{"id":54267,"date":"2020-07-19T10:24:44","date_gmt":"2020-07-19T15:24:44","guid":{"rendered":"https:\/\/olduvai.ca\/?p=54267"},"modified":"2020-07-19T10:24:47","modified_gmt":"2020-07-19T15:24:47","slug":"weekly-commentary-drone-money","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=54267","title":{"rendered":"Weekly Commentary: Drone Money"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"http:\/\/creditbubblebulletin.blogspot.com\/2020\/07\/weekly-commentary-drone-money.html\">Weekly Commentary: Drone Money<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">\u201c<em>In particular, to maintain downward pressure on longer-term interest rates, the Federal Open Market Committee (FOMC) likely will provide forward guidance about the economic conditions it would need to see before it considers raising its overnight target rate. And it likely will clarify its plans for further securities purchases (quantitative easing). It is possible, though not certain, that the FOMC will also implement yield-curve control by targeting medium-term interest rates<\/em>.\u201d Ben Bernanke and Janet Yellen, Testimony on COVID-19 and Response to Economic Crisis, July 17, 2020.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With highly speculative securities markets having fully recovered COVID losses \u2013 and Nasdaq sporting a 17% y-t-d gain \u2013 why the talk of more QE? And with 10-year yields at 0.63% and financial conditions extraordinarily loose, what\u2019s the purpose for discussing the pegging of Treasury bond prices (aka \u201cyield curve control\u201d)? Aren\u2019t the markets already conspicuously over-liquefied?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201c<em>Let us suppose now that one day a helicopter flies over this community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated.<\/em>\u201d Milton Friedman, \u201cThe Optimum Quantity of Money,\u201d 1969.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It was Dr. Ben Bernanke that, in the wake of the \u201ctech\u201d Bubble collapse, elevated Friedman\u2019s academic thought experiment to a revolutionary policy proposal. And in this runaway real world experiment, \u201coften repeated\u201d supplanted Friedman\u2019s \u201cwill never be repeated\u201d \u2013 and it changed everything.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201c<em>The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. <\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Weekly Commentary: Drone Money \u201cIn particular, to maintain downward pressure on longer-term interest rates, the Federal Open Market Committee (FOMC) likely will provide forward guidance about the economic conditions it would need to see before it considers raising its overnight target rate. And it likely will clarify its plans for further securities purchases (quantitative easing). [&hellip;]<\/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":[7756,16861,1849],"class_list":["post-54267","post","type-post","status-publish","format-standard","hentry","category-economics","tag-credit-bubble-bulletin","tag-doug-noland","tag-financial-markets"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54267","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=54267"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54267\/revisions"}],"predecessor-version":[{"id":54269,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54267\/revisions\/54269"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=54267"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=54267"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=54267"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}