I recently came across a terrific Bloomberg On The Economy podcast with James Sweeney and Carl Lantz on “shadow money” — assets which are used as the equivalent of money during the snowball of the asset bubble / artificial boom.
The problem Sweeney and Lantz identify is that the stock of money expands and contracts . . . → Read More: An important podcast on shadow money & the boom and bust cycle
(htlm link problems will be fixed when I am able to troubleshoot the issue)
A central part of Hayek’s macroeconomics has not gotten enough attention (although it has http://hayekcenter.org/?p=2954 has not been completely ignored; see also http://zerohedge.blogspot.com/2009/05/chasing-shadow-of-money.html In several places Hayek discusses how reiterative processes involving credit and debt in conjunction with assets valued across . . . → Read More: Hayek & Stephen Williamson on Money Bubbles & “Shock” Applification
“If I were responsible for the monetary policy of a country I would certainly try to prevent a threatening deflation, that is, an absolute decrease in the stream of incomes, by all suitable means, and would announce that I intended to do so. This alone would probably be sufficient to prevent a degeneration of the . . . → Read More: Hayek vs Deflation — Yet Again
“The direct effect of a bursting bubble on measured output is zero. Nor, by the way, is a fall in asset prices counted as a decline in the capital stock, which is in principle measured in physical terms.” – Paul Krugman
“It does not follow [from the fact that a disequilibrium generating inflation cannot be allowed to expand forever] that we should not endeavour to stop a real deflation when it threatens to set in. Although I do not regard deflation as the original cause of a decline in business activity, a disappointment of expectations has . . . → Read More: Hayek on the post bust secondary deflation — again
At about 10 or 11 minutes John Papola has an interesting bit on how Murray Rothbard and David Friedman answered Hayek’s challenge envision an inspiring liberal utopia. But the whole thing is interesting. Papola is one of the creators of the Hayek vs Keynes rap videos.
Reddit Replies from John Papola from John Papola . . . → Read More: VIDEO – John Papola answers questions from Reddit readers