How many people agree with MR/MT theory described on the forum

Other discussions not related to the Permanent Portfolio

Moderator: Global Moderator

Post Reply

Do you agree with MT/MR advocates on how money and debt work?

Poll runs till Fri Jul 06, 2057 5:03 am

I agree
14
41%
I disagree
8
24%
I don't know and I don't care
12
35%
 
Total votes: 34
Kshartle
Executive Member
Executive Member
Posts: 3559
Joined: Thu Sep 22, 2011 4:38 pm

Re: How many people agree with MR/MT theory described on the forum

Post by Kshartle »

Gumby wrote:
Mdraf wrote: Let's try again.

Let's say you can buy 300 eggs for $100. Instead of buying eggs you buy a T-bond in May 2013. In September 2013 you sell that T-Bond for roughly $90.  Can you buy 300 eggs for $90  or not?
No idea. It depends on the market price of eggs in September. :)
Mdraf wrote:What happened to the vanished $10?
A portion of the $10 you got back in the form of coupon payments and the rest of the $10 is a drop in the value of the asset between May and September.  On the actual day of the transaction, the sale does not raise or lower your net worth (i.e. purchasing power).
The point is the asset swap is not equal because the bonds fluctuate in nominal value and cash doesn't. MDRAF tries everyday to point this out unsuccessfully. 

And as the treasury issues more bonds and the supply outstanding increases (all other things equal) the nominal value will drop of the bonds (supply & demand) but the cash created to buy does not. It's not an even swap like my $100 for your $100.

I think I've stated your point correctly right MDRAF?
Gumby
Executive Member
Executive Member
Posts: 4012
Joined: Mon May 10, 2010 8:54 am

Re: How many people agree with MR/MT theory described on the forum

Post by Gumby »

Kshartle wrote:The point is the asset swap is not equal because the bonds fluctuate in nominal value and cash doesn't. MDRAF tries everyday to point this out unsuccessfully. 
And we keep pointing out that it makes no difference because the net amount of financial assets on the bank's balance sheet does not change after a POMO/QE transaction. The bank is no richer or poorer from one minute before the transaction to one minute after the transaction. The amount of deposits remains constant. And it makes zero difference to account holders who have no idea that their deposits are held as cash rather than bonds.
Kshartle wrote:And as the treasury issues more bonds and the supply outstanding increases (all other things equal) the nominal value will drop of the bonds (supply & demand) but the cash created to buy does not. It's not an even swap like my $100 for your $100.
Umm... You have it backwards. The Fed is removing bonds from the private sector with a QE transaction. That means too many reserves and not enough bonds. Price of bonds goes up, since more banks want them.
Last edited by Gumby on Fri Sep 20, 2013 12:00 pm, edited 1 time in total.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
User avatar
moda0306
Executive Member
Executive Member
Posts: 7680
Joined: Mon Oct 25, 2010 9:05 pm
Location: Minnesota

Re: How many people agree with MR/MT theory described on the forum

Post by moda0306 »

Mdraf,

First off, most monetizing is done on the short end of the curve, so the fact that these bonds hav some variability in value is a pretty moot point.

Further, it doesn't matter if something can wiggle in value, if the swap occurs at FMV a the time of the swap.  Especially since this swap is occuring within the banking system (not guys like you and me) where the governent pays them .25% on reserves anyway, which is more than the damn bond they sold back to the government.

If I woke up tomorrow and realized my TLT was sold for cash at FMV, I would wonder what the hell happened, but I wouldn't feel any poorer or richer in any real or nominal way.

If I woke up tomorrow and somehow I had $100 Million in T-bills sitting in my TD Ameritrade account, I am one. happy. sumbitch.  I just gained $100 million of fiat purchasing power.  Now bonds might not be my favorite asset, but I'll be able to turn those things into whatever I want VERY quickly, whether it's gold, stocks, land, a Ferarri, a mansion, or all-of-the-above.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."

- Thomas Paine
Kshartle
Executive Member
Executive Member
Posts: 3559
Joined: Thu Sep 22, 2011 4:38 pm

Re: How many people agree with MR/MT theory described on the forum

Post by Kshartle »

Gumby wrote:
Kshartle wrote:And as the treasury issues more bonds and the supply outstanding increases (all other things equal) the nominal value will drop of the bonds (supply & demand) but the cash created to buy does not. It's not an even swap like my $100 for your $100.
Umm... You have it backwards. The Fed is removing bonds from the private sector with a QE transaction. That means too many reserves and not enough bonds. Price of bonds goes up, since more banks want them.
Wait, when the treasury issues bonds and borrows money there are fewer bonds in circulation?

Read my comments before commenting on them please.
Kshartle
Executive Member
Executive Member
Posts: 3559
Joined: Thu Sep 22, 2011 4:38 pm

Re: How many people agree with MR/MT theory described on the forum

Post by Kshartle »

Kshartle wrote:
Pointedstick wrote: If you were right, the USA should have experienced widespread capital flight and hyperinflation already due to our high taxes.
Right about what?
Mdraf
Executive Member
Executive Member
Posts: 458
Joined: Tue Aug 23, 2011 5:54 pm

Re: How many people agree with MR/MT theory described on the forum

Post by Mdraf »

Kshartle wrote:
Gumby wrote:
Mdraf wrote: Let's try again.

Let's say you can buy 300 eggs for $100. Instead of buying eggs you buy a T-bond in May 2013. In September 2013 you sell that T-Bond for roughly $90.  Can you buy 300 eggs for $90  or not?
No idea. It depends on the market price of eggs in September. :)
Mdraf wrote:What happened to the vanished $10?
A portion of the $10 you got back in the form of coupon payments and the rest of the $10 is a drop in the value of the asset between May and September.  On the actual day of the transaction, the sale does not raise or lower your net worth (i.e. purchasing power).
The point is the asset swap is not equal because the bonds fluctuate in nominal value and cash doesn't. MDRAF tries everyday to point this out unsuccessfully. 

And as the treasury issues more bonds and the supply outstanding increases (all other things equal) the nominal value will drop of the bonds (supply & demand) but the cash created to buy does not. It's not an even swap like my $100 for your $100.

I think I've stated your point correctly right MDRAF?
Yes. And now since they cannot possibly bring themselves to agree they are changing the subject - again.
Gumby
Executive Member
Executive Member
Posts: 4012
Joined: Mon May 10, 2010 8:54 am

Re: How many people agree with MR/MT theory described on the forum

Post by Gumby »

Kshartle wrote:Wait, when the treasury issues bonds and borrows money there are fewer bonds in circulation?

Read my comments before commenting on them please.
Look, unfortunately you're wrong when you say...
Kshartle wrote:And as the treasury issues more bonds and the supply outstanding increases (all other things equal) the nominal value will drop of the bonds (supply & demand) but the cash created to buy does not.
...because the cash is created to buy bonds at the next auction. When the government issues a Treasury Bond, and you buy it with cash, the Treasury is simultaneously spending newly printed cash into the private sector. In other words, every dollar of new Treasury spending results in more new dollars to buy the next round of Treasuries at auction.

To summarize, the Treasury creates excess reserves in the banking system (when it spends) and Treasury Auctions drain those excess reserves out of the banking system. It's just a giant circle of reserves going in and out of the banking system.
Last edited by Gumby on Fri Sep 20, 2013 12:16 pm, edited 1 time in total.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
Kshartle
Executive Member
Executive Member
Posts: 3559
Joined: Thu Sep 22, 2011 4:38 pm

Re: How many people agree with MR/MT theory described on the forum

Post by Kshartle »

Gumby wrote:
Kshartle wrote:Wait, when the treasury issues bonds and borrows money there are fewer bonds in circulation?

Read my comments before commenting on them please.
Look, unfortunately you're wrong when you say...
Kshartle wrote:And as the treasury issues more bonds and the supply outstanding increases (all other things equal) the nominal value will drop of the bonds (supply & demand) but the cash created to buy does not.
...because the cash is created to buy bonds at the next auction. When the government issues a Treasury Bond, and you buy it with cash, the Treasury is simultaneously spending newly printed cash into the private sector. In other words, every dollar of new Treasury spending results in more new dollars to buy the next round of Treasuries at auction.

To summarize, the Treasury creates excess reserves in the banking system (when it spends) and Treasury Auctions drain those excess reserves out of the banking system.
Let me get this straight. You believe if the government tried to borrow 1 trillion next week (more bonds) yields would not rise in response?
Gumby
Executive Member
Executive Member
Posts: 4012
Joined: Mon May 10, 2010 8:54 am

Re: How many people agree with MR/MT theory described on the forum

Post by Gumby »

Mdraf wrote:Yes. And now since they cannot possibly bring themselves to agree they are changing the subject - again.
Honestly, it's not our fault you guys don't understand how the Fed and Treasury actually works. Maybe you should consider doing your own research on Fed/Treasury/PD operations and stop asking us questions about eggs! :)
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
Kshartle
Executive Member
Executive Member
Posts: 3559
Joined: Thu Sep 22, 2011 4:38 pm

Re: How many people agree with MR/MT theory described on the forum

Post by Kshartle »

Mdraf wrote:
Kshartle wrote:
Gumby wrote: No idea. It depends on the market price of eggs in September. :)
A portion of the $10 you got back in the form of coupon payments and the rest of the $10 is a drop in the value of the asset between May and September.  On the actual day of the transaction, the sale does not raise or lower your net worth (i.e. purchasing power).
The point is the asset swap is not equal because the bonds fluctuate in nominal value and cash doesn't. MDRAF tries everyday to point this out unsuccessfully. 

And as the treasury issues more bonds and the supply outstanding increases (all other things equal) the nominal value will drop of the bonds (supply & demand) but the cash created to buy does not. It's not an even swap like my $100 for your $100.

I think I've stated your point correctly right MDRAF?
Yes. And now since they cannot possibly bring themselves to agree they are changing the subject - again.
Well it is Groundhog's day, everyday.
Gumby
Executive Member
Executive Member
Posts: 4012
Joined: Mon May 10, 2010 8:54 am

Re: How many people agree with MR/MT theory described on the forum

Post by Gumby »

Kshartle wrote:Let me get this straight. You believe if the government tried to borrow 1 trillion next week (more bonds) yields would not rise in response?
More fantasyland. The government never does that. It only holds auctions for reserves that it knows are already in the banking system.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
Mdraf
Executive Member
Executive Member
Posts: 458
Joined: Tue Aug 23, 2011 5:54 pm

Re: How many people agree with MR/MT theory described on the forum

Post by Mdraf »

Kshartle wrote: Well it is Groundhog's day, everyday.
Scary that there are 13 people in America who actually believe this stuff ! And they're ALL HERE!
User avatar
MediumTex
Administrator
Administrator
Posts: 9096
Joined: Sun Apr 25, 2010 11:47 pm
Contact:

Re: How many people agree with MR/MT theory described on the forum

Post by MediumTex »

Can anyone summarize the points on which we seem to be disagreeing?

I'm sort of losing track.

Are we disagreeing about the mechanics of how the Treasury and Fed manage bond auctions and how QE works?

Are we disagreeing about whether QE is a good idea?

Are we disagreeing about whether QE will result in inflation in the price of goods and services (including labor)?
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
Gumby
Executive Member
Executive Member
Posts: 4012
Joined: Mon May 10, 2010 8:54 am

Re: How many people agree with MR/MT theory described on the forum

Post by Gumby »

Mdraf wrote:
Kshartle wrote: Well it is Groundhog's day, everyday.
Scary that there are 13 people in America who actually believe this stuff ! And they're ALL HERE!
Odd that you won't even consider that you might not be understanding it properly.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
Gumby
Executive Member
Executive Member
Posts: 4012
Joined: Mon May 10, 2010 8:54 am

Re: How many people agree with MR/MT theory described on the forum

Post by Gumby »

The part that you're not understanding is that the Treasury auctions are purposefully staggered and rigged to make sure that the demand for Treasuries always exist.

Let's take a look at a late June 2011 1-year Treasury Auction when the nation was on the verge of default:

(And yes... these bonds were auctioned with a maturity date well past the scheduled "Default" date)

Image

Even on the verge of default, and huge amounts of debt on our balance sheet, the demand for bonds from the Direct and Indirect bidders was astronomical in this auction (oversubscribed by 4:1). Those Direct and Indirect bidders could have almost covered the entire auction on their own — and it's quite common to see the Direct and Indirect bidders show even more enthusiasm.

But, look at the action from the Primary Dealers...

The Primary Dealer demand was more than THREE TIMES greater than the amount of debt being auctioned off.

But, how can this be? A nation on the verge of default, and a dire future ahead of it shouldn't be able to auction off its bonds with such high demand, right?

Let's ask the NY Fed how this really works...
Open Market Operations: Gathering Information, Preparing to Act

Staff on the Desk start each workday by gathering information about the market's activities from a number of sources. The Fed's traders discuss with the primary dealers how the day might unfold in the securities market and how the dealers' task of financing their securities positions is progressing. Desk staff also talk with the large banks about their reserve needs and the banks' plans for meeting them and with fed funds brokers about activities in that market.

Reserve forecasters at the New York Fed and at the Board of Governors in Washington, D.C., compile data on bank reserves for the previous day and make projections of factors that could affect reserves for future days. The staff also receives information from the Treasury about its balance at the Federal Reserve and assists the Treasury in managing this balance and Treasury accounts at commercial banks.

Following the discussion with the Treasury, forecasts of reserves are completed. Then, after reviewing all of the information gathered from the various sources, Desk staff develop a plan of action for the day.

That plan is reviewed with interested parties around the system during a conference call held each morning. Conditions in financial markets, including domestic securities and money markets and foreign exchange markets also are reviewed at this time.

Source: http://www.newyorkfed.org/aboutthefed/f ... fed32.html
So, the Treasury calls up the Fed to get a sense about what each auction should look like. The Fed coordinates with the Primary Dealers to monitor reserves, round them up, and then target them — making sure the auction is always oversubscribed. And they have a few conference calls to make sure everyone is on the same page. It is a highly orchestrated event — nothing more than a way to drain excess reserves, target interest rates and satisfy Congress's old gold-standard-era mandate that all spending must be "funded" by Treasury bonds.

So, what if the Primary Dealers don't want to take part in the auction? Here's the best part... The Primary Dealers are contractually obligated to take part in these auctions.
Administration of Relationships with Primary Dealers

The primary dealers serve, first and foremost, as trading counterparties of the Federal Reserve Bank of New York (The New York Fed) in its implementation of monetary policy. This role includes the obligations to: (i) participate consistently as counterparty to the New York Fed in its execution of open market operations to carry out U.S. monetary policy pursuant to the direction of the Federal Open Market Committee (FOMC); and (ii) provide the New York Fed’s trading desk with market information and analysis helpful in the formulation and implementation of monetary policy. Primary dealers are also required to participate in all auctions of U.S. government debt and to make reasonable markets for the New York Fed when it transacts on behalf of its foreign official account-holders.

See: http://www.newyorkfed.org/markets/pride ... icies.html
If we need to wage a war against another country, we don't pick up the phone to China and ask them to buy our bonds. Not at all. We simply spend the money and we issue the bonds in the highly orchestrated manner described above — draining excess reserves from banks and brokers. If the reserves don't exist, the auction is either delayed until they do exist or the Fed makes a short term loan to the Primary Dealers so that they have the proper reserves (it's not a problem right now since there are too many reserves!)

As long as Americans are willing to save their money, there will always be excess reserves, and therefore, there will always be a demand for US Treasury bonds. And even if the Primary Dealers are in trouble, the Fed can always help them out.

Now you can see why the so-called "bond vigilantes" don't want to play ball in this game where the house determines all of the rules. That doesn't stop politicians and pundits from scaring you into believing that 'nobody will buy our bonds.' Of course people will buy our bonds. We make sure of it!

And in fact, what we see is that we don't even need China to buy our bonds. So, we can never run out of money in this situation. There will always be a market for Treasury bonds as long as the Primary Dealers exist and satisfy their obligations in the market.

If China wants to take the US Dollars we give them and return them to the Treasury, so be it. The same thing with households. If we "save" our money, it just ends up back at the Treasury anyhow. We give it back in exchange for compounded interest.

The textbook explanation of how the bond market works only applies to countries that don't control their own currency. For the US (and countries like Japan), it's just a highly coordinated way to influence monetary policy. This is why we aren't, and never will be, Greece.

It's extremely unlikely that the Treasury market could fail. As you can see by the example above, even in the face of a serious default, we have Treasury Bond auctions oversubscribed by more than 4:1.
Last edited by Gumby on Fri Sep 20, 2013 12:35 pm, edited 1 time in total.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
Kshartle
Executive Member
Executive Member
Posts: 3559
Joined: Thu Sep 22, 2011 4:38 pm

Re: How many people agree with MR/MT theory described on the forum

Post by Kshartle »

MediumTex wrote: Can anyone summarize the points on which we seem to be disagreeing?

I'm sort of losing track.

Are we disagreeing about the mechanics of how the Treasury and Fed manage bond auctions and how QE works?

Are we disagreeing about whether QE is a good idea?

Are we disagreeing about whether QE will result in inflation in the price of goods and services (including labor)?
MT I disagree with the three questions. If those questions were true wouldn't we agree on everything else?

Hah J/k. That's what some responses sound like.

1. I'm not. I don't care about the mechanics only the effects.
2. I say it's a bad idea so anyone thinks it is good or it's neutral is disagreeing with me.
3. I don't think so. I think some people try to create strawman and claim that other people have claimed that higher prices are 100% inevitable as long as QE continues. That way they can knock that strawman down with the comment about other credit destruction. It's a boring strawman that is always retreated to.
Gumby
Executive Member
Executive Member
Posts: 4012
Joined: Mon May 10, 2010 8:54 am

Re: How many people agree with MR/MT theory described on the forum

Post by Gumby »

Mind you I just described how Treasury auctions actually work. If you guys want to keep talking about eggs and fluctuating values in the marketplace, be my guest.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
Mdraf
Executive Member
Executive Member
Posts: 458
Joined: Tue Aug 23, 2011 5:54 pm

Re: How many people agree with MR/MT theory described on the forum

Post by Mdraf »

I for one am not disagreeing with the mechanics. I am disagreeing with the conclusions being drawn that the Fed purchasing all kinds of debt assets, being government bonds, MBS's etc is not inflationary because they are merely "asset swaps".
Gumby
Executive Member
Executive Member
Posts: 4012
Joined: Mon May 10, 2010 8:54 am

Re: How many people agree with MR/MT theory described on the forum

Post by Gumby »

Kshartle wrote:1. I'm not. I don't care about the mechanics only the effects.
If you don't understand the mechanics, you will never understand why Treasury auctions are rigged to have more than enough demand.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
User avatar
MediumTex
Administrator
Administrator
Posts: 9096
Joined: Sun Apr 25, 2010 11:47 pm
Contact:

Re: How many people agree with MR/MT theory described on the forum

Post by MediumTex »

Mdraf wrote:
Kshartle wrote: Well it is Groundhog's day, everyday.
Scary that there are 13 people in America who actually believe this stuff ! And they're ALL HERE!
I think that most people feel this way the first time they are exposed to this perspective on our monetary system.

As I posted before, I think that one of the reasons that many people continue to think about our monetary system in gold standard terms is that it strengthens the "confidence game" element of our fiat currency.  It's almost like preserving certain gold standard era fictions in a post-gold standard world helps to stabilize the post-gold standard world (that's pretty bizarre, but probably has some truth to it).

For years, people have thought I was foolish to own ANY long term treasuries, but once you internalize the concepts we are discussing here you understand how long term treasuries can still have huge upside even at very low yields, and this idea has been validated through experience repeatedly in recent years. 

This is an important concept for any PP investor to understand, otherwise he would sell all of his long term treasuries in response to the seemingly irrefutable arguments made by certain market pundits.  Once you see the larger picture, though, the pundits' arguments are only irrefutable within a certain paradigm, and that paradigm may not take account of all of the variables that are involved in the functioning of our monetary system.

For example, right now I am hugely bullish on long term treasuries.  I think that Kshartle, Mdraf and Libertarian666 might say that this just confirms that I don't understand very well how the world actually works.  The thing is, though, I am bullish on long term treasuries because people like Kshartle, Mdraf and Libertarian666 feel the way that they do.  If everyone agreed with me, I would be a lot more concerned that I was wrong, since the crowd is usually wrong about where the market is headed next.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
kka
Full Member
Full Member
Posts: 73
Joined: Mon May 10, 2010 12:46 pm

Re: How many people agree with MR/MT theory described on the forum

Post by kka »

Mdraf wrote:
Kshartle wrote: Well it is Groundhog's day, everyday.
Scary that there are 13 people in America who actually believe this stuff ! And they're ALL HERE!
Actually, it's refreshing that the percentage who do understand how our monetary system works (13 to 6 in the poll so far) is probably much higher on this forum than the general population.
Kshartle
Executive Member
Executive Member
Posts: 3559
Joined: Thu Sep 22, 2011 4:38 pm

Re: How many people agree with MR/MT theory described on the forum

Post by Kshartle »

MediumTex wrote: For example, right now I am hugely bullish on long term treasuries.  I think that Kshartle, Mdraf and Libertarian666 might say that this just confirms that I don't understand very well how the world actually works.  The thing is, though, I am bullish on long term treasuries because people like Kshartle, Mdraf and Libertarian666 feel the way that they do.  If everyone agreed with me, I would be a lot more concerned that I was wrong, since the crowd is usually wrong about where the market is headed next.
Well no I wouldn't say that confirms anything about your understanding. I'd be curious as to why you're bullish though.

Now if the bolded area is your reason for being bullish I'd refer you to chapter 13 of "why the best laid plans"...Going wrong by being Contrary

Our opinion of T-bonds has no effect on the future price.

Hugely bullish? That's fine, you might be right. What does that mean hugely bullish?
User avatar
MediumTex
Administrator
Administrator
Posts: 9096
Joined: Sun Apr 25, 2010 11:47 pm
Contact:

Re: How many people agree with MR/MT theory described on the forum

Post by MediumTex »

Mdraf wrote: I for one am not disagreeing with the mechanics. I am disagreeing with the conclusions being drawn that the Fed purchasing all kinds of debt assets, being government bonds, MBS's etc is not inflationary because they are merely "asset swaps".
I think that this actually makes the whole discussion much simpler because all we need to do is wait around and see what actually happens to determine whether you are right or not.

Do you believe that over the last five years there has been the kind of inflationary effects you are concerned about, or do you believe that these bad inflationary effects are still in front of us?  If you think that they are still in front of us, how long do you think it will be before they will start showing up?

Do you agree that sustained high rates of inflation year after year require at least SOME increase in average wages?  That's an important question.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
User avatar
MediumTex
Administrator
Administrator
Posts: 9096
Joined: Sun Apr 25, 2010 11:47 pm
Contact:

Re: How many people agree with MR/MT theory described on the forum

Post by MediumTex »

Kshartle wrote: I'd be curious as to why you're bullish though.
1. Secular deflationary trend across the whole economy due to a combination of factors, especially contracting private sector credit and bad demographics.

2. Secular bull market in treasuries with fundamentals still intact.

3. Cyclical bull market in equities that looks like it is finally running out of gas.

4. Inability of the U.S. economy to tolerate interest rates at any higher levels (and probably not even at current levels) without tipping back into recession.

Those are a few reasons.
Now if the bolded area is your reason for being bullish I'd refer you to chapter 13 of "why the best laid plans"...Going wrong by being Contrary

Our opinion of T-bonds has no effect on the future price.
I'm not being contrary just to be contrary.  I believe that my analysis is correct.  What makes me feel good about it being unpopular right now means that the market may not have priced in my thesis at current levels.
Hugely bullish? That's fine, you might be right. What does that mean hugely bullish?
It's like being bullish, except it's a little bit bigger.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
Kshartle
Executive Member
Executive Member
Posts: 3559
Joined: Thu Sep 22, 2011 4:38 pm

Re: How many people agree with MR/MT theory described on the forum

Post by Kshartle »

MediumTex wrote: Do you agree that sustained high rates of inflation year after year require at least SOME increase in average wages?  That's an important question.
I'd think it'd be pretty hard for high price increases in everything except wages. It's theoretically possible. I mean...if everyone was unemployed and without wages we could still swim in a sea of paper but that's not going to happen. I'm confident of that. Or we're all screwed.
Post Reply