The other day, I alluded to the analogy that central bankers are like naughty children; – they move the goal-posts after a shot at goal has already been taken. Here, I’ll explore the implications of this, and ask: could a period of ‘scarcity of money’ occur before debauched monetary policies have the platform to take hold?

 

When the Fed engages in monetary policy, it changes the stock of assets that back the volume of Federal Reserve notes in existence. I explain why this happens here. Every time they buy or sell something, the dollar in your pocket changes. It’s still called a dollar, but it’s no longer ‘good for’ what it used to be ‘good for’.

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