Archive for October 7, 2008

Monetarism is back after a decade or more but too late to save the day!

For more than a decade monetarism has largerly been ignored. US broad money supply (M2) has doubled in a decade and credit fuelled massive increases in household debt and asset prices.

Now the pyramid game has come to an end and monetarism seems to be making a come backĀ  – “Governments must reduce interest rates and support the banking system otherwsie we will end up repeating the mistakes of policy makers following the 1929 crash!”.

This is wishful thinking and it is way too late Read the rest of this entry »

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