Sunday, April 14, 2013

Milton Friedman, Currency Debaser

Paul Krugman is very good on Milton Friedman, and always has been. He recognizes Friedman for the Keynesian advocate of debasement of the currency that he was. Of course, Krugman also believes that Friedman should be given three cheers for this abusive monetary policy view, but that's another story. In a post tiled Milton Friedman, Currency Debaser, Krugman tells it straight:

Brad DeLong links to a Forbes piece by Tim Lee from last year that I missed, which in turn quotes Milton Friedman on the macroeconomic views that prevailed in the early 1930s:
Lerner was trained at the London School of Economics, where the dominant view was that the depression was an inevitable result of the prior boom, that it was deepened by the attempts to prevent prices and wages from falling and firms from going bankrupt, that the monetary authorities had brought on the depression by inflationary policies before the crash and had prolonged it by “easy money” policies thereafter; that the only sound policy was to let the depression run its course, bring down money costs, and eliminate weak and unsound firms.
Friedman viewed this as evident nonsense, and commended instead the then Chicago view that banks should be rescued, government should act to reflate the economy, and that there was a strong case “for the use of large and continuous deficit budgets to combat the mass unemployment and deflation of the times.”


  1. Speaking of currency and debasement, M2 growth has plummeted to under 2% annualized growth the last three months:

  2. Yes but.... the fundamental aim of socialism is......

  3. "The Economics of Control". That's what it's called. You cannot shame them. We should worry.

  4. I comment that Milton Friedman was a father, that is a starter, of the economic and political paradigm paradigm known as Liberalism, which began on November 22, 1910, when a handful of senators and bankers left Hoboken, New Jersey on a train to design the creature from Jekyll Island, that is what would become the US Federal Reserve in 1913. Wikipedia relates these included Senator Nelson Aldrich, Senator A.P. Andrew, Paul Warburg, Frank A. Vanderlip, Henry P. Davison, Charles D. Norton, and Benjamin Strong.

    Liberalism was strengthened when the US Dollar, $USD, UUP, replaced the British pound sterling as the world's reserve currency in 1945 with the introduction of Bretton Woods agreements.

    In 1971 Milton Friedman proposed the Free To Choose Floating Currency Banker Regime. It was embraced by President Nixon, who took the US off the gold standard and was able to fund the Vietnam War. The World’s Major Currencies, DBV, and Emerging Market Currencies, CEW, began to rise and fall, in respect to relative Nation Investment, EFA, and Small Cap Nation Investment, IFSM, opportunities.

    Liberalism’s Banker Regime was greatly empowered by the the repeal of the Glass Steagall Act, by the Gramm–Leach–Bliley Act of 1999, which was spearheaded by Representative Jim Leach, Senator Phil Gramm, and Robert Rubin.

    The robust stock market performance of the week ending March 12, 2013, is concluding an age of investment trust in the world central bank’s monetary authority. Fears are growing that the world’s central bank monetary policies will be unable to stimulate global growth and trade and corporate profitability, and fears are rising as well that Eurozone regional governance presents investment risk, specifically the fear that the Cyprus Bank Deposit Bailin will be used as a blueprint in other eurozone countries.

    Jesus Christ, through dispensationalism, Ephesians 1:10, is completing Liberalism, and is introducing Authoritarianism, an era characterised by trust in the diktat of sovereign regional leaders, such as the EU Finance Ministers, and sovereign regional bodies, such as the ECB. Said another way the age of investment choice is ending and the age of diktat is commencing,

    Through currency debasement, in particular the long term sell of the US Dollar, $USD, UUP, up until February 1, 2013, and recently the sell of the Japanese Yen, FXY, Money, that is Wealth, of all types has inflated in value. For example, World Stocks, VT, rose 17.6% in value in the last year. The US Federal Reserve Policies of Quantitative Easing whereby “money good” US Treasuries, TLT, were exchange for Distressed Investments, FAGIX, held by banks, assisted in inflating fiat wealth after the Financial Collapse of 2007 to 2008.

    Toxic Credit, consisting of Distressed Investment, FAGIX, Junk Bonds, JNK, and Senior Bank Loans, BKLN, as well as Currency Carry Trade Investment, ICI, have been the two great levers of Inflationism producing Peak Wealth, VT, Peak Credit, JNK, and Peak Major Currencies, DBV, on April 12, 2013.

    Under Liberalism, money was coined by Asset Managers such as BLK, WDR, EV, STT, WETF, AMG, with the provision of ETFs, and money was coined by the securitization of investments by banks, such as BAC, JPM, and DEXIA, in being primary dealers issuance of US Government Bonds, TLT, in Permanent Open Market Operations, POMO, injections, as often reported by Chris Vermeulen, and in provision of GNMA Bonds, GNMA, and Mortgage Backed Securities, MBB.

    Destructionism will be causing Liberalism’s two spigots of Liberal Finance to be turned off and run toxic. The first being, Toxic Credit, consisting of Distressed Investment, FAGIX, Junk Bonds, JNK, and Senior Bank Loans, BKLN, and the second being Currency Carry Trade Investment, ICI, will be terminating on the exhaustion of the World Central Banks’ monetary authority, and on fears of eurzone regional governance consisting of bank deposit bailins, capital controls, and new property taxes.