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View Diary: President Obama Should Use Coin Seigniorage Now! (55 comments)

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  •  Sorry (0+ / 0-)

    Forgot to reply to the last part of your post.

    Look, the quantity theory was refuted by Keynes in the 1930s. We are no longer operating on the gold standard. The value of money is determined in the international currency markets. And it's not about quantity, it's about price, and the price doesn't go up until the quantity of goods and services is scarce. There's no scarcity either domestically or internationally generally. The price of goods and services generally won't go up until there is, even if we add money.

    Next, I'm proposing seigniorage to get around the debt limit. Increasing spending over what is already planned is an entirely separate issue. The point is that spending using seigniorage vs. spending in deficit adds the same amount of new net financial assets to the economy. The only difference is that in the first case the new financial assets are in bank reserves, and in the second the new financial assets are in Federal debt instruments. There's absolutely no evidence that one is more or less inflationary than the other.

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