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Cullen Roche

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  • The Age When Being Wrong (Again And Again And Again) Just Doesn't Matter [View article]
    And the argument from hyperinflationists, for 10 years running, has been "just you wait". Those of us who said you'd be wrong have waited. And your time is up. The tired old hyperinflation nonsense was wrong. Let's just admit that those people have no clue what they're talking about and move on.
    Oct 24, 2013. 03:31 PM | 6 Likes Like |Link to Comment
  • The Age When Being Wrong (Again And Again And Again) Just Doesn't Matter [View article]
    By my count there are still hundreds of fiat currencies in existence. There are zero gold standards. Therefore, the gold standard has always failed as well. :-)
    Oct 24, 2013. 03:29 PM | 12 Likes Like |Link to Comment
  • Understanding Why Austrian Economics Is Flawed [View article]
    The Fed doesn't CAUSE growth. The Fed system is mostly just a clearinghouse where interbank payments settle. That's 99% of what the Fed does. It really just exists to make sure that Bank of America doesn't tell JP Morgan to screw off with their Bank of America deposits. That's it. All this other stuff the media focuses on like QE and ZIRP is all secondary to the Fed's main purpose as a clearinghouse. It's not inconsequential, but the Fed is really just a big support system for interbank payments to make sure the bankers don't wreck the economy.....It's not perfect, but it sure works better than banking did before there was a Fed.
    Sep 12, 2013. 01:20 AM | 3 Likes Like |Link to Comment
  • Understanding Why Austrian Economics Is Flawed [View article]
    Sorry, but the Fed has engaged in open market operations long before QE. You seem to be reading the wrong sources on what QE is precisely because there's nothing really all that unusual or remotely illegal about it. It's just open market operations....Nothing really that fancy going on.
    Sep 12, 2013. 01:17 AM | 3 Likes Like |Link to Comment
  • Understanding Why Austrian Economics Is Flawed [View article]
    The Federal Reserve is granted its operational capabilities by the US Congress via the Federal Reserve Act. Saying that it has no legal authority to implement QE or saying that this wasn't voted on "by the people" is nonsense. Congress created the Fed and the Fed Act. If you don't like it then elect some new people to revise the Act or repeal it. But don't go around just blatantly lying about how the Fed is operating illegally without Congressional authority. You discredit yourself in claiming such preposterous things!
    Sep 11, 2013. 02:27 PM | 8 Likes Like |Link to Comment
  • Understanding Why Austrian Economics Is Flawed [View article]
    Where is all this MMT nonsense coming from? I rejected MMT 2 years ago when we created MR. MR has no policy agenda within it. All MR does is explain how the monetary system works by using double entry bookkeeping, sector balances, flow of funds and an institutional framework based on what exists at present.

    You can understand MR and then apply Austrian beliefs to it. You can understand MR and apply Keyenesian policy beliefs to it. I don't care. But the point of this post is to expose the fact that Austrians actually misunderstand operational realities about how the monetary system works. If the Austrians adopted the MR framework and then applied their laissez-faire approach to policy then fine. But at least get the operational stuff right!
    Sep 11, 2013. 02:23 PM | 1 Like Like |Link to Comment
  • Fed's Fisher: QE Did Nothing (And Also Didn't Bankrupt The U.S. Like I Expected) [View article]
    I am not a "MMT type". I've written a comprehensive critique of MMT since developing MR.
    Sep 11, 2013. 01:15 PM | Likes Like |Link to Comment
  • Understanding Why Austrian Economics Is Flawed [View article]
    QE is just an asset swap. It takes privately held bonds and swaps them for cash/deposits. There is no change in the private sector (real economy) net worth due to QE. This is all in the basic accounting that I've laid out for years. Unlike many people who screamed about hyperinflation, crashing bonds and crashing USD, I was one of a handful of people who actually predicted that QE wouldn't do any of those things in 2008. I think there's a reason why I've been right about QE. It's because I understand how it works at an operational level. I understand the accounting. Please see here to review the basics:
    Sep 11, 2013. 12:55 PM | 4 Likes Like |Link to Comment
  • Understanding Why Austrian Economics Is Flawed [View article]
    I wouldn't say there is a "fully scientific" view of the world. But I do think MR describes what is. It's mainly just operational realities based on understanding how banking works, how institutional structures work, how flow of funds works, how sector balances works, etc. These are what I call "stylized facts". They are largely irrefutable. That's what MR is all about. You can apply whatever political agenda you want to it. But when you start going on about how adding reserves will cause inflation (as the Austrians did) then I am going to correct you out because that's just not how banking actually works.

    MR is all about understanding what is. If you want to use the understandings from MR to pitch a policy agenda then be my guest. But let's get the basic operational realities right first. That's really the point of this post.
    Sep 11, 2013. 12:50 PM | 5 Likes Like |Link to Comment
  • Understanding Why Austrian Economics Is Flawed [View article]
    You didn't have to translate that. I said it explicitly in this article:

    I am not a "Keynesian" in the sense you might want to label me which I presume means a proponent of big government. What I am is a proponent of the idea that the market is inefficient. I also believe govt can be highly flawed and irrational and must be maintained at a size and influence that does not unduly influence or corrupt private output. I am also a proponent of countercyclical policy like tax cuts during an economic slowdown.

    So yes, I am probably a Keynesian to some degree, but if you like tax cuts and believe in inefficient markets then you're just as much a Keynesian as I am....
    Sep 11, 2013. 10:56 AM | 3 Likes Like |Link to Comment
  • Understanding Why Austrian Economics Is Flawed [View article]
    Actually, what I've done here is attack two exceedingly basic concepts within Austrian econ - inflation as an increase in the money supply and the money multiplier concept used broadly by Austrians.

    I can provide citations showing you that these are broad Austrian concepts, but I don't think that's really necessary.

    Now, if you want to criticize me because not all Austrians believe these concepts, then that's a different matter, but I am not writing an academic paper here. It's an oversimplified blog post and includes some generalizations that are largely accurate with regards to broader Austrian economics.

    So, yes, this might be a generalization, but it's not a strawman by any means. Unless you're an Austrian of different shades than Mises, Hayek and Rothbard, in which case, you're in the minority and this post doesn't really apply to you....
    Sep 10, 2013. 10:06 PM | 12 Likes Like |Link to Comment
  • Yes, Government Deficits Equal Private Surpluses (Basically) [View article]
    I closed out the foreign sector just to show how the math works. I wasn't trying to create a real world example. Just like my one house, one bank example doesn't show a real world example.

    I am oversimplifying things to get a complex point across.

    Sorry if some of you find that unhelpful! That was not my intent.
    Aug 12, 2013. 04:25 PM | 1 Like Like |Link to Comment
  • Is Abenomics Working? [View article]
    I am not an MMT advocate. I've actually written lengthy critiques of MMT. See here:

    We started MR because of these disagreements.

    Hope that helps.
    Apr 30, 2013. 10:08 PM | Likes Like |Link to Comment
  • The Trillion Dollar Coin Idea: Beyond Stupid [View article]

    Great article. I really enjoy your work. So thanks.

    Just a few clarifications.

    1) I actually don't think the coin idea would ever get implemented. I agree with James Hamilton that there are "better ways" to solve this issue. The purpose of my articles on the coin have been to highlight the stupidity of the debt ceiling. As I've described, the existence of this "constraint" is akin to eating a cheese pizza (preferably with pepperoni and sausage), tying your intestine in a knot and then threatening your stomach not to digest the food. The debt ceiling is similar in that we only get to the ceiling because of things Congress has ALREADY voted on. It's just silly. And I keep saying that silly problems call for silly policies (which this whole thing is - silly).

    2) I am not an MMTer. I think MMT is superior to most of neoclassical econ, but we started MR specifically because we disagree with many of the main MMT positions. See this article if you're interested.

    Thanks again.

    Dec 10, 2012. 10:38 AM | 5 Likes Like |Link to Comment
  • Gold Is Not An 'Investment' [View article]
    Hi guys,

    I would recommend starting with the following links. Some of the content is quite dense while other parts are more basic.

    Also, I don't comment here often. Not because I don't want to, but because I answer a lot of questions about MR at my site Pragcap. So I just don't have the time to monitor all the places where my content gets syndicated. So if you ever have questions you can always email me or use the "ask cullen" section at pragcap.

    Hope that helps.

    Nov 11, 2012. 08:39 PM | Likes Like |Link to Comment