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Show HN: M1 Chart – The stock market adjusted for the US-dollar money supply

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Re: Show HN: M1 Chart – The stock market adjusted for the US-dollar money supply

#131
post #78

Earlier quoted context omitted.

Its not your job to convince me, but you've been unsuccessful at it. I care what the truth is, not for any particular side, so I should be easier to convince than many. Why would increasing monetary supply not cause inflation? I'm aware there is a group in macroeconomics that believes that, but I think they're crazy. Do you have anything to support your position?

It's not just the money supply, but the "velocity of money" [1] that matters. If the Fed prints 1 trillion dollars and gives it to me, but I keep it in my basement and never spend it, why would inflation be expected? The velocity of that money is zero, hence its impact on prices is zero. Inflation rises relative to the money supply multiplied by the velocity of money. [1] https://en.wikipedia.org/wiki/Velocity_of_mon…

Ok, I get your point, but in practice printing this much money is going to also increase the velocity, is it not?

Who's going to just keep $1T in a vault and let it rot for a century? And if we expected that to happen, why even print it?

Re: Show HN: M1 Chart – The stock market adjusted for the US-dollar money supply

#132

Earlier quoted context omitted.

Nonsense. MMT is a theory of how government finance works and interacts with the foreign and private sectors (including money, banking and debt). It’s not something you try. Overt Money Financing (OMF) is a policy option that MMT opens up, and there are probably shades of that in what’s going on, but I don’t see a whole lot of fiscal or monetary policy that actual MMT economists would say is a good idea.

Exactly — this is nowhere close to MMT. Stabilizing the price of the USD during recessions is literally the definition of Keynesian.

> Stabilizing the price of the USD during recessions is literally the definition of Keynesian.

Except the reverse doesn't happen (since the gold standard was dropped), so it's at best "half-Keynesian":

https://fred.stlouisfed.org/series/fedfunds

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