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Dandoff, One thing is to print money because that is the only...

  1. 5,199 Posts.
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    Dandoff,

    One thing is to print money because that is the only way government can tax like, for instance, the gov in Zimbabwe. Another is to print money because the demand for money is there. If people want to convert their savings in the form of government bonds into money then the central bank can oblige without fear of creating inflation. Full stop.

    This is known since the thirties. All4one is starting to grasp this reality after several years of a firm bilief in hyperinflation, but you don't seem yet to have been able to even do a small step in that direction.

    http://bilbo.economicoutlook.net/blog/?p=24887

    You say that Japan has proved that money printing does not help. Again that was known since the thirties.


    Liquidity trap visualized in an IS–LM diagram. A monetary expansion (the shift from LM to LM') has no effect on equilibrium interest rates or output. However, fiscal expansion (the shift from IS to IS") leads to a higher level of output with no change in interest rates: Since interest rates are unchanged, there is no crowding out.
 
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