tag:blogger.com,1999:blog-3758330678390419129.post1367299661481562424..comments2024-02-13T02:39:22.756-05:00Comments on EconomicPolicyJournal.com: True Money Supply versus M2: Why Murray Rothbard Was WrongRobert Wenzelhttp://www.blogger.com/profile/14296920597416905488noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-3758330678390419129.post-28204213187128874982011-12-20T16:16:28.153-05:002011-12-20T16:16:28.153-05:00Yes, holders of money market fund balances would b...Yes, holders of money market fund balances would be very surprised to learn that they were not "money." They are certainly checkable deposits. They ARE savings, but in the form of money. Just as much money as are checking account demand deposits. Part of the proof is that they have yielded virtually nothing for 3 years or so, but people and institutions still hold them--because theyMdBnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-77439305269227815272010-01-24T17:41:49.693-05:002010-01-24T17:41:49.693-05:00I have replied to Peter's comment here: http:/...I have replied to Peter's comment here: http://tinyurl.com/yhlcyolRobert Wenzelhttps://www.blogger.com/profile/12653378186315529211noreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-34549159239300350302010-01-24T14:32:19.977-05:002010-01-24T14:32:19.977-05:00The Shostak/Salerno/Rothbard argument against incl...The Shostak/Salerno/Rothbard argument against including MM funds in the money supply is that when a person writes a check to a MM fund that amount of cash is withdrawn from their checking account, loaned to the MM fund, then loaned (by purchasing, for example, commercial paper) to a corporation, who deposits in their checking account. Therefore the same dollar can't simultaneously be "Peterhttps://www.blogger.com/profile/04453691463753177119noreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-69181715030051180222010-01-23T19:53:53.504-05:002010-01-23T19:53:53.504-05:00Isn't the end result simply that at worst the ...Isn't the end result simply that at worst the TMS number is underestimating the money supply, just not as badly as the M2?geoihnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-14225766697772901792010-01-23T17:49:09.852-05:002010-01-23T17:49:09.852-05:00Maven, I disagree. I consider any money I have in ...Maven, I disagree. I consider any money I have in a Money Market as liquid, but I no longer consider a MM fund as riskless. I am one of the (I think) many who "sweep" my money market funds in to Treasury Direct T-Bills and C of I instruments. They are completely liquid, because I can shift them back into the MM fund when I want to buy stocks or my checking when I pay a bill. I no longerRatherBFlyinghttps://www.blogger.com/profile/02471578548048724411noreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-41268419025243612162010-01-23T17:45:14.422-05:002010-01-23T17:45:14.422-05:00Lots of money market funds allow you to write chec...Lots of money market funds allow you to write checks against them, so they basically look like a bank account. I certainly think of my money that is in money market funds as available on demand, so as cash-equivalent, not investment/savings.thevisiblehandhttps://www.blogger.com/profile/04018067314843447018noreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-49206581155715347742010-01-23T16:24:15.174-05:002010-01-23T16:24:15.174-05:00"The shift started because of the financial c..."The shift started because of the financial crisis, as concerns about money market fund safety continued to escalate, individuals sought out a safer substitute."<br />I still think Rothbard had a point. Precisely because people leave money funds in droves shows they don't consider them a liquid instrument in times of crisis. And precisely that is what I would think is what I want CrisisMavenhttp://crisismaven.wordpress.comnoreply@blogger.com