tag:blogger.com,1999:blog-8897997766931633186.post6918578515422283199..comments2024-02-14T03:21:37.506-05:00Comments on Monetary Freedom: Monetary Disequilibrium and Interest RatesBill Woolseyhttp://www.blogger.com/profile/06330232724290161369noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-8897997766931633186.post-77399965502848661992016-10-08T15:10:44.640-04:002016-10-08T15:10:44.640-04:00Goldie, I never really buy into borrowing money be...Goldie, I never really buy into borrowing money because that increases the risk too much, it always make us suffer badly. I always prefer to work with my own way and that’s far easier and manageable. I am fortunate that I get plenty of support with my broker OctaFX, It’s world class and have always benefitted me big time which is through their mind blowing features and facilities especially 50% bonus, so it gives me great push to work with.Aslamnoreply@blogger.comtag:blogger.com,1999:blog-8897997766931633186.post-47207084131749225252012-07-04T01:03:49.934-04:002012-07-04T01:03:49.934-04:00I think people borrow money to survive. With infla...I think people borrow money to survive. With inflation it is impossible for most Americans to save money. They live paycheck to paycheck and if there is an emergency like an illness, they have to borrow money as they cannot afford to take care of themselves. i had a tooth issue and if i didn't get it fixed it could have caused a heart attack. it cost me 3000 to get this gum surgery that wasn't covered by insurance. most people cannot afford to live.goldiehttp://goldprices247.comnoreply@blogger.comtag:blogger.com,1999:blog-8897997766931633186.post-11648374752541711502011-10-11T12:24:49.869-04:002011-10-11T12:24:49.869-04:00The assumption that people borrow to hold money ha...The assumption that people borrow to hold money has a lot to do with the general confusion of money and credit.<br /><br />Sometimes people say to me: "If there is really an excess demand for money, then why aren't people borrowing more!!?!"<br /><br />MMTers do this a lot, but it is implicit in a lot of "Keynesian" analysis too. It all stems from thinking about/modeling money as merely a zero interest, zero risk bond.Lee Kellynoreply@blogger.comtag:blogger.com,1999:blog-8897997766931633186.post-82391571251505639522011-10-11T11:52:09.648-04:002011-10-11T11:52:09.648-04:00Put it another way: Keynesian models always assume...Put it another way: Keynesian models always assume that people know their "current" income, and base their planned "current" spending and borrowing based on that knowledge. But if we borrow in advance of spending, that cannot be true.<br /><br />Or, OK, in your terminology, Keynesians assume that everyone engages in perfect instantaneous "cash management". But if people did engage in perfect instantaneous cash management, would anybody ever hold any cash at all? We hold inventories precisely because perfect instantaneous inventory management is costly.<br /><br />Sure, if people do eventually manage their cash, the hot potato might eventually disappear. But they are also revising their plans and expectations at the same time.<br /><br />Think about how we sometimes teach the Keynesian cross as a "slow multiplier", working itself out in real time. "The first round effect is a $100 increase in spending and income, then people adjust their spending as a result of the increased income, so we get an additional second round $60 increase in spending and income...etc.". The monetary hot potato is something analogous to that slow multiplier. I'm saying these processes take time. People are revising their expectations and plans, and we are off both the IS and LM curves most of the time, if either curve moves unexpectedly.<br /><br />If money itself pays interest, and if that interest rate adjusts to keep a constant gap between the interest rates on money and bonds, then the LM curve is vertical. Yep, only Y and P can then adjust to bring Md into equality with M.<br /><br />I've lost my train of thought. I wish I could think more clearly about this stuff.<br /><br />Thanks Bill!Nick Rowehttps://www.blogger.com/profile/04982579343160429422noreply@blogger.comtag:blogger.com,1999:blog-8897997766931633186.post-47386673194525225162011-10-11T11:27:30.376-04:002011-10-11T11:27:30.376-04:00Bill: "However, I cannot believe that Keynesi...Bill: "However, I cannot believe that Keynesians or New Keynesians really believe this."<br /><br />Well, they won't really believe it. But it does follow as a logical consequence of something they do believe.<br /><br />Grant me one assumption: that people who borrow to spend borrow the money *before* they spend it. I think that's mostly reasonable. But this means that the amount people borrow depends on their *planned* (near future) expenditure relative to their *expected* (near future) income.<br /><br />Keynesian models collapse the "near future" into the current period, by assuming no lag between borrowing money and spending it. And they assume that planned (current/near future) expenditure is always equal to actual current/expected near future income, in aggregate.<br /><br />So, in aggregate, people in Keynesian models never borrow to spend.Nick Rowehttps://www.blogger.com/profile/04982579343160429422noreply@blogger.com