[jaguar]

So Radar, point out how exactly I am wrong then. By me I mean me, every Central Banker on earth, mainstream economics and Freidman himself of course.

I'm curious, lets have a bit of discourse in detail here, how exactly is it that the unpredictable nature of velocity of circulation doesn't mess with monetarism?

The cornerstone here is MV = PT (the Fisher equation) where where M is the stock of money, V is velocity of circulation, P is the average price level and T is transactions in the economy. I assume, since you have a superior understanding to every economist on earth that you're familiar with all these concepts. Now, it's fairly obvious for this to work that V and T are both constant, correct? At least in the short term. Thus any change in M leads to a direct change in P. That is the backbone Quantity Theory of Money on whose shoulders monetarism rests.

The first challenge to this came, unsurprisingly from Keynes: Increases in the money supply seem to lead to a fall in the velocity of circulation and increases in real income, which threw things a little out of wack. Friedman's response was that they only moved in stable, predictable ways. Of course when it actually came time to put these ideas into practice, they failed, miserably and Freidman conceded the theory was a failure.

Rather than sticking your fingers in your ears and going 'nanananyou'rewrongandi'mright' how about engaging me here, no, really, explain how Friedman, Nobel prize winner and all is wrong about his own theory.


I love the way Radar is so sure he's right he's willing to go against the will of the people (and cause many deaths) to impose his ridiculous 'state' on them. Maybe your government should stop spending money to fingerprint Swiss tourists and spend a little more keeping an eye on their home-grown nutters.