against all odds

#2: exogenous money predicts that the central bank can control the quantity of base money at will. Endogenous money predicts it must play the role of passive accommodation, otherwise the economy will implode.

As John Kenneth Galbraith put it, "Milton Friedman"s misfortune is that his economic policies have been tried." Monetarism was tried in the early 1980s: in the UK, the US and Chile. But the central banks consistently undershot their money targets and interest rates went wild. The policy certainly succeeded in increasing unemployment and therefore taming inflation, but the attempt to control the money base failed completely. Again, this is evidence in favour of endogenous money.

#3: exogenous money predicts that reserves factor into bank"s lending decisions; endogenous money predicts that they do not, and decisions about reserves are taken after loans are made.

Anyone from the real world – bankers, lawyers, accountants – will tell you banks do not consider reserves when lending. They use double entry bookkeeping to simultaneously create an asset (your loan) and a liability (your deposit, in which the loan is "stored.") The books are balanced; if they need reserves they will borrow them from other banks or, failing that, the central bank.

That the central bank could say no means some might interpret endogenous money as a policy issue, but it isn"t – as I explained in my previous post, it reflects the reality of capitalism: banks must make lending decisions based on endogenous activity, and the central bank must accommodate this. If it does not, the credit markets will simply not work, and credit crunches will ensue.

#4: exogenous money predicts that only the distribution, not the level of private debt matters

In the exogenous story, banks act as intermediaries between savers and borrowers. Money is deposited; the bank lends this out. It does this until it either does not want to lend out for whatever reason, or until it hits the limit of how few reserves it can hold. Private debt simply represents a distribution from one person to another; the level alone should not have much macroeconomic impact.

In the endogenous story, banks create purchasing power out of nothing by crediting their customer"s accounts. This implies that an increase in private debt will add to nominal aggregate demand, and hence that private debt expansion will precede nominal growth, and also be correlated with other economic variables:

We might expect some correlation between economic activity and private debt in the neoclassical model. But a correlation as robust as this, with private debt moving first, strongly supports the endogenous money theory.

#5: exogenous money predicts that increases in the money base will have an impact on bank"s lending and other economic indicators (with some qualifiers). Endogenous money predicts this will be minimal (though reserves may "oil the wheels" of the system somewhat).

Ben Bernanke"s unprecedented doubling of the monetary base obviously did not lead to a massive surge in lending. Neoclassical economists do have some explanations for this, namely that the "money multiplier" collapsed – in other words, banks do not want to lend out the reserves, or there is a lack of demand. This is believable, but really it"s just a tautology – if reserves will increase lending except when they won"t, economists have told us nothing. We do not have a scientific proposition.

Overall I"ll put this one down as ambiguous, but its certainly not a falsification of endogenous money

unlearningeconomics.wordpress.com/2012/09/...ey-one-more-time/

Kreditnachfrage ist massgeblich eine Funktion des Einkommens:

'...Der Maidan hat nun seine Märtyrer, und er hat seine Helden: die jungen Burschen in Camouflage, mit Motorrad- oder Armeehelmen auf dem Kopf, Schlagstöcken in der Hand, eingepackt in schusssichere Westen. Ihr Auftreten ist martialisch, ihre Gesinnung nationalistisch. Ihr Einfluss und Ansehen in der Protestbewegung hat zugenommen. Sie sind antidemokratische Kämpfer für die Demokratie.

Man hat auch einen Namen für das Sammelsurium an rechtsradikalen und ultranationalistischen Gruppen: Rechter Sektor. Eigentlich apolitische Fußball-Hooligans und gewaltbereite Skinheads fühlen sich ihm ebenso zugehörig wie rechte Kleinparteien, Bruderschaften und paramilitärische Vereinigungen. Diese sind mehr oder weniger klandestin organisiert und tragen Namen wie Widerstand des Donbass, Weißer Hammer, Intolerantes Transkarpatien, Patriot der Ukraine oder Schwarzes Komitee.

Eine schon länger aktive Gruppe ist etwa Dreizack – sie verwendet das ukrainische Wappen, in dem das Wort „Wolja“ (Freiheit) abgelesen werden kann. Die ultranationalistische Gruppe wurde 1994 gegründet und hat Ableger in vielen Städten des Landes. Sie gedenkt in Aufmärschen mit Vorliebe der westukrainischen Unabhängigkeitskämpfer, die gegen und noch mehrere Jahre nach dem Ende des Zweiten Weltkriegs gegen die Rote Armee vorgingen und teilweise mit der deutschen Wehrmacht zusammenarbeiteten. Sie führt paramilitärische Sommerlager durch, wo sich ihre Kämpfer stählen, und hat sich der „nationalen Revolution“ verschrieben: dem Umsturz der derzeitigen politischen Macht. Auf Facebook hat die Gruppe mehr als 7000 Anhänger. Insgesamt hat der Rechte Sektor große Anziehungskraft – als politische Vertretung profitiert davon die Partei Swoboda (Freiheit) von Oleg Tiahnibok, die ihre Wurzeln in nationalistischen Bruderschaften hat. Allein im Internet hat der Rechte Sektor über 164.000 Anhänger. Freilich sind nicht alle virtuellen Fans tatsächlich organisiert: Bei vielen jungen Ukrainern gilt es einfach als hip, ultrarechts, nationalbewusst, antirussisch und ukrainischsprachig zu sein.


Wenig Chancen ohne Schläger

Auch gemäßigte Vertreter der Opposition wie Vitali Klitschko haben ihre Einstellung gegenüber dem Rechten Sektor geändert – notgedrungen. Hieß es bei den ersten Zusammenstößen noch, Schläger des Regimes– sie werden als „Tituschki“ bezeichnet – seien für die Gewalt verantwortlich, versucht man nun nicht mehr, die Radikalen an den Rand zu drängen. Die Entschlossenheit der jungen Recken hat zu Toten, aber auch zu Ergebnissen geführt: Die Opposition musste einsehen, dass sie ohne den Druck der Straße kaum Verhandlungsmacht hat.

diepresse.com/home/politik/aussenpolitik/...den-der-Revolution

secondary market that have already been purchased. Further, it is implementing these
transactions, not because there is a lack of demand for t-bonds, but because the Fed is
trying to implement monetary policy. In other words, the Fed is not doing fiscal policy
and it should not be implied that the Fed is necessary to achieve fiscal policy. That could
be different in different circumstances, but it is not accurate at present.

 It’s true that the government could use the Fed to fund the US Treasury’s spending,
but that would involve a full blown rejection of bonds by the Primary Dealers and the
private sector (something that would likely only occur during a very high inflation). In
other words, the only time the Fed would be required to purchase bonds in a funding
short-fall is in the case where the private sector refuses to purchase bonds and the Fed
must fill the void. Clearly, given record high bond prices, declining bond yields and very
strong demand at all auctions, the evidence that this is occurring is fairly weak.

Therefore, for this analysis I am treating monetary policy and fiscal policy as separate
policies.
QE in the form of buying back government debt is not necessarily “money
printing” or “monetizing the debt”. QE, as shown in the examples above, is actually a
pure asset swap (reserves for bonds). The private sector’s net financial assets are the
same though the composition changes. QE via a non-bank results in deposit issuance by
a bank which might appear like monetization, but you must also note that the t-bond has
essentially been unprinted because it is removed from the private sector and sits on the
Fed’s balance sheet where it has practically zero impact on the real economy (the Fed
doesn’t buy groceries at Wal-Mart after all).

So QE via a non-bank can change the
moneyness of the private sector’s assets, but won’t necessarily change the level of
inflation since spending is a function of income relative to desired savings and QE
doesn’t directly change any of the variables in that equation. Therefore, the terms
“money printing” and “monetization” must be explained in more detail and aren’t
applicable in the inflationary sense in which most people use the terms.

papers.ssrn.com/sol3/papers.cfm?abstract_id=2397992

transactions, not because there is a lack of demand for t-bonds, but because the Fed is
trying to implement monetary policy. In other words, the Fed is not doing fiscal policy
and it should not be implied that the Fed is necessary to achieve fiscal policy. That could
be different in different circumstances, but it is not accurate at present.


It’s true that the government could use the Fed to fund the US Treasury’s spending,
but that would involve a full blown rejection of bonds by the Primary Dealers and the
private sector (something that would likely only occur during a very high inflation). In
other words, the only time the Fed would be required to purchase bonds in a funding
short-fall is in the case where the private sector refuses to purchase bonds and the Fed
must fill the void. Clearly, given record high bond prices, declining bond yields and very
strong demand at all auctions, the evidence that this is occurring is fairly weak.

Therefore, for this analysis I am treating monetary policy and fiscal policy as separate
policies. QE in the form of buying back government debt is not necessarily “money
printing” or “monetizing the debt”. QE, as shown in the examples above, is actually a
pure asset swap (reserves for bonds). The private sector’s net financial assets are the
same though the composition changes. QE via a non-bank results in deposit issuance by
a bank which might appear like monetization, but you must also note that the t-bond has essentially been unprinted because it is removed from the private sector and sits on the Fed’s balance sheet where it has practically zero impact on the real economy (the Fed doesn’t buy groceries at Wal-Mart after all).

So QE via a non-bank can change the moneyness of the private sector’s assets, but won’t necessarily change the level of inflation since spending is a function of income relative to desired savings and QE doesn’t directly change any of the variables in that equation. Therefore, the terms “money printing” and “monetization” must be explained in more detail and aren’t applicable in the inflationary sense in which most people use the terms.

Man ist gut beraten, bei Texten wie dem obigen diese Zusammenhänge im Auge zu behalten. Da die Lüge der Fed offenkundig ist, müssen teuer angeheuerte Faktenverdreher und Winkeladvokaten her (sozusagen aus der PR-Abteilung der Fed), um die im Grunde fiskalpolitischen Aktionen der Fed als Geldpolitik mit an den Haaren herbeigezogenen Argumenten (siehe mein obiges Beispiel) zu tarnen und "wissenschaftlich" zu rechtfertigen.

Und aus dem Dunstfeld solcher "Forscher" kommen dann auch die Statements, die Fillorkill in alle Threads streut, dass nämlich QE "neutral" sei und die Wirkung "nur psychologisch". Was wiederum daran liegt, dass Fill womöglich dasselbe (Heile-Welt-)Erkenntnisinteresse hat wie der Fed und ihre Faktenverbieger.