tag:blogger.com,1999:blog-3758330678390419129.post6534898959229513234..comments2024-02-13T02:39:22.756-05:00Comments on EconomicPolicyJournal.com: Bernanke's Christmas Gift to Obama Has ArrivedRobert Wenzelhttp://www.blogger.com/profile/14296920597416905488noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-3758330678390419129.post-8597872046596511022011-12-24T18:41:23.146-05:002011-12-24T18:41:23.146-05:00A little holiday humor: Here is the only (regretta...A little holiday humor: Here is the only (regrettably doctored) image of Bernanke's self-righteously smug, yet utterly clueless, face that I have ever been able to tolerate: <a href="http://www.theonion.com/articles/drunken-ben-bernanke-tells-everyone-at-neighborhoo,21059/" rel="nofollow">Drunken Ben Bernanke Tells Everyone At Neighborhood Bar How Screwed U.S. Economy Really Is</a>. It's MJWhttps://www.blogger.com/profile/02076754748980035075noreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-73811855915328643912011-12-24T13:09:54.809-05:002011-12-24T13:09:54.809-05:00"But at some point expectations flip and velo..."But at some point expectations flip and velocity reinforces money supply growth instead of suppressing its effect. When that happens, Katy bar the door!"<br /><br />But it's silly to just assume the fed will let velocity go out of control and keep the money supply growing. Notice how there's an inverse correlation between velocity and money supply growth the past 20 years.<br Desolation Joneshttps://www.blogger.com/profile/11372309955501857098noreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-81074327491624550992011-12-24T11:28:21.608-05:002011-12-24T11:28:21.608-05:00Why is there such a long lag between the reduction...Why is there such a long lag between the reduction of interest rates by the Fed and signs of inflation? George Reisman's section on money in his "Capitalism" cleared up the issue of money and expectation for me. It's the velocity. Velocity and expectations are highly correlated. Velocity stays low during a recession because of lagging expectations even as the money supply grows Roger McKinneynoreply@blogger.com