I could do a blow by blow account of the exchanges on Twitter between Jonathan Portes, Simon Wren-Lewis and me concerning Labour's Fiscal rule last night. There would, I suspect, be little advantage. Instead I am interested as to why this difference has arisen, and why Labour finds itself stuck with such a wholly inappropriate policy, which Jonathan Portes says can hardly be differentiated from anything the LibDems or Osborne have said or done. Answering this question will, I think, also explain why Simon Wren-Lewis thinks I deliberately misunderstand him, which I most assuredly do not.
That reason can, I think, be found in something that another awkward macroeconomist, David Blanchflower, wrote in 2012 when he said:
In the summer of 2008, just before the crash of Lehmans, Olivier Blanchard, now chief economist at the IMF, published an NBER working paper entitled 'The state of macro is good', which made no mention of bubbles or any real world data. In it he argued that 'macroeconomics is going through a period of great progress and excitement' outlining what a typical article in macro looks like. No mention here of trying to test against data from the real world: calibration is just making things up because the model doesn't actually fit the real world.
"A macroeconomic article today often follows strict, haiku-like, rules: It starts from a general equilibrium structure, in which individuals maximize the expected present value of utility, firms maximize their value, and markets clear. Then, it introduces a twist, be it an imperfection or the closing of a particular set of markets, and works out the general equilibrium implications. It then performs a numerical simulation, based on calibration, showing that the model performs well. It ends with a welfare assessment."
I have no idea what haiku-like rules are. I have been especially struck by the totally ludicrous claims made by Chari and Kehoe who seem to have entirely missed the plot. If economics is not, what Harberger in 1993 called an 'observational discipline', it is nothing.
“Over the last three decades, macroeconomic theory and the practice of macroeconomics by economists have changed – for the better. Macroeconomics is now firmly grounded in the principles of economic theory”
As I noted very recently, this last point is what I think the Portes / Wren-Lewis rule to be. It is a rule written to re-establish the neoclassical economic order of central banks running monetary policy in pursuit of a form of financial stability that favours one very particular group in society, who are already very favoured because neoclassical economics assumes that they should be. That is its goal, from start to finish.
The haiku is the assumption that neoclassical macroeconomics is right, and that all that policy should be used to prove is that the theory must work. So, remembering always that Portes has said he doesn't do politics, let's look at this.
In essence, what Portes and Wren-Lewis have done with their fiscal rule is ask what does current macroeconomic theory say about fiscal rules? And they have noted that it says central banks should be independent; the control of inflation should be paramount; interest rates should be used to control inflation and fiscal policy should be avoided because governments should balance budgets, with the logic used being based on the microeconomic theory of the firm, even if that is wholly inappropriate in this case. Of course, I am simplifying, but that's it, in a nutshell.
And what Portes and Wren-Lewis are saying with their fiscal rule is that in reality we have an aberration at present from what theory suggests to be the norm. We are not in a state of what macroeconomics would think to be equilibrium as a result. And so, in standard macroeconomic style, as summarised by Blanchflower and Blanchard, what they do is add a twist to re-establish the norm. They suggest unlimited fiscal policy be used until inflation is induced which then requires that the independent central bank reclaim control of the economy by the use of interest rate policy once more. This is their plan in a nutshell. Again, I simplify, but not much.
But I do not accept that this is the goal of macroeconomics. That is what Simon does not understand. And that I do not think that this is the right-ordering of economic policy is so far beyond his comprehension that he thinks that for me to believe so is illogical.
Except it isn't. I don't believe in independent central banks. In fact, I do not believe we have ever had one. I have evidenced that. Simon worked for its creation. We see the world very differently.
Nor do I believe we need significant inflation for any reason, let alone to restore monetary policy.
And third, like Keynes, I believe in long term low interest rates. And by low, I mean very low.
And why do I do that? Because I think that to raise interest rates would trigger a credit crisis of untold magnitude in the UK, and beyond. And I cannot countenance that social cost. That's because I do politics.
And it's also because low interest rates help growth.
And low interest rates also stop the trickle (or flood) up of wealth: they are rents, after all.
Fourth, despite thinking this I think that full employment is the key to economic policy, and not inflation and interest rates, which are decidedly secondary in priority. By saying so I could not more resoundingly reject the Portes / Wren-Lewis view if I tried.
And fifth, I do not think my policy will produce lower growth in employment or more austerity as Simon claims. Far from it, in fact. There are, again, multiple reasons.
Start with the fact that focussing on interest rates is not the way to create employment. Focussing on employment does that.
And then note that seeking to create a boom, as Portes / Wrten-Lewis are doing, surely guarantees a bust, and austerity. And I really think we should avoid that.
But then also note that I do not think tax and spend and interest rates are the only tool in the armoury. As we now know we can also use QE. So we are not solely dependent on borrowing to balance budgets, and we are not dependent on the whims of markets as Portes / Wren-Lewis assume. Used properly for fiscal purposes, in association with a national investment bank, QE breaks the relationship between deficit funding and the whims of bond dealers, for good. But the Portes / Wren-Lewis rule ignores that fact.
So, I do not share their assumptions. That does not make me illogical as Simon claims. Nor should it be the cause for Jonathan Portes to sigh. Instead, it means I have a different argument with different aims and different policy instruments that I suggest would have different consequences.
So let's do the politics. What does Labour want? The Portes / Wren-Lewis variant on Osbornomics of Cableomics? Or a policy that targets full employment in a stable economy that is transformed by the Green New Deal for the long term well-being of this country by using the government power to create funds for this purpose, if that proves to be necessary?
I know which I want.
I hope Labour can see the difference. We should all be hoping that.
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When will Labour wake up to this neoclassical nonsense!
Central Bank has never been independent as you’ve stated.
People keep kidding themselves with this hatchet job of economic policy!
Excellent post Richard. The kicker for me regarding the Fiscal Rule (and as I think both you and Bill Mitchell have pointed out) is the fact – and I can’t think of a more politically relevant one – that despite a huge recession and the slowest recovery for centuries – the MPC didn’t find it necessary to reach the ZLB.
If the GFC wasn’t enough to trigger it, I wonder what circumstances Portes and SWL would imagine would have to occur before the City types of the MPC would hand over the reigns to a Labour Chancellor?
Adrian,
The ZLB needn’t be considered solely in terms of the BoE base rate. If we consider it terms of real interest rates, any rate that is lower than inflation is zero or negative.
Besides which any base rate that is 0.5% or lower is so close that is effectively zero because it leaves no further room for cutting if the economy requires an expansive measure.
I think we are at ZLB
@Marco (and Richard) – you’re right of course, and I understand that – but the point I wanted to make (and should have been more clear about) is the fact that the Fiscal Rule leaves it up to the MPC to decide what the ZLB is. We all may agree that 0.25% or 0.5% means effectively that the ZLB has been reached (and a future Labour Chancellor may likely agree too), but the policy as stated leaves this decision to the MPC and in 2016 they said this (from a link on Bill Mitchell’s blog):
“This package contains a number of mutually reinforcing elements, all of which have scope for further action. The MPC can act further along each of the dimensions of the package by lowering Bank Rate, by expanding the TFS to reinforce further the monetary transmission mechanism, and by expanding the scale or variety of asset purchases. If the incoming data prove broadly consistent with the August Inflation Report forecast, a majority of members expect to support a further cut in Bank Rate to its effective lower bound at one of the MPC’s forthcoming meetings during the course of the year. The MPC currently judges this bound to be close to, but a little above, zero.”
https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2016/mpc-august-2016
I agree – I have hinted at least at this in at least one post
Agreed.
“and by expanding the scale or variety of asset purchases”
Ah! so, that reinforces my suspicion about them going back to QE instead of suspending the fiscal rule
This is starting to get really interesting at the nitty gritty level. Thanks Adrian.
Now that the in-principle and philosophical differences have been aired. I think that these details are the thing that remain unresolved.
“Besides which any base rate that is 0.5% or lower is so close that is effectively zero because it leaves no further room for cutting if the economy requires an expansive measure.”
It’s quite interesting to consider what the consequences would be of pushing base rate into negative territory.
We’ve already seen some bonds going into negative rates and the sky didn’t fall in.
In a sense we are, in real terms, into negative rate territory any time the inflation rate exceeds the interest rate. I suppose it would only be enforceable below zero in an entirely cashless system – ‘Cashless’ as in there being no notes or coins – only digital transactions allowed.
The IMF issued a paper on this this week.
Just saying
You know you must be doing something right when Tim Worstall thinks that Portes and Wren-Lewis are ‘ real economists ‘ ( whatever that means ) and you are not .
What’s so astonishing about all these people ( and I include McDonnell and Corbyn ) is that they think they are ‘ realists ‘ . That the dogma they espouse ( the market rules everything ) is reality. And then just this morning I read that behind closed doors the government agreed a secret deal with Nissan to the tune of £60m . Where did that £60m come from then ? Yes that’s right the same place it all comes from – out of thin air.
Quite….
Trust Worstall to wade in! I have not looked…
I have little doubt that Portes and Wren-Lewis would rather do without the support of Worstall. Oh well, there had to be a bit of light amusement at some point.
I am immediately on guard when it is suggested that we need to ‘normalise’ interest rates. Interest is rent on currency. We allow banks (god alone knows why) to issue money by the mechanism of loans at no real cost to them and charge rent, in the form of interest on the money which doesn’t belong to them.
The appropriate price for this service is the administrative cost of doing it. (Which would allow for a profit if we choose to allow the business to be run in the private sector, though there seems no sound reason why that is a given) If we can’t keep inflation at zero, then it becomes necessary to allow a consideration in interest to make up for the currency depreciation from beginning to end of the life time of the loan. Current economic orthodoxy seems to agree that around 2% p/a is a desirable inflation rate, though why it is assumed that currency should be debased as a policy objective is somewhat mysterious to me.
Because we pretend that banks have money (and pretend that this is a heap of cash accumulated from depositors, and is real and tangible) we pretend that we are paying the depositors a consideration, in interest, for borrowing their money. Essentially this is the traditional building society or friendly society model which does not reflect the way banking works. Because, I think, most people believe this is how banking works (a household budget model) there follows the mistaken belief that the country as a whole works on the same (mistaken) principle.
It is this misprision that MMT seeks to dispel, and has so far gained insufficient traction in mainstream understanding. That includes, inexcusably in my opinion, mainstream economists, bankers, the entire finance industry and the bulk of politicians.
Small wonder the public doesn’t ‘get it’.
For anyone to pretend that economic policy is not politics is a laughable assertion. Or would be if it were funny.
….but that is the fiction that we live with.
And MMT is not an economic policy. Those who think it is politically prescriptive are wrong and simply ignoring the evidence of the manner in which the understanding of floating fiat currencies has been harnessed to promote a ‘neo liberal’ policy agenda.
Well that’s what I see.
Thanks Andy. Clear and concise.
Now I know you have issues with Bill Mitchell but you both seem to be on the same wavelength today. So disappointing that Corbyn and McDonnell are missing a very open goal. What will it take to shake the scales from their eyes? Is there anyone in the Labour Party who has the slightest interest or understanding of MMT? Corbyn was talking of a phone call with AOC a few days ago, did they discuss macroeconomics?
I doubt it….
Any word on our query about the fiscal rule and QE? Surely that can’t pass by without reply.
I don’t have a Twitter account and am not intending to get one as yet. Otherwise I’d ask them myself.
None at all so far
“…. QE breaks the relationship between deficit funding and the whims of bond dealers, for good. But the Portes / Wren-Lewis rule ignores that fact.”
That is not the only thing being ignored.
The thinking behind “independent central bank steers the economy through monetary policy” cannot be definitely proven, yet that is another fact they seem to ignore.
They also ignore the fact that it cannot be proven that high consistent deficits lead to inflation.
Yet, these are the paradigms on which the whole macroeconomic framework is build. Other potentially bigger problems get ignored (climate change, excessive balance of payment deficits, increasing inequality, high private debt) and do not feature in any of their models.
Excessive inflation, last a problem more than 40 years ago, still determines all their macro-economic thinking.
If current problems need to be solved, start with new paradigms. Let’s not tilt at windmills from the mid 70s with fiscal rules and excessive fear of imaginary inflation. Let’s start afresh.
MMT is a good starting point.
Agreed
So if Labour, under Corbyn , were to get elected , the City etc need have no worries , because with this Rule in place the horses won’t be frightened and they can all sleep soundly in their beds . Which presumably was the intention by Portes and Wren-Lewis. Nothing to see here, move on. But remember this : when the banks needed bailing out in 2008/9 Alistair darling INSTRUCTED Mervyn King to kick start QE . There was no question about the BofE being ‘ independent ‘ then . The trouble is whilst the fiction remains in place the politicians can always use the ‘ not me guv ‘ get out of jail card , and will.
John Hope says:
” There was no question about the BofE being ‘ independent ‘ then . The trouble is whilst the fiction remains in place the politicians can always use the ‘ not me guv ‘ get out of jail card , and will.”
And that is the underlying false premise we live with.
Gordon Brown announced the fiction of the ‘independence’ of the BofE to perpetuate the monetarist fiction that politics is subservient to the economy. Then had to tie his government in knots with complex finance initiatives to take public spending off the government’s accounts. We’re still paying for that crazy way of financing schools and hospitals even when some of them are falling apart and there is no come-back because the developers have vanished.
Central government claimed credit for the building programmes while the NHS and local authorities were saddled with exorbitant on-going bills to pay for it. When the finance sector needed bailing out suddenly there was no problem finding the money to do that.
This the deceit at the core of the Portes / Wren-Lewis plan
Spot-on Andy . You have encapsulated ‘ finance capitalism ‘. This isn’t the capitalism of making things . It’s the capitalism of finance rules no matter what. Brown was suckered in to this way of thinking because he couldn’t think for himself . It’s magical thinking . And this is where Portes and Wren-Lewis are stuck . At bottom this is neoliberalism – everything begins and ends with money . Except is doesn’t . I own a business . If I only based my business decisions on making money I wouldn’t have a business now . In the film ‘ Heist ‘ David Mamet has his Danny de Vito character say this ‘ We all need money, that’s why we call it money ‘. It’s a typical piece of Mamet absurdism , but that’s where we are with capitalism. We’ve conditioned ourselves to believe this nonsense and anything that doesn’t conform to that belief system is worthless except it isn’t . Portes and Wren-Lewis have swallowed this hook, line and sinker and sadly got the ear of those two old deadbeats McDonnell and Corbyn . Sorry, I wish it weren’t true .
“QE breaks the relationship between deficit funding and the whims of bond dealers, for good. But the Portes / Wren-Lewis rule ignores that fact.”
Several commenters have latched on to this telling statement. Given the extensive nature of the debate, I do think Portes and Wren-Lewis should be pressed to respond.
Richard,
A few points may need clearing up and as supportive as I generally am I don’t mind addressing these because someone less supportive probably will (here or elsewhere) and I’d rather get in ahead of them.
1. The first one being semantic but relevant nonetheless:
Where you say “As we now know we can also use QE”. A lot of people will take “QE” to mean sterilised Quantitative Easing as it is currently known and practiced and, technically, they’ll be right. Now I know that you qualified that by saying: “used properly for fiscal purposes, in association with a national investment bank”, but monetary financing done “properly” like that isn’t QE.
QE is QE and it sucks. So it may better to use the term, monetary financing or People’s QE if you prefer, not to be technically correct but just to make sure that you distinguish that which you are recommending from that which is currently practiced.
2. Re. this: “Nor do I believe we need significant inflation for any reason, let alone to restore monetary policy.”
Well there’s certainly no need to restore monetary policy but what do you mean by “significant inflation”? In this capitalist economy very low inflation is synonymous with low demand, stagnation and unemployment which is why economists like Baker and Krugman have argued for higher central bank target rates, 3-4% or more. Sub-target inflation rates get perilously close to deflation which can be catastrophic, especially so in the presence of high private debt levels. Speaking of which, inflation can also be useful to the extent that it reduces the real value of existing debts.
3. Re. this: “I believe in long term low interest rates. And by low, I mean very low” and this: “because low interest rates help growth. And low interest rates also stop the trickle (or flood) up of wealth”
Thus far the only significant growth that our regime of very low interest rates has helped has been the growth of asset-prices and the financialised casino of asset markets that comes with them. That hasn’t stopped the flood-up of wealth. It is the very mechanism that enables it – and that’s both post and pre-GFC.
Under this regime, low interest rates are the fuel of speculative bubbles and Ponzi financing. Unless you (or others) have a strong regulatory prescription that would bring that under control then that will continue to be the case into the future.
The Positive Money crew have one prescription (killing endogenous money) and hawkish monetarists have another (high interest rates). Those prescriptions are both quite unattractive in different ways and I’m certainly not arguing the case for usury but I don’t see that MMT has a prescription in this area. Maybe I’ve missed something. If not, its another vacuum that needs filling.
4. Finally, re this: ” I think that to raise interest rates would trigger a credit crisis of untold magnitude in the UK, and beyond. And I cannot countenance that social cost.”
OK, I’m going to pass on why I don’t think that we can stay on near zero interest rates indefinitely into the future except to say that it has something to do with the negative real interest rate implications (among other things).
And without getting too Marxist about it I will say that credit crises are an inevitable and somewhat necessary feature of capitalism as we know it. There is big, fat, asset-inflated bubble world out there that seriously needs correction and I for one would not seek to maintain the excessive value of those assets or the excessive wealth of their owners merely to avoid a correction.
You have said that you “cannot countenance that social cost”. Well if we take the housing market as one example I cannot countenance the social cost of having young and future generations of home owners forever being priced out of the market or forced to pay twice or three times as much as their grandparents did in median income terms. We can’t have achieve affordability without making homes cheaper and they won’t get cheaper without a crash or very steep downturn.
Admittedly, we could do things to alleviate the crash like protect the innocent by supporting mortgagors instead of bailing-out banks. We could reform finance and stabilise the economy in the future so that speculative crises don’t happen again but in the meantime I can’t see us getting out of the current stagnant malaise without a credit crisis and the slaughter of capital values – the clean-out and the opportunity that comes with it. The important thing is not letting the crisis go to waste.
Marco
Mostly fair
But the housing issue has to be dealt with by supply, not increasing interest rates
Interest is just too blunt a tool for almost anything
And very tired tonight – so excuse brevity
Richard
@ Marco and Richard – afraid housing supply is definitively not the housing issue as Ian Mulheirn has pointed out: http://www.progressivepulse.org/economics/another-dysfunctional-market-housing
The trouble is really too much bank mortgage lending driving up prices. Banks need old fashioned ‘direction’ …
Thanks Richard,
We are agreed re housing. It needs supply a well as reform of the regulations and tax breaks that encourage housing speculation. We are also agreed re. interest and monetary policy being ‘a blunt tool’. I’m not suggesting that interest should be the main tool of policy, not at all, but just that into the future we may need a bit of wiggle room where interest rates and inflation are concerned.
Mr Mulheirn’s article is very interesting, but I think there are a number of factors here that should be explored (not least taxation of land). In addition I did not notice (but may have missed) reference to the number of unoccupied properties or derelict properties. One reason builders wish to occupy greenfield sites is the cost of development. In spite of the ready access of utilities and services on brownfield sites they are often considered costly to develop or in undesirable locations (which should be fixable, but not discussed in the article). Often older properties come in small batches, not interesting to many developers, combined wit the fact that old properties are often very expensive to renovate (VAT is a factor), compared with new build (this requires fuller exploration).
My rather hasty conclusion is that it is not sufficient to pull out lending as the factor (over supply), but a much more thorough and nuanced solution is required: because ‘on the street’ it is all wrong.
Start with the fact that focussing on interest rates is not the way to create employment. Focussing on employment does that. Richard Murphy
Might I extend that to “Focussing on employment is not the way to create justice; focusing on justice does that”?
So when have government privileges for the banks ever been about justice but largely a means to obtain what is then, in essence, the public’s credit but for private gain?
Perhaps this will be totally obvious when nearly all jobs for humans have been automated away and only a relative few own the robots and factories? Then it should be obvious that how automation is financed should have been of paramount concern?
I’ve been following the discussion on Twitter and it’s very interesting. I think there are some important underlying questions here which haven’t been addressed in enough detail:
1) why do we need a fiscal rule (or rules) at all? The concept was only introduced into UK fiscal and monetary policy in 1997. Wouldn’t it be better to have a broad set of targets (full employment, avoiding boom-and-bust, environmental sustainability) and just work macro policy around those rather than having mechanistic rules?
2) why should fiscal policy only become the preferred instrument at the ZLB? Why not use fiscal policy as the primary tool all the time (with monetary policy in a supporting role) – this was the standard Keynesian orthodoxy of the 1950s-70s.
3) why should a government need to aim for balanced budgets (on current spending?) France hasn’t balanced its budget since 1974. So what? Does anyone actually care? Aren’t there more important things to worry about – inequality, environmental degradation, and so on? It would make more sense to have targets for (e.g.) the Gini coefficient, or CO2 emissions, that it does for the govt’s current budget balance.
Howard
1) No. I agree with you – see what i wrote this morning
2) Agreed, entirely
3) Agreed, entirely
Richard
Spot on, Howard.
@Howard Reed
Spot-on I think.
We’re being drawn into a discussion about dealing with symptoms and the precise dosages of a medicine that is probably ineffective, instead of considering the underlying disease.
It’s a classic tactic of controlling the narrative, and avoiding the issue.
Brexit has done this in spades.
Richard, I take issue with the idea that a Low Interest / Low Inflation environment is a good thing. I suspect that it is a disaster waiting to happen.
Why say this? We bought our current house in the 1970s, when inflation and interest rates were sky high. High interest rates limited the ability to borrow, and kept house prices in check. The first few years were difficult, but inflation soon made repayments affordable, and the real value of the capital we owed fell away. Effectively a form of debt forgiveness.
I would much prefer higher inflation (say 5%) and higher interest rates. It would impose discipline on borrowing and would allow the capital value of loans to melt away. The trouble with low interest/low inflation is that the capital value of loans never diminishes. It hangs around indefinitely, or until the next crash.
Are low interest rates really good for growth? How well does this fit with evidence of the last 10 years?
I can easily live with inflation of 3 to 4% if interest rates are net zero
Michael Green says:
” I take issue with the idea that a Low Interest / Low Inflation environment is a good thing. I suspect that it is a disaster waiting to happen.”
I don’t think this thing about inflation, which is debasement of the currency, makes any sense. It’s a merry-go-round where the result in the housing market, to take the example you use just gets silly. House prices keep rising relative to the currency and no-one is any better off in real terms except as a result of another buyer’s loss because they bought too late in the cycle of spiralling prices. I would have thought after four decades of this nonsense that it would be obvious that it does nobody any good.
Cue for a song? I’m forever blowing bubbles 🙁
This rising market condition is a speculator’s wet dream and the 2008 crash was mostly predicated on the (absolutely stupid) idea that house prices would keep rising for ever. If people assume that inflation will ‘forgive’ their debt they pay over the odds and the only way they are going to do that is by borrowing over their capacity to repay…unless we have inflation which will inevitably spiral out of control.
The price of a house is arbitrary, the value doesn’t change. A house is a house. (Le Cobusiere’s machine for living in)
It’s only the value of the money that has changed. The difference between the price and the real price value now is indicated by the size of the deposit required by lenders. They know the property doesn’t secure the debt.
Interest rates chasing inflation is like a Red Queen syndrome….you have to run to standstill.
Andy,
You seem to have confused consumer price inflation (the real economy) with asset-price inflation (financial markets).
There is a fundamental difference.
Although admittedly, housing is a bit of a grey area . With landlords its definitely asset-price inflation (bubble land) because they now regard houses as a speculative commodity. The rent that they charge their tenants however is supply & demand real economy. Rent is in the CPI.
Owner-occupiers are caught in a nether world between the two.
That said, the housing bubble is definitely asset-price inflation.
Marco Fante says:
“….. consumer price inflation (the real economy) with asset-price inflation … There is a fundamental difference.”
So there’s two different sorts of money then ?
Their money and our money. And It’s not related ?
I know that’s what we’re pretending is the case, but sooner or later we really do have to have two different currencies or they have to accommodate their incompatible values. Asset prices will crash or inflation will catch up and make up the price/value disconnect.
Andy, re. this:
“So there’s two different sorts of money then ?”
No, there is one sort of money and two expectations of value and price. There is the price of goods and services where the expectation is that a slow rate of increase is a good thing, preferably slower than the increase in incomes, and then there is the value of “investments” where a high rate of increase is well regarded especially by investors who want to make capital gains.
Yes, there is a “price/value disconnect” to the extent that the capital gains are often well in excess of real world fundamentals that relate to demand, consumer incomes, competition and the earnings of the business that is being invested in. Capital gains that outstrip the fundamentals represent a kind of unsustainable Ponzi value.
The disconnect is reconciled by a crash or correction in asset values . There is no need for “two currencies” and certainly no reason or likelihood that consumer inflation would “catch up” with asset values (thank God). With consumer goods there are no expectations of capital gain therefore no speculation and no bubble market. Thankfully, it just wouldn’t happen.
You knew that.
I agree – there is only one money
That is my quibble with the video I posted last night