Monetarism enters bankruptcy
By Henry C K Liu
The invasive dominance of monetarism in macroeconomics has been total ever since central bankers, led by Alan Greenspan, who from 1987 to 2006 was chairman of the Board of Governors of US Federal Reserve - the head of the global central banking snake by virtue of dollar hegemony - embraced the counterfactual conclusion of Milton Friedman that monetarist measures by the central bank can perpetuate the boom phase of the business cycle indefinitely, banishing the bust phase from finance capitalism altogether.
Going beyond Friedman, Greenspan asserted that a good central bank could perform a monetary miracle simply by adding liquidity to maintain a booming financial market by easing at the slightest hint of market correction. This ignored the fundamental law of finance that if liquidity is exploited to manipulated excess debt as phantom equity on a global scale, liquidity can act as a flammable agent to turn a simple localized credit crunch into a systemic fire storm.
1 Comments:
Obviously Henry C K Liu does not understand anything about monetary policy. systemic risk or Liquidity Trap.
The failure of monetarism comes from the fact that it does not take i account income/wealth distribution ad that it does not take in account the shape of the yield curve as a factor in mineral price induced inflation.
I had a high esteem for Henry C K Liu . I believe I found a flaw in his ideology.
If you want to understand economy you'd better read my tract:
A Specific Application of Employment, Interest and Money
Press release of my open letter to Chairman Ben S. Bernanke:
Sorry, Chairman Ben S. Bernanke, But Quantitative Easing Won't Work.
Yours Sincerely,
Shalom P. Hamou
Chief Economist & Master Conductor
1776 - Annuit Cœptis.
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