i love it

not just simple commodity price inflation
but even product price inflation
at the same time
as security and land lot price deflation
and of course wage stagnation

look at the slippery bald mountain top
revealed
when answering this basic question
"What is potential output? "

"...It is the level of output
that an economy can achieve
when prices and wages adjust
in a perfectly flexible way
to clear markets."

what ???

oh a notional notion of never achieved
perfection

well no

not in practice in practice its

"Essentially ... the level of output at which an economy tends to be on average"
ie
a post facto statistical artifact

its all there the evidence we need
to find yesterdays nat un-rate
hidden in the numbers boys and girls

however its
subject to

".. structural changes..."

soooo looking ahead its

um ...well we play it safe mostly
and stop well above the twilight zone

and how 'bout that 70's show
talk about a series of goofs !!!!

the potential output was over estimated
cause the trend increase in output per hour
slowed and ...
well the fedskins plowed fearlessly
right smack dab into terrio inflatio
errrr ...over and over again
till the days fabled in the opera cycle
der miller time
und
volckerlungenlied
und
der ride of der reaganwafffle

...
now comes gerry tight wire walking

"If potential output growth were slowing
or the natural rate rising...."

that double dip is just the beginish bit
therres a solid pair of paragraphs
ready to topple into thin-est gibberish

the logical floor under this stuff
is much too far below the wire

"...potential output growth " " slowing"

"the natural rate " " rising"

later there's

"rising " "risk premia "

its a veritable
velspergustnochkle sandwitch
he's got stacked up here

spectral sensitives rally to the cause

such has
near twenty years of
non stop greenspanish
helped michael savage
our hi fi lingo

...
look
face it
the only inflation hard to steer
is wage profit supply side inflation

so are you interested in
nominal wage control ???

then apply
MAP TO THE BIG CORPS

attack
that algebra phobic
gallbreath guy's admin price sector
or planning sector
right by the short limited liability hairs
and
put it into a lerner type mark up market

ohhh sorry
that would be neo-socialist
never mind

"alternatively, throw sterilization to the wind, and print money, gosh darn it, as much as the bastards need, risking inflation and dollar collapse."

i know you can be jaunty
so i risk seeming ponderous
but my premia are all paid up
ask gerry

so here goes three Q's in quest on an ..A

"throw sterilization to the wind "

not sure we use that word the same way
i use it to mean keep high powered money increases
from inflating
the product markets

"print money, gosh darn it, as much as the bastards need"

need or want ???
if its really need
plan for screwing

"risking inflation and dollar collapse."

do u mean run away product inflation

because of wealth effect final demand
or because commodity prices filtering into
household operating cost
might trigger galloping nominal wage demands

if the secomnd type
now we're so globally open
i say
" man oh man
send it baby send it "

err but then
what is meant by a bruce wilder
when he prophetizers
dollar collapse

operation -ally better then sterilization

" ..toxic sludge which is Citigroup's balance sheet"

no way that's getting to the real economy any time soon

"a war in Iraq "

out right real destruction trumps sterilization

" tax refund checks for people
who don't really much need the money"

they might buy something new and real
so leakage here

"Maybe the Fed can open the discount window to hedge funds and large traders"

james
i knew you were a wall street spec tart
but ... spreadin for hedge funds ....

Posted by: paine | Link to comment | March 20, 2008 at 01:28 PM

paine says...
spectator

that's catnip quoting mr K

Posted by: paine | Link to comment | March 20, 2008 at 01:30 PM

paine says...
case of
"never worry i see with my hands "
said by a blind man as he staggers down the hall

"There is no magical machine to print money - it comes at a cost to society"

could anything
contained in just two phrases and 15 words
be much more dangerously primitive and wrong headed

...
"Why can't you just come out and say that Wall St was involved in illegal fraudulent transactions?

Accepting this fact is the first step in your recovery from fantasy land"

precisely
orgeous george
precisely

okay i give in

these kids we're really talkin about

are from the village of the damned

btw
what in hell is barry burbling
marble ous steve
by implication
condemns the free and private enterpise system

"A credit crisis is a phenomena of unconsolidated balance sheets. "

jan tinbergen i think called this secondary uncertainty
ie
not part of ..."that's life bub"
but part of
the carry cost of running
an opaque by design enterpise system

to wax karlian

the credit system is a partial sublation of capitalism

as with any partial solution
trouble abounds at the contradiction points

seems every time
the bridge building crew
are just about
to reach the far side of the river ...

recall
penelope's loom and the suitors

...
"A few days ago, on the von Mises Instititute comment thread"

kill shot you poor dear if i'd known you needed
to talkso desperately you vamped for those ship in a bottle types
over at capin' von's con shop
i'da invited you
to my blog for a pranging

killer

you run the credit system so close to the money line
you may have forgotten the ultimo commodity

shineful metalic money

locke the guy who said posssess
ends at spoilage
let the whole exploitation game
pass thru
by introducing
that single mine shaft

money of real scarcity
acting as medium of exchange
plus store of wealth
and not yet means of payment

still strictly avoids promises

a in god we trust everyone else pays cash
world preserves
the lockean world of 6 billion crusoe islands