Monday, June 21, 2010


Money is like a tree falling in a forest; if it doesn't make some noise, it might as well not exist. 

Naturally, I take this to be an almost metaphysical statement about how movement is actually more fundamental than the thing moving (if this sounds silly, think for a second about the surf).  But for the moment I'm just thinking of the more prosaic aspect of it -- there's no inflation, and paying down government debt is going to kill the economy unless someone else wants to invest those funds.  All of these debates at bottom boil down to people thinking of money as a thing --  a brick of gold, a herd of cattle, a docile wife or extra zeroes next to your name -- rather than as a process.  Money only becomes a thing when it moves, when it circulates through the economy.  This is why Krugman and others fear that our new found faith in austerity will mean that we cannot grow no matter how much money the Fed prints up, and if we aren't growing, then there can be, to mix my metaphors, no match to light the fire to the Fed's powder keg and cause inflation

So today you escape a lecture about Whitehead.  Because we've got plenty of time (at least by financial market standards) before this bomb goes off and the waves roll in over our little fiscal atoll.

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