Warren B. Mosler

There Are No Good Choices for the Fed

The 'money' that the Fed is 'printing' is not the stuff of quantity theory and therefore of no further economic or monetary consequence. It used to be when we were on the gold standard, but the concept is inapplicable with today's non convertible currency, where lending is in no case reserve constrained. Lending is constrained by capital from time to time, and regulation, but not reserves at the Fed.

With the entire mainstream 'out of paradigm' on this issue there very well could be a substantial buying of gold for that inapplicable reason.

If so, this is the stuff of bubbles, and gold could be the next bubble.

moslereconomics.com