what you mean."
"Nonsense, I have not yet begun to defile myself." ;-)
Why Johnny Tyler. You Madcap.
I'm your huckleberry, nmewn ;-)
And always remember. Sicilians were spawned by niggers...
Comedy gold again.
I don't think having the opinion that pop culture entertainment is soft propaganda designed to keep everyone distracted and dumbed down so we miss important things is "Comedy gold."
I also don't think not having watched a movie qualifies either.
Example: how many people still think Palin said you could see Russia from her porch, instead of why was actually said? The Diomedes Islands. A Saturday Night Live sketch has replaced reality. And lots of people here are pissy i don't want to be a part of that shit. Too bad. I don't like fleas. I watch where i lay down.
Maybe you'd be so kind as to explain why it's funny. I don't think it is.
+1
I mostly agree with you since I don't have a TV and don't care much for modern movies either unless it's Sci-Fi. You need some situational awareness when you post on ZH. The "Germans bombed Pearl Harbor" joke has been a staple on ZH for a long time. People reacted to your post mainly because it came right after Mars Scorpion's debacle. You handled it well and you didn't really get trounced too bad. Everybody gets trashed eventually as I know too well.
Im actually reading those currently. Guys pretty worked up. Very sad.
"I don't like fleas."
Down arrow for the anti-flea-ist!
Pro-Raid fogger for life!
Apparently, one of the greatest movies(comedies) ever made.....
Apparently. Unfortunately movies hold no appeal to me. Especially comedies. I might catch "The Green Berets" on a classic channel when the wife finds it, but that's about it.
Oh man, thats too bad, you should give it a go, there's boobies in it. Nice ones too! And a donkey.
I'm actually laughing. Thank you. The "And a donkey" closing got me.
Edit: why on earth would someone vote your comment down? Petty.
Yes,
https://www.youtube.com/watch?v=V8lT1o0sDwI
Thank you. I actually found that a few minutes ago when i looked this mishegas up.
The movie was great fun for those of us who were feeling our oats in the late 1970's. Time moves on, and much is lost in the generational translation. Best for neither generation to disparage the other. We're all on the same team.
I was young when the movie released. I'm more the dry humor type.
Simpson's hold a special spot with me (family member was involved with the show). I'll use them to illustrate my pov. There's a specific episode in which Homer removes a crayon from his brain. After that he attempted to watch a movie that resembled 'Runaway Bride.' If you ever see that episode, that is exactly how i feel just thinking about watching things like RunawayBride and AnimalHouse.
Cheers.
I think I remember that episode. Moe extracted the crayon, but in the end Homer hammered it back in to become the person he was more comfortable being.
I get your dislike for some things we "old" folks enjoy with nostalgia; but that doesn't mean we can't respect each others' tastes or chuckle at generational humor.
In my opinion, great humor is timeless. From Charlie Chaplin to Family Guy. I laugh at them all.
Animal House is clearly generational. But it's funny none-the-less. Except when we keep reading news about frats being shut down for their behavior in today's news. Maybe that which is old is really new?
I'm in my late thirties. I rejected the propaganda pop culture and walked away. I don't differentiate between generations. There is only pop culture, whether it be the Beetles, Roddy Pipers 'They Live' or (insert random rapper name here). It stinks sometimes, not being able to enjoy movies or even the idea of watching them. Isaid in another comment that i love 'TheGreenBerets' with JohnWayne. But even that's corrupted, I know now that those movies were used to sell the tonkin lie and help pacify a public who wants to think they're doing good. Pure propaganda.
Just a sense of humor - maybe you left it in your other pants? :-)
Watched the video. Still dont think it's funny. From my perspective, when you're raking someone over the coals, sarcasm makes you appear childish; especially when you're speaking about something important. If i wanted wit and entertainment i wouldnt be looking at economics blogs.
But whatever, to each his own.
It needs to be stated again, Most of are only here for wit and sarcasm. Because we have neither.
Im boring. I'm here for information. I'm one of those funny old timers that thinks sarcasm has a place in entertainment. I don't think politicians and economists should be entertaining. Informative, yes. World takes all kinds. Some people, when they get a ticket they fight it. Others pay the fine. Then there's "comedy traffic school." NTY, I'll take the test online and be done with it.
You are on double secret probation
You are on double secret probation
Im gonna go out on a limb and say thats a quote from the movie. My knowledge of that movie comes from this thread, a poster of Belushi and a Simpson's episode from the nineties.
Yes, the Germans bombed pearl harbor this afternoon cause we ain;t giving back their gold. If we continue to not give them back their gold, they fully intend to recall the Amish..
Keynesianism is the Great Common Denominator, a bitter Sainsbury widow trained to flush another 50 pence from any jaded consumer.
The vitriol present in this item and the comments is really over the top. Not within ZH standards of comity.
But some of it is deserved, as Krugman has a New York smartass style of writing that is often irritating.
If we can stick to the facts and concepts involved, it is clear that an easing program simply cannot be expanded indefinitely. It serves to offset short term fluctuations in the business cycle, but will not help correct long-term structural defects that we are now experiencing. It would be far more useful if we all concentrated on these problems and avoid the labeling and name-calling. In my opinion, the basic cause of our current conundrum is the essential tendency of capitalism to move towards monopoly, which no one seems to want to talk about, much less propose statutory remedies. Also, there has been a clear failure to enforce regulations in pre-existing statutes. This has to do with Rand/Greenspan ideological contempt for regulation, and has nothing to do with Keynes.
But isn't Keynesian dogmatism what brought on all the problems?
Lack of enforcement of regulatory statues is official policy now. Enforcing the law would put the big five banks out of business and that would crash the global economy into a new Dark Ages, so we're told. So they are above the law because of Keynesian Luddites on steroids who have painted everyone on the planet into a dark corner.
someone with a lot sense here,
unfortunately after the MarsinScorpio episode upthread, (I'm still clutching my stomach laughing), don't think too many people are in a mood for serious thinking anymore.
(although changing your first sentence to "fuck krugman" would probably have turned all those red arrows green, even if all your points remained the same).
but to your point, that's why we are where we are, and nobody likes where we are headed, no one is addressing those serious issues, most aren't even thinking about how to address them. Even half the people who rail against them, don't really have good answers. "hang the bankers and close the FED" may seem like a simple enough catchcry, but how to tame and contain the tendency for monopolies and giant corporations to occur without penalising and hampering the competitive nature of what's good about capitalism? that's just too hard a question for most to even think about.
The answers to some of those things goes far beyond just the regulatory framework or governing policies, the tendency of monopolies and giant corporations goes to the core of how the entire system is set up. and frankly, at this point, it seems we are beyond the point where we can change any of those things anymore. The corporate state is the future, the only choice up for grabs is corporate police state or corporate theocracy, or corporate xxx state...
CLIFF ASSHOLE IS ANOTHER CONSERVATIVE LIBERTARIAN RANT AND RAVE NOBODY
It is rather comical that Asness of all people would critique someone else for being mostly wrong, when he himself has been dead wrong over the past 5 years.
In the present politcal system and media, you only have to be minutely less wrong to be right.
Touché.
Being wrong over the past 5 years is largely the disease of those who built their careers on logic, price discovery, and behavioral understanding.
Overt and subjective monetary manipulation might make the smart look stupid over the short-term. And five years over the lifetime of investing is short-term.
Sometime, take the effort to time-slice the S&P 500 in rolling 5-year periods. Then measure your guesses against how insightful you think you are.
Asness did great work in coupling value investing with momentum. His thesis largely discredited Eugene Fama.
But, his call for the last five years was wrong (so far). So he should be forbidden to critique.
My take is if Cliff wasn't Conservative or Libertarian he'd be cheerleading this clusterfuck. Krugman lies so much he publically disagrees with his own textbooks and 'nobel' papers.
STFU.... low brow. capitals.
Call him Assness if they pump this fucker to another all-time high.
Krugmanite is an elemental tool who is paid too much to admit he is wrong.
But his fellow traveler WH economic advisors who left in failure and disgrace due to the failed economy briefly showed the graph, before it was yanked, that the economy would have been much better off if they had done nothing at all. The economy turned out worse than their dire predictions for the economy -- without their interventions. The mangled the economy. That's as close to an admission as we'll ever get; that, and they all got canned.
Gate keeper
It should be point out that according to Moody's Analytics the $823 billion stimulus program would boost the economy and create 450,000 new jobs per month. For those that don't remember the vp of economics at moody's was one of obama's top advisers on the economy and the stimulus program. You no longer can find the pdf fiction piece produced by moodys in support of the stimlus program.
It should also be pointed out that in 2008, Krugman asked for a stimulus program between $550 and $623 billion dollar in a NYT's piece, but got $823 billion instead. So now Krugman and all the little people that supported Obama spend most of their time writing fiction books about Obama being the great and wise leader.
Most people don't know this, but there is no Nobel Prize for Economics. There is only a Nobel Memorial Prize in Economic Science because everyone before 1968 understood that economics was not is and still is not a real science.
Where is Chas Caldwell?
Keynes in a nutshell: A) more govt spending in economic slow times, and B) less govt spending in economic good times. Of course, part B of the Keynesian framework was conveniently forgotten right about the same time Nixon shitcanned the dollar.
And, anywho, that's why Krugman sucks. He's intellectually dishonest. How he keeps a straight face...I'll never know.
Let me put it in an even smaller nutshell:
"Let's do the easy things first and the hard things later."
Standard procedure for every lying scumbag politician since the dawn of men.
+100
I am a Ph.D. chemistry, I spectate on economics. I denounce the pros who coexist in SILENCE with the public ignorance of these so-very-instructive histories
http://patrick.net/forum/?p=1223928
You are beneath ...
Well, now that yopu are worn-out hating on me, you can hate on Krugman.
Seems there is a lot of hate in here - never really noticed it before tonight.
Oh well, see all of you tomorrow . . . for another exciting adventure of Fight Club!!
-30-
Thanks for the warning.
So stay away Ralph - people come, people go around here; the posts go up regardless.
-30-
yopu? Who are you calling yopu?
May we dance wif yo dates?
Truly ZH needs and IGNORE function to sanitize and discourage the recent influx of Trolls..
Paint it, the Epic Fail in your idea is that the person you ignore doesn't know he or she is being ignored. It dowsn't exist in that person's reality, so it will do nothing to discourage anyone.
Try again . . .
-30-
If you really want to know about mistakes, you should ask your parents.
Are you trying to illustrate their childishness to them by acting like them? Because thats why you're doing; acting like them.
My weak defense to your reasoned argument is "This is Fight Club"!
Ohhhh, palahniuk. +1
You just hit my gspot. Great author. Absolutely gifted with words. Survivor is probably my favorite book of his.
ZH is based on Fight Club. Tyler Durden is the moderator, "On a long enough timeline the survival rate for everyone drops to zero", etc. There was an editor here we all remember who went by "Marla".
Oh that i got. Only been here a year, but that ones hard to miss.
So... your ego leads you to believe he was speaking of you. Kudos for the egocentric comment. Delusions of grandeur are comforting to the delusional. Until reality levels the field.
Minge, obviously, you missed his previous comments to me. Being blind to reality is not something you should brag about. Sorry you lack discernment.
-30-
Awesome use of logical fallacy in a discussion. I award you no points and may god have mercy on your soul.
Jeeeeesus Fucking Christmas Christ....pardon this dick swinging fest...
Back on topic....
FUCK PAUL KRUGMAN UP THE ASS WITH A RED HOT POKER....
PAY SOME HOMELESS GUY TO DO IT....
NO TROPHIES....NOT THIS TIME....
TROPHIES ARE FOR THE WANKIN FUCKIN BANKER CUNTS TO COME...
ok...back to your fucking off-topic dick fight...
I'm getting a neckbeard vibe from you.
“The neckbeard is a feature of the slovenly obese, that stereotypical virginal denizen of teh intarwebs who lives in his parents’ basement at age 25+ and despite his college education, works a menial, low paying, low stress job, perhaps as night manager of a grocery store or phone tech support.”
Sounds about right.
It's the arrogance and thesaurus-based posts. I can almost see the tight pants and Buddy Holly glasses.
At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it.
Yay, i know one!
http://www.youtube.com/watch?v=WAOxY_nHdew
I didn't because I can't get through Adam Sandler movies (except Happy Gilmore).
That was one from the tail end of my youth.
Paint it? Are you going hard into the paint?
And don't call me Francis.
Krugman makes it hard not to overly dislike lib Jews. Moodys was nudged by U.S. attorneys not to downgrade U.S. credit rating and S&P was sued for daring to question the "good faith and credit" of the U.S. Since then Moodys has been very "cooperative" with its ratings.
I think a new theory will emerge that says printing money can cause deflationary pressure, as more and more people struggle to "save" and "hoard" dollars as they are printing new dollars in mass.
The reason being that as they print, the dollars buy less, and the public instinctively starts to hoard currency trying to save or conserve spending for a future date.
Thus leading to deflation.
A 1% rise in prices may induce an individual to save and hoard 5% of their earnings , leading to mass deflation.
Thus you have QE with a strengthening dollar!
Hey Dre,
There is a good chance I should not answer this, so I will put it as a question instead because I know I don't know for sure. I am not an expert.
Is what you are talking about a "velocity" of money issue? In other words, just because the money is there is not good enough. It has to move through the system. Slow is less productive. Fast is more.
Classic theory would say the printing makes people spend because the money will be worth less tomorrow. That has more dollars chasing goods in the existing system, bidding them up.
But if all the money being printed is being held by rich people in their "portfolios" it is not in circulation (Ronald Reagin, trickle down theory style) or motion in the economy. It is stimulating nothing. So they print more hoping the next round will kick start real productivity. But the loans only get made to the elite, who have assets that can be claimed, not regular folks who are in too much debt already. And regular folks are not a good gamble to give loans to because there need to be jobs for folks to have to enable them to pay off the loans.
No money moving may look like a stronger dollar in a snapshot. In a dynamic picture, it is getting readier and readier to blow all the time. And that blowing will be inflation.
Deflation, strong dollar, first; then inflation, weak dollar; or even hyperinflation, failed dollar is my guess. As more and more can't pay their bills, they become nonpreforming assets which then create margin calls in the system. Those margin calls will result in a series of sell offs, then crazy buying, then loss of faith, then we are off to Weimar...
Yes, the velocity of money is the key as to whether you have inflation or deflation. In a stagnant economy all the money printing in the world isn't going to help because no one wants to put it to work in the main street economy, so it ends up on bank balance sheets where it fosters speculation. The "printing" of money, in and of itself, has almost nothing to do with the velocity of money. The economic conditions determine that. In a "you didn't build that" economic environment, with more businesses closing than opening and precious little "bread winner" job creation, what you get with loose Fed policy is (in effect) "pushing on a string."
That's why Asness & Co. were "wrong" about the current Fed policy inducing inflation. They were thinking the economy was going to recover and the velocity of money would pick up, producing inflation. But, as during the Great Depression, when Roosevelt's anti-capitalist big governmentism kept the economy from recovering, so too has Obama's anti-capitalist big governmentism kept the economy from recovering today. You don't get inflation during a depression.
People like Krugman refuse to acknowledge that because they support the anti-capitalist agenda of the leftists. It's why they focus on demand rather than supply. And it is why they are wrong about everything...
This wasn't addressed to me; so I"m butting in, I guess. This question you pose is extremely difficult. I've been studying it in its various forms for 5-6 years; the books and the people who live in the real world, who have something worth listening to on the subject are always on my activities list; what the Fed has been doing has been compared to trying to fill a swimming pool with a garden hose. There's been a lot monetary values written down by the system after 2007-08. Also the actual mechanism they use; buying things like Mortage Backed Securities, and just stuffing them in their portfolio; while it does prevent deflationary collapse; is obviously not inflationary. It's important to remember that the fundamental problem in this country is Globalism; Bill Clinton signed a bill into law in 1980, giving China Most Favored Nation Trading status; you can google that phrase if necessary. This was done because elements in Congress and He, were bought by Corporate Mulitnationals in order to get the American wage earner "back in line". The workers had been getting too much of the corporate profits; from the point of view of the owners; slaves are always best. This too is a falsehood, Henry Ford doubled the wages of the his assembly line workers; because he understood that the working class, to be simplistic, has to be able to buy the product; or it's all just headed downhill. The USA became a wealthy powerhouse for several reasons, and no one of them is explanatory; but one aspect was called the "American System" which involved tariffs to protect American Industry; actual producers. from foreign competition. Earning power, or economic value, basically comes from manufacturing. It's called "value added", (to the raw materials). Ignoring the monetary system, for the moment. So Globalism, which translates into English, as give all your money to China and then die; is the root problem. Getting back a little closer to your original subject; I believe the monetary, or fiscal, system; is a good example of a complex system, and it's not possible to predict outcomes; beyond the obvious; that you can't create a prosperous country by issuing Federal and State, and individual debt. Your example of a scenario is certainly possible; so are several others. The interesting thing about Precious Metals is that they actually react to "fear and loathing" more accurately than to classic monetary inflation; and they tend to be a win-win investment. The reason I recommended you change your retirement account to the US Bonds, electable selection, is that there's a lot of evidence that Bonds will continue to be bid up for the next year or two; and the dollar will be relatively strong; obviously, it's "Measured" in a relative, non real, way. This conclusion is not obvious but real deep analysts who hang out in the real world, not in academia, have convinced me this is the most probable course.
To sum up then; belief that the current Fed Policies are "immediately"; or short term inflationary betrays a shallow and inadequate study of the question. A "Recovery" of the economy is out of the question; as is "growth" in the present, "designed to fail" policy we live under. Meanwhile, we have plenty of consumer price inflation ! But of course, it's not caused by increased economic activity; and it's really hard to see where an increase in the velocity of money would come from.
As far as the large scale, "monetary inflation" goes; we export to China. What happens after that process matures a little more; is once again; difficult to guess at; they seem to be preparing to defend their purchasing power by owning Gold and Silver; and a lot of basic real assets. There are scenarios in which they release, wittingly, or un-wittingly, an inflationary surge into the USA. And other scenarios where they don't.
MarsInScorpio ruined this thread. Asshole. What a waste of my time.
Animal House aside, and though ZH has tendered tastier cuts of meat, it is important to continue to throw jabs at Krugman.
I don't know if Krugman really believes what he writes, or if he is a shill actually working for those who own the printing presses, but his policies are poison. Not only harmful, not only deleterious to liberty and the real economy, but obviously so.
The more significant question is why so many take him seriously. I'd suggest in part that the Left has conflated sound economic analysis, hell, sound accounting and math, with their political worldview - just as the legal analysis on the Left generally reduces to deciding if something is "Constitutional" primarily by deciding which outcome most comports with the way they think things ought to be {usually as to ever-growing federal governmental power}.
The public debt will, in all likelihood, simply never be paid - certainly not in full. Even so, Krugman's ideas are absolutely inane, and the most troubling part is that he and his ideological fellow travellers are absolutely immune to apprehending or understanding contrary evidence.
And they presuppose that private central banking, and the fractional reserve checkbook creation of fresh fiat is both ineluctable and the best a free society could come up with.
Nothing to do wih left. It's all just propaganda. All warfare is based on deception.
Good comment, Duffy Duck.
The Elite will use any theory. Keynesian or whatever, just to do what they actually require to protect their own investments.
theories does not matter. so is krugman. he was another tool whom the elite described as "columnist for New York times", when he stepped out of line during the ASEAN monetary crisis.
but when the Elite needed him as mouthpiece, he suddenly became Nobel price winner. since then Krugman had never been able to think about what he is talking himself or the actual economic situation.