We are undergoing the largest Paradigm Shift (cf Pinkerton 1990) in half a millenium. It is about then that Copernicus penned the Quantity Theory of Money, and electronic money is changing the way stuff is measured, and maybe
it has less friction. (Nondigital cashless currency: Sweden 1%, Euro 5%, USA 10%, USA distorted by foreigners holding cash abroad) Wenninger FRBNYQR 1987 showed M1 can't be measured. Partland FRBNYQR 1992 showed M2 can't be
measured. So Greenspan was called "Broad Money Al" (M3) in 1993 Economist caption before turning to pegging fed funds rate. But Sargent Wallace JPE
1975 showed pegging rates is destabilising. Well, maybe not in the 2-6%
range. Above it becomes a strange detractor of hyperinflation. Below it goes into the strange attractor of liquidity trap or secular stagnation (ZIRP and negative rates concealed as exorbitant bank fees). Once the Kagan
exponential velocity goes into the zero range, it's trapped. And who knows
what the real rate in the exponent really is, maybe it produces harmonics. Recently I have heard anecdotal evidence Velocity can't be measured. And how did we measure Y (GDP) before Keyenes, anyway? Perhaps a separation of variables is needed, maybe find a way to tease out population from income (GDP/capita times population), maybe treat supply times velocity (MV) as a single quantity. The Taylor rule is but the logarithmic derivative (elasticity) of the Quantity Theory constrained by the FRA 1913 requirement
of elastic currency. In the mid90s, about when Fourth Turning came out, Greenspan began worrying about deflation and brought in Ben Bernancke who worked with Vincent Reinhart (AER 2004) developed ZIRP/QE in case we become like Japan: GM, A&P and Greece all went bankrupt because of pensions (abortion); Bear Stearns went broke the day the first boomer retired. Electronic money is the future. THose who argue gold is the opposite of fiat money forget someone has to peg gold, which makes it fiat, too.



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Vasos Panagiotopoulos, Columbia'81+, Reagan, Mozart, Pindus
blog: panix.com/~vjp2/ruminatn.htm - = - web: panix.com/~vjp2/vasos.htm
facebook.com/vasjpan2 - linkedin.com/in/vasjpan02 - biostrategist.com
---{Nothing herein constitutes advice. Everything fully disclaimed.}---

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