tag:blogger.com,1999:blog-2277215496195926573.post277277415690734240..comments2024-01-01T07:41:51.347-08:00Comments on RALPHONOMICS: Does the Financial Times understand the debt and deficit?Ralph Musgravehttp://www.blogger.com/profile/09443857766263185665noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2277215496195926573.post-55633994769384123012011-08-19T17:17:32.333-07:002011-08-19T17:17:32.333-07:00We live in unusual times. Individuals and govts ar...We live in unusual times. Individuals and govts are servicing high debt loads. Folks are not optimistic about the future. Many probably expect a double-dip recession. Isn't this why an increase in banks reserves haven't caused excessive lending? Under more normal circumstances it could present a bigger problem.<br /><br />One thing that's hard to understand is: where is all the price inflation coming from? If the money supply in the UK is stable (or at least not being lent out). I guess one thing is that the GBP has lost a lot of value over the last few years. That could be said to be in large part due to monetary policy of the BoE (i.e super low cash rate). However, IIRC, Mervyn King denies that the increase in consumer prices is due to monetary policy and is instead some sort of "one off" VAT increase problem only. Would you agree that the BoE is trying to keep the credit bubble inflated?Anonymoushttps://www.blogger.com/profile/06340403723350864929noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-42917406696331481682011-08-18T09:18:27.882-07:002011-08-18T09:18:27.882-07:00Read up about interest on excess reserves and then...Read up about interest on excess reserves and then re-read what you've said about the monetary base.<br /><br />Why print money when you can just get the Fed to stop artificially boosting the value of base money?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-57878180406084503152011-08-01T07:42:32.255-07:002011-08-01T07:42:32.255-07:00If inflation is too high, it is unlikely to be bec...If inflation is too high, it is unlikely to be because of "too much money". Too much demand might be a reason, but we're hardly there atm. The world needs demand and if Britain goes first, good for them as they're the ones getting a socially healthy market and cheap imports.Anonymousnoreply@blogger.com