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Sunday, 4 January 2009

Fascinating? Scary more like.

Over at The Market Ticker, "Uh Oh..... Monetary Flat Spin"an article on Money Supply, diving and aerodynamics. Mark Wadsworth recommended it in a comment on Tim Worstall today.

1 comment:

  1. How scary it is depends on your point of view.

    It has always been known that
    a) Gummint spending beyond core functions and maybe a bit of redistribution has negative returns.
    b) There's only so far you can cut interest rates, i.e. to nil, beyond that you are pushing a piece of string see Jap Trap.
    c) If you are a net borrower and were hoping for massive inflation to prop up your nominal house price, it's a bit depressing, but what's bad news for them must be good news for savers.

    It remains to be seen whether that line can actually go below 1 in a significant way and for a significant period of time.