{"id":42076,"date":"2018-12-29T11:38:56","date_gmt":"2018-12-29T16:38:56","guid":{"rendered":"https:\/\/olduvai.ca\/?p=42076"},"modified":"2018-12-29T11:38:56","modified_gmt":"2018-12-29T16:38:56","slug":"weekly-commentary-thoughts-on-liquidity","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=42076","title":{"rendered":"Weekly Commentary: Thoughts on Liquidity"},"content":{"rendered":"

Weekly Commentary: Thoughts on Liquidity<\/a><\/h3>\n
\n
<\/div>\n<\/div>\n
\u201cMoney\u201d challenged – and often confounded – economic thinkers for centuries. It functions both as a \u201cmedium of exchange\u201d and \u201cunit of account.\u201d Simple enough. Too often the focus has been how to use money to stimulate economic activity and achieve political gains. From my perspective, money\u2019s importance rests with its fundamental roles as a \u201cStore of Value\u201d and as the bedrock of financial systems. Unsound money has been a root cause of a lot of turmoil throughout history \u2013 including the monetary fiasco that collapsed in 2008. Yet concerns for the soundness of contemporary \u201cmoney\u201d these days are viewed as hopelessly archaic.<\/p>\n

My thinking on contemporary \u201cmoney\u201d has been adapted from a much earlier focus on money\u2019s \u201cpreciousness.\u201d Traditionally, money was precious either because it was made of or backed by gold\/precious metals. It retained preciousness only so long as its quantity remained carefully contained. Throughout history, the value of \u201cpaper money\u201d has invariably moved inversely to the quantity issued \u2013 fits and starts, enthusiasm and revulsion and, too often, a path to worthlessness.<\/p>\n

Today, \u201cmoney\u201d is largely electronic\/digitized IOUs\/Credit \u2013 but a special kind of Credit. Money is a perceived safe and liquid store of (nominal) value. This perception assures essentially insatiable demand. Unlimited demand creates a powerful propensity for over-issuance. Historically, monetary inflation ensured the Scourge of Inflationism. Monetary excess distorted flows to goods markets, setting in motion problematic inflationary dynamics in incomes, spending patterns and economic structure.<\/p>\n

Despite money\u2019s critical role within an economy, a consensus view on how best to define, monitor and manage the \u201cmoney supply\u201d escaped both the economics community and policymakers more generally. Too often, politics and ideology muddied already murky analytical waters. What is money these days, and how best to manage monetary matters? Does anyone even care \u2013 so long as the securities markets are strong?
\n\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Weekly Commentary: Thoughts on Liquidity \u201cMoney\u201d challenged – and often confounded – economic thinkers for centuries. It functions both as a \u201cmedium of exchange\u201d and \u201cunit of account.\u201d Simple enough. Too often the focus has been how to use money to stimulate economic activity and achieve political gains. From my perspective, money\u2019s importance rests with […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[7756,487,21339,536,23660],"class_list":["post-42076","post","type-post","status-publish","format-standard","hentry","category-economics","tag-credit-bubble-bulletin","tag-liquidity","tag-medium-of-exchange","tag-money","tag-unit-of-account"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42076","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=42076"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42076\/revisions"}],"predecessor-version":[{"id":42077,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42076\/revisions\/42077"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42076"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42076"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42076"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}