Bernanke led economy proving critics clueless

[DSGE]

As such, the presentation below doesn't fully represent what is going on in the adult mind of EdwardBaiamonte.

Being a wee bit generous there, aren't we?

 

[DSGE]

and Ron Paul's standard that fully complies with the rules of standard, not the childishly simplistic business cycle and gold standard.

we were on a gold standard in 1929. We did not follow the rules of the gold standard in place in 1929 according to Friedman and Bernanke.

You need to show how this logically follows into this:

If we had there would have been no Great Depression.

 

[EdwardBaiamonte]

Haha. It's a point on a business cycle is it? .

Definition of 'Business Cycle'
The recurring and fluctuating levels of economic activity that an economy experiences over a long period of time. The five stages of the business cycle are growth (expansion), peak, recession (contraction), trough and recovery

Read more: Business Cycle Definition | Investopedia


please note that a recession is but one of 5 stages (points) in a business cycle. Sorry

You asked me for the textbook definition. I gave it to you. And now you're refusing the textbook definition, which you insisted I produce, for a definition from Investopedia? You're an imbecile.

Parkin and Bade go on to explain: A business cycle is not a regular, predictable, or repeating phenomenon like the swing of the pendulum of a clock. Its timing is random and, to a large degress, unpredictable. A business cycle is identified as a sequence of four phases:
•Contraction: A slowdown in the pace of economic activity
•The lower turning point of a business cycle, where a contraction turns into an expansion
•Expansion: A speedup in the pace of economic activity
•Peak: The upper turning of a business cycle

Shall we continue?

 

[EdwardBaiamonte]

and Ron Paul's standard that fully complies with the rules of standard, not the childishly simplistic business cycle and gold standard.

we were on a gold standard in 1929. We did not follow the rules of the gold standard in place in 1929 according to Friedman and Bernanke.

You need to show how this logically follows into this:

If we had there would have been no Great Depression

this is conclusion of Friedman and Bernanke, something you'll study when you get to college.

 

[EdwardBaiamonte]

You referred to it as a business cycle in paraphrasing Ron Paul.

I referred to a business cycle but did not say a business cycle was a depression. Agreed?

So why don't we clear it up?

Do you think business cycles would still happen on the gold standard?

of course but with far less volatility

 

[DSGE]

and Ron Paul's standard that fully complies with the rules of standard, not the childishly simplistic business cycle and gold standard.

we were on a gold standard in 1929. We did not follow the rules of the gold standard in place in 1929 according to Friedman and Bernanke.

You need to show how this logically follows into this:

If we had there would have been no Great Depression

this is conclusion of Friedman and Bernanke, something you'll study when you get to college.

Unlike you, I've actually read A Monetary History of the United States by Friedman and Schwartz. So why don't you produce the quotes, from both Friedman and Bernanke, that explicitly say "if we had followed the rules of the gold standard, there would have been no great depression". Explicitly that.

Also, regurgitating the opinion of other people doesn't answer the question. The question was "show how this logically follows". So aside from finding the Friedman/Bernanke quotes, you can actually answer the question and show me that you properly understand the theory by explaining why it is that a strict gold standard would have prevented the depression.

And learn to use the fucking quote system. It's not rocket science.

 

[DSGE]

I referred to a business cycle but did not say a business cycle was a depression. Agreed?

So why don't we clear it up?

Do you think business cycles would still happen on the gold standard?

of course but with far less volatility

So why don't you explain to us why you think a gold standard smooths the business cycle, and I suppose first explain what you think causes business cycles.

 

[EdwardBaiamonte]

show me that you properly understand the theory by explaining why it is that a strict gold standard would have prevented the depression.

dear, I just taught you the difference between a business cycyle and a Depression. OMG!!!

Do you agree with Friedman and Bernanke; do you agree that an Obama/Sanders uber liberal Fed would be a disaster?

 

[DSGE]

show me that you properly understand the theory by explaining why it is that a strict gold standard would have prevented the depression.

dear, I just taught you the difference between a business cycyle and a Depression. OMG!!!

Avoiding the question shows me you don't actually understand this topic. I suppose you're content with just regurgitating other people's opinions rather than having to put in the effort of actually learning something.

Do you agree with Friedman and Bernanke; do you agree that an Obama/Sanders uber liberal Fed would be a disaster?

I'm a market monetarist.

 

[EdwardBaiamonte]

I'm a market monetarist.



Do you agree with Friedman and Bernanke; do you agree that an Obama/Sanders uber liberal Fed would be a disaster/

 

[DSGE]

I'm a market monetarist.



Do you agree with Friedman and Bernanke; do you agree that an Obama/Sanders uber liberal Fed would be a disaster/

Wasn't that self-explanatory?

Depends on what you mean by "agree with Friedman and Bernanke". You're claiming they said "if we'd stuck to the gold standard there would have been no depression", which is bullshit. You still haven't produced the quotes by the way. Friedman and Bernanke think about the business cycle as mostly demand-side phenomenon. Demand is nominal GDP, or PY. I know you're familiar with the equation of exchange, MV = PY. Friedman though V was stable, which we now know isn't true. He wanted to target M, the money supply, to prevent demand-side business cycles. Since we know V can change, market monetarists want to target MV, or nominal gdp. We want firm rules for a NGDP level target. None of this short run central bank discretion bullshit. That would be the part you like.

So yeah. You want to target M, I want to target MV.

 

[Toro]

I referred to a business cycle but did not say a business cycle was a depression. Agreed?

So why don't we clear it up?

Do you think business cycles would still happen on the gold standard?

of course but with far less volatility

Why?

 

[Oddball]

So why don't we clear it up?

Do you think business cycles would still happen on the gold standard?

of course but with far less volatility

Why?

In today's world, a far better distribution of information.

That coupled with taking away the ability of fiat banksters to pump up value bubbles, via extending interest at levels far below the point where natural market forces would have them, can't do anything but help the situation....Which would lead to a taxation system that wouldn't lend itself to politicians meddling in the marketplace and creating bubbles.

 

[DSGE]

of course but with far less volatility

Why?

In today's world, a far better distribution of information.

That coupled with taking away the ability of fiat banksters to pump up value bubbles, via extending interest at levels far below the point where natural market forces would have them, can't do anything but help the situation....Which would lead to a taxation system that wouldn't lend itself to politicians meddling in the marketplace and creating bubbles.

That all applies also to a price level target, an inflation target, an exchange rate target, an NGDP target, an M2 target. That's not at all specific to tying the monetary base to the quantity of gold. All that is is constraining the central bank with rules that they must follow.

 

[Oddball]

And what constrains politicians from printing up treasuries and the Fed from buying them (monetizing the debt), after they promised that they weren't going to do so?

 

[DSGE]

And what constrains politicians from printing up treasuries and the Fed from buying them (monetizing the debt), after they promised that they weren't going to do so?

How does a gold standard do that any better?

Also, it's illegal for the Fed to monetize the debt. If the government wants to pay for its debt with created money it needs to amend the Federal Reserve Act.

 

[Oddball]

You can't print up specie out of thin air.

What the congress and the Fed have been doing the last few years, viz. monetizing the debt, is illegal...Who's going to prosecute them?

 

[Oddball]

Sheldon Filger: Federal Reserve Begins Massive Monetization of U.S. Government Debt

The Federal Reserve Will Not Monetize The Debt? in [Market-Ticker]

Fed Treasury Purchases `Monetizing Debt,' May Spur Inflation, Hoenig Says - Bloomberg

 

[Oddball]

Nobody is going to prosecute them...That's who.

Absolute power corrupts absolutely.

 

[Toro]

of course but with far less volatility

Why?

In today's world, a far better distribution of information.

That coupled with taking away the ability of fiat banksters to pump up value bubbles, via extending interest at levels far below the point where natural market forces would have them, can't do anything but help the situation....Which would lead to a taxation system that wouldn't lend itself to politicians meddling in the marketplace and creating bubbles.

You might be right about the competency of those running monetary policy.

However, history disagrees with you. The economy was more volatile before we had the Fed than after.

And so does theory. It's not about information distribution. It's about meeting the demand for money balances. It is assumed by those who support a gold standard that gold will come to market to meet higher prices. That may be true over the very long-term but there is absolutely no reason to believe it is true in either the near or medium term. Gold has risen from $300 to $1700 over the past 10 years yet the amount of gold pulled out of the ground around the world is about the same as it was a decade ago. In dogmatic theory, this shouldn't happen, even though all in marginal costs have risen from ~$500 to ~$1000. Yet, in the real world, it does. Dogma often fails in the real world. More practically, when the economy grows, the demand for money grows. When the demand for money grows, the interest rate will rise. If the supply of gold is inelastic, as it often is, the real rate of interest will rise, which needlessly brakes the growth of the economy. The money supply should grow at the rate of the economy over the cycle. But gold does not necessarily do that. It certainly hasn't in the biggest bull market in gold of all time. That, in a nutshell, is why the gold standard is an awful monetary system.

Now, I concede that in the end, an awful monetary system is better than a catastrophic monetary system, which is what we may be running now.