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What would happen if governments created money for necessary projects?
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18-12-2014 4:26pm#1Hypothetically speaking if the economy has tanked due to a financial crisis and nothing is being done, if it's established that we need say 10 new hospitals built, what would happen if a government with sovereign control over currency simply employed people to build the aforementioned infrastructure, and credit their accounts with newly created currency directly from the central bank, no interest, no debt, whatever?
I ask simply because while I understand the argument that creating money leads to inflation, I've never understood how this is either true, or negative, during a deflationary spiral in which there is demand in the form of services being required, there is supply in terms of having the real resources and knowledge to provide them, and the only stumbling block is that the private financial sector has essentially shut down.
Is there something very obvious that I'm missing which makes this untenable? Does every unit of currency have to originate as an interest bearing loan, or is this paradigm simply there because it's rarely discussed or challenged in public discourse?
http://en.wikipedia.org/wiki/Monetary_reform#Money_creation_by_the_central_bank
http://en.wikipedia.org/wiki/Monetary_reform#Social_Credit_and_the_provision_of_debt-free_money_directly_from_government
Some people always dismiss these ideas as crackpot without actually considering them, but I'm genuinely asking here, how could such a system possibly be more dysfunctional than what we have at the moment, where the wellbeing of society depends on private institutions who do not have the wellbeing of society as a priority, and whose private motives and actions often directly conflict with the wellbeing of society?1
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Ab Lincoln funded a lot of the civil war effort by the creation of the greenback.
They topic you speak of was discussed in the House of Commons a few weeks ago though there was a very small turnout.
It’s not a crackpot idea. The power of money creation really should be given to the people.
Money should serve us, not the other way around but any change to the control of the money supply would probably result in the deaths of any leaders that tried to change the system.0 -
Personally, I think this is the most controversial political/economic topic that exists - I also think it's the single most important political/economic/societal topic that exists as well, and that people understanding it is essential for having a properly functioning democracy (because for governments without monetary sovereignty, democracy takes second place to whoever pulls the purse strings).
Might sound hyperbolic/exaggerated, but it can be seen that it isn't, once you read about and gradually learn the full range of consequences, of this being possible - one of those consequences being:
The economic crisis of the last 7 years has been (and the continuation of it is) totally unnecessary, as is the high unemployment and destruction of public services caused by it, among much much more.
There is no economic reason why governments (in countries who control their own currency - i.e. non-Euro countries, though there are also ways Euro countries can do this) could not be allowed to use created money to fund public spending, e.g. by the central bank providing the money (just giving it - no loan), and withholding money when 2-4% inflation is reached (governments could then target taxes at inflating sectors of the economy, to reduce inflation and make more room for government spending) - the only reason it doesn't happen, is because of politics and widespread myths/misunderstandings about economics (usually based on hyperinflation scaremongering, which ignores how money is also removed from circulation, and is not just added endlessly).
I can't really emphasize properly just how important a topic this is (if I had the right personal opportunities/resources, I'd happily change career and dedicate the rest of my professional life to this issue), but I'm not really sure where to start either, because this is a technical topic which challenges peoples understanding of what is economically possible in a huge/fundamental way, but it's really hard to break through peoples acceptance of a lot of economic myths, and the cognitive dissonance that generates, such that the vast majority of people are closed to the whole idea.0 -
the government cant because Europe controls it
usa does it and is doing well0 -
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Any instance of hyperinflation that has ever happened, has happened because a government co-opted a Central Bank's ability to create money, and used it to fund government spending. So while in theory it's a thing which could be done, in practice there's mountains of evidence to suggest that governments are very bad at using this power.0 -
My own understanding from a historical perpectsive is that it undermines the value of money when it is backed by nothing other than the state. Taking two examples France and USSR.
In the former, from what I remember from Pikerly Capital, the revolutionary state issued paper currency both to pay for the new regime promises and eventually the wars thereof. To pay for these printed projected, via the new currency. the state had seize private wealth in terms of the estates of the people's enemies (Aristos) as well as massive looting of neighbouring countries. The UK by contrast to deal with war debts introduced income tax (which we are still paying) and massive borrowing (which took about a century to clear, just in time for WWI).
In the latter, the various 5-year plans required also massive capital injections. After the private sector had been effectively taken over, the projects still needed to be funded. This lead to a siphoning off of the wages and a weakening in the quality/quanity of consumer goods for workers.
Thus the state conjuring money ab initio without some form of credible tangible asset would not be in the best long term interests of a country.0 -
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That's actually a myth - hyperinflation is not always down to money creation. Hyperinflation in Weimar Germany was caused largely by excessive war reparations in a foreign currency (when reserves of foreign currency ran out, they were then forced to print-and-exchange money), and in Zimbabwe it was caused by massive industrial destruction, caused by redistributing agricultural farmland to people who were inexperienced with farming, compared to the previous owners (causing a catastrophic drop in economic output).Any instance of hyperinflation that has ever happened, has happened because a government co-opted a Central Bank's ability to create money, and used it to fund government spending. So while in theory it's a thing which could be done, in practice there's mountains of evidence to suggest that governments are very bad at using this power.
Saying governments are bad at using money creation based on these past examples, is a fallacy of hasty generalization - it's like selectively looking at a country with a run-down public health service, and generalizing that all governments are bad at providing health services.
One of the historically recent successful uses of government money creation, was actually performed by Germany (a decade after the hyperinflation) in order to fund re-armament prior to WWII - they did this using MEFO bills, which was pretty much straight-out money creation; this was an enormous success - here is an additional article on that, from Irish economist Phil Pilkington:
https://fixingtheeconomists.wordpress.com/2013/12/11/hjalmar-schacht-mefo-bills-and-the-restoration-of-the-german-economy-1933-1939/0 -
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Which is a fairly recently historical development.0
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KomradeBishop wrote: »That's actually a myth - hyperinflation is not always down to money creation. Hyperinflation in Weimar Germany was caused largely by excessive war reparations in a foreign currency (when reserves of foreign currency ran out, they were then forced to print-and-exchange money), and in Zimbabwe it was caused by massive industrial destruction, caused by redistributing agricultural farmland to people who were inexperienced with farming, compared to the previous owners (causing a catastrophic drop in economic output).
Saying governments are bad at using money creation based on these past examples, is a fallacy of hasty generalization - it's like selectively looking at a country with a run-down public health service, and generalizing that all governments are bad at providing health services.
It's absolutely not a myth - you can't have hyperinflation without money creation. And while there might be proximate causes which lead to the government printing money - as in Zimbabwe and Germany - the thing which actually kicks off the hyperinflation, is the creation of money by the government. Without that, there'd be no hyperinflation.
In terms of being selective, even ignoring hyperinflation, which admittedly is a bit of an edge case, there's lots and lots of evidence which shows that countries with more independenent central banks have a lower and more stable price level. The historical evidence is overwhelmingly against letting governments anywhere near money creation in practice.One of the historically recent successful uses of government money creation, was actually performed by Germany (a decade after the hyperinflation) in order to fund re-armament prior to WWII - they did this using MEFO bills, which was pretty much straight-out money creation; this was an enormous success - here is an additional article on that, from Irish economist Phil Pilkington:
https://fixingtheeconomists.wordpress.com/2013/12/11/hjalmar-schacht-mefo-bills-and-the-restoration-of-the-german-economy-1933-1939/
Are there any other examples? 1934 isn't very recent, and certainly a single isolated instance of something similar being successful isn't a very strong argument.0 -
In many cases, the causation is the wrong way around there: Often, the money printing and budget deficits are caused by the initial surge in inflation/hyperinflation, not the other way around (though it does also happen the other way around, in many cases too) - the hyperinflation is kicked off by foreign debt loads, or by massive supply shocks, including internal economic/social disruption.It's absolutely not a myth - you can't have hyperinflation without money creation. And while there might be proximate causes which lead to the government printing money - as in Zimbabwe and Germany - the thing which actually kicks off the hyperinflation, is the creation of money by the government. Without that, there'd be no hyperinflation.
If a heavily industrialized country for instance, had a major natural disaster that destroyed most of the countries industry, while having a large amount of foreign debt owed, this would cause the debt to become unsustainable and would massively devalue the countries currency (as the destruction of industry would destroy their balance of trade, leading to devaluation), causing very high inflation (especially if heavily dependent on foreign goods).
The destruction of the balance of trade would also prevent that country from trading goods in exchange for the foreign currency they need to pay their debts, which - if they are forced to repay the debts under threat of sanctions (lots of past precedent for this) - means they have to start printing and exchanging.
It would not be their government choosing to do this, it would be the government/country effectively being forced to do this - one particular example, is Greece during WWII, being pretty much forced into this situation.
Inflation within roughly 2-4%, is a good thing - you don't want an excessively low price level - and when there is big economic disruption, that is causing high unemployment, it is good to trade slightly higher inflation, for lower unemployment which brings aggregate demand back up (we have the opposite of this right now, nearing deflation, and with persistent high unemployment - that's the price, of 'price stability' - which in this case is actually unstable, in the direction of deflation).In terms of being selective, even ignoring hyperinflation, which admittedly is a bit of an edge case, there's lots and lots of evidence which shows that countries with more independenent central banks have a lower and more stable price level. The historical evidence is overwhelmingly against letting governments anywhere near money creation in practice.
The latter - for reducing unemployment - can, in many circumstances, only be done by government (and that is the case today, in the current economic crisis) - the historical evidence showing this is possible, is a massive argument in favour of granting governments the ability to spend with created money.
It's also a critically important democratic issue as well, in my view.
There are very few examples of hyperinflation, which have not been caused by external forces (like foreign-denominated debt, or massive industrial destruction).
There only needs to be one example really, discounting that is special pleading, but another is Guernsey, the US with greenbacks - as mentioned earlier - and Japan in the 1930's (issued bonds directly to their central bank, which is pretty much printing money).Are there any other examples? 1934 isn't very recent, and certainly a single isolated instance of something similar being successful isn't a very strong argument.0 -
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The Irish economist - Finance professor at Trinity, Brian M. Lucey - has come out in favour of the ECB printing money, and handing it directly to 'the people'; he doesn't 'seem' opposed to giving money to governments in this way (though doesn't directly state support either), just notes that it's legally prohibited:
https://brianmlucey.wordpress.com/2014/12/20/helicopters-money-and-mines/
He notes that his policy has pretty much the same effect macroeconomically, as 'fiscal stimulus', i.e. as government spending the created money - and note how much he advocates being created/spent:
€3 trillion EU-wide. Imagine what EU governments could do in-aggregate, given that much money to spend.
What he proposes, seems pretty much the same as Steve Keen's Debt Jubilee idea (scroll down to 'A Modern Jubilee') - except with Brian's plan, paying down debts first, is not mandatory.
Very good article, and quite relevant to this topic.0 -
Whatever the theory, the practice is always different.
Politicians.
Need an Irishman say any more?
Governments are made up of them.
They have an agenda that is totally blinded to the needs of the country or it's people. They need to survive the next election.
They are the only reason why money printing isn't commonplace. That and Darwin. Survival of the fittest. The big money printers are all dead.
The exception proving the rule is the US of A. And they couldn't do it without their reserve currency status.0 -
Whatever the theory, the practice is always different.
Politicians.
Need an Irishman say any more?
Governments are made up of them.
They have an agenda that is totally blinded to the needs of the country or it's people. They need to survive the next election. With that need dies any notion of limits or prudence.
They are the only reason why money printing isn't commonplace. That and Darwin. Survival of the fittest. The big money printers are all dead.
The exception proving the rule is the US of A. And they couldn't do it without their reserve currency status.0 -
One of the important aspect of inflation to understand is that without an increase in the productive capacity of the country (in other words an increase in the value of what has been produced) an increase in the supply of money into the system will only lead to inflation.
The initial effects of an increase in money supply is uneven..not everyone will have more money at once, but there are more people who can buy more tomorrow of a commodity than they could yesterday, so the natural direction of prices within a dynamic (real life market) is upwards and according to Von Mises nothing can stop this. The uneven nature of this inflation effect was highly visible during the housing boom where certain elements of the Irish workforce saw huge increases in wages and earning which forced the prices of other products higher as a result, where other sectors of the workforce did not.0 -
That (the first sentence) is partly true, and the error people always make when discussing inflation on this topic, is in assuming that there is no increase in economic output as a result of the increased spending - when achieving that is exactly the point of the spending.One of the important aspect of inflation to understand is that without an increase in the productive capacity of the country (in other words an increase in the value of what has been produced) an increase in the supply of money into the system will only lead to inflation.
The initial effects of an increase in money supply is uneven..not everyone will have more money at once, but there are more people who can buy more tomorrow of a commodity than they could yesterday, so the natural direction of prices within a dynamic (real life market) is upwards and according to Von Mises nothing can stop this. The uneven nature of this inflation effect was highly visible during the housing boom where certain elements of the Irish workforce saw huge increases in wages and earning which forced the prices of other products higher as a result, where other sectors of the workforce did not.
It's unfortunate, that people tend to have a very bad understanding of the dynamics of inflation - when you examine inflation from government and consumer spending at a detailed level, you see that it is resources/commodities of limited supply that are one of the major root causes of inflation, and typically 'the market' automatically adjusts to ramp-up production/supply of these resources/commodities (simple supply and demand) - so an initial increase in inflation can damp down as production ramps up.
It's an unusual contradiction among 'free market' supporters: For them, inflation among a commodity/product, is actually a key 'signal' to 'the market' for ramping up production (so that supply can match demand) - and the efficiency of markets here is championed - but when you start discussing government spending using created money, suddenly this is all ignored and it is assumed that production remains unchanged (even though government spending into private pockets, and then into products, ends up largely being spent into 'the markets' just like any other spending).0 -
Money printing devalues your currency. That makes imports more expensive and exports cheaper. Seems like a good deal for the overall economy.
Probably would be a good deal if 1) you could limit the amount of printing and 2) if no-one else did the same thing.
Too much money printing results in a Zimbabwe situation. You need a van load of notes to buy a loaf of bread. Once you allow your politicians to print, how do you limit them? The eventual cost of the promise to print more money would be far removed from the election that inspired the promise. Responsibility is not something that Irish politicians are renowned for.
If others start to follow suit and also print, then much of the advantage is lost and the whole project becomes pointless.0 -
Was explained earlier: Just have central banks in charge of providing money to government, so that they can withhold money when inflation targets (of 2-4%) are reached (they can even stipulate conditions, e.g. that government targets taxes at inflating sectors of the economy); any devaluation is factored in with inflation.
Money printing also doesn't devalue the currency: Increasing imports (and thus the outward flow of money into the foreign sector) without an offsetting increase in exports (to create greater foreign demand for that countries currency), devalues the currency.
So, there are a hell of a lot of assumptions involved in saying that 'printing money = devaluation'; if both the country importing, and the country exporting, increase economic output by using money printing, then there doesn't have to be any devaluation at all - hell, even just the act of importing from another country, increases economic output for the country being imported from.
Talking about inflation in general terms, usually involves making some very large assumptions (either about production remaining the same, or other countries economic output remaining the same, and thus causing a trade imbalance) - assumptions which are usually unjustified.0 -
But the OP's question was about money printing, not inflation.
There are a range of things that might happen "if the government created money for necessary projects".
Political irresponsibility might be curbed by a strong central bank. Our recent experience of central bankers, certainly here in Ireland, would not bode well for any restricting by them of political will.0 -
KomradeBishop wrote: »That (the first sentence) is partly true, and the error people always make when discussing inflation on this topic, is in assuming that there is no increase in economic output as a result of the increased spending - when achieving that is exactly the point of the spending
I think the assumption is that sudden spikes in money supply, as would be prescribed for Europe's current stagnation, rarely sees a matching increase in output and productivity (rather than none at all).
In our case Ireland is a globalised, services based economy. We have a lesser tendency towards entrepreneurship and domestic production for domestic consumption. Neither is there as supportive legal frameworks or infrastructure in place in Ireland compared to other countries or cultures where this theory might prove more likely. I guess the fear is that with large increases in money supply we would see a boom in property, ill-conceived or over priced grand public projects and increases in public sector numbers and compensation - rather than a true or sustainable productivity increases. Ireland's historical tendency to vote for left leaning populists susceptible to cronyism makes this a legitimate fear I would think. Without implementing currency controls it wouldn't take long for the 2-4% inflation target to be unattainable without fudging the numbers even more.0 -
I think it would only work if goverments served much longer terms. I'm on a phone, so can't elaborate why. Any chance someone could pick this point up?
:-)0 -
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That's because the spikes in the money supply - as bank reserves - don't make it into the actual economy, because right now banks can't lend, because there is too much private debt, to the point that people don't want to borrow; this is a situation/trap, known as debt-deflation (a very important concept, for understanding economic crisis).GenericName wrote: »I think the assumption is that sudden spikes in money supply, as would be prescribed for Europe's current stagnation, rarely sees a matching increase in output and productivity (rather than none at all).
When government spends with created money, that makes its way directly into employees and contractors hands, and a significant portion of it will get spent into the economy - leading to an increase in production.
The assumption here is that we are talking about Ireland in isolation - we're not. Ireland is in the Euro, so does not have the power to do this (though there are alternatives, which can achieve a similar effect for Ireland).GenericName wrote: »In our case Ireland is a globalised, services based economy. We have a lesser tendency towards entrepreneurship and domestic production for domestic consumption. Neither is there as supportive legal frameworks or infrastructure in place in Ireland compared to other countries or cultures where this theory might prove more likely. I guess the fear is that with large increases in money supply we would see a boom in property, ill-conceived or over priced grand public projects and increases in public sector numbers and compensation - rather than a true or sustainable productivity increases. Ireland's historical tendency to vote for left leaning populists susceptible to cronyism makes this a legitimate fear I would think. Without implementing currency controls it wouldn't take long for the 2-4% inflation target to be unattainable without fudging the numbers even more.
A policy of government spending using money creation, is best achieved by (though is not dependent on) one country starting off with it - to show that the idea is plausible and to build credibility for the idea - followed by many other countries following-suit.
In this situation, there doesn't even have to be any devaluation of currency, after the idea is proven, you would have multiple countries (trading partners) simultaneously boosting economic output at the same time.
Also, it was private banks giving out loans using created money, that caused the property boom - the thread is about government spending using created money.0 -
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Having thought about this a bit, you're probably right in that the chances of hyperinflation immediately happening as a result of this, especially in countries with strong institutions, is probably not all that great. Non zero, but absent some exogenous shock probably not that likely.
That said, I've recently been studying the Barro-Gordon model, which demonstrates the time inconsistency problem faced by central banks, and the associated inflation bias. Not hyperinflation or anything, but higher than optimal inflation. It seems to me that governments would be acutely affected by this problem - how would that kind of bias be dealt with in this scenario?0 -
Ya - and it would take a fairly huge shock, to trigger a hyperinflation; so as can be seen, a lot of the kneerjerk "hyperinflation!!" posts on topics like this, are overblown and end discussion way too early.
When you start considering that government spending in this manner, is actually a real possibility, and consider in detail, explanations of how that might work and the merits of it - then it will permanently/irreversibly change your view of economics/politics; which I think, cynically, is usually why people are so quick to try and shoot it down with "hyperinflation!" claims.
From a brief reading up of the Barro-Gordon model, it seems to be based upon the idea of workers bidding up wages in anticipation of higher inflation, prior to government actually undertaking increased spending - itself increasing inflation.
I don't really see that as a problem: It might decrease the amount that government can spend, before hitting inflation targets, but it would still be almost equally as beneficial, because workers will be getting more dispensable income through wages - shifting money away from corporate profits, and towards wages - which will grow the economy faster.
It's worth remembering as well: Government would be spending like this, in a time of high-unemployment, which means workers would have very poor bargaining-power, when it comes to increased wages - so that would already limit the potential inflation from this.
Additionally/separately, if you were an MMT'er, you could add a 'Jobs Guarantee' at minimum wage to government policy, and use taxes to deflate parts of the private sector that are overheating/inflating (pushing people into the JG), which would put downward pressure on wages economy-wide, also curtailing inflation (in two ways: by directly taxing/deflating sectors of the economy that are inflating, and by deflating wages).
The Barro-Gordon model, also seem to (depending on variation you look at) use flawed neoclassical ideas, such as rational expectations, static/linear philips curve and other equilibrium-based ideas (when economies tend toward disequilibrium instead), including (if I'm getting the right impression) the idea of a 'natural' rate of unemployment; all of these ideas have serious fundamental problems.0 -
An Irishman Gerald Grattan McGeer a Canadian politician and monetary reform advocate had a major influence on Bank Of Canada policy. Bill Abram a high school teacher is also a monetary reform advocate. There is a lot of room between the Libertarians, Marxists and Keynesians, somwhere in that range lies a better way. It might work in Germany but it might not work in Ireland or the rest of the PIIGS.
freedomfromdebt.gettingstartednow.info/tag/bill-abram/0 -
William (Bill) K Black Professor of Economics/Law at University of Missouri, Kansas City testifying at Commission of Inquiry into the Banking Crisis. Ireland oh Ireland, beyond hope and not eligible for a pension. Are we capable of getting our act together this century.
neweconomicperspectives.org/2015/02/irish-style-banking-inquiry-into-the-2008-financial-crisis.html0 -
Here is an earth shaking report, the latest in what has up to now been a low level currency war waged between the major trading nations. The ECB is now going for the knockout blow according to Robert Michele of JP Morgan NY as reported in Handelsblatt the German equivalent of the FT.
"Frankfurt Robert Michele, bond manager at JP Morgan Asset Management, the euro-zone looks at the way in which deflation and therefore continue to expect falling interest rates and yields. Bonds remain in his opinion, for this reason, despite the current low interest rates a profitable investment. Michele expects a high demand for scarce werdendem offer. The bond purchase program of the ECB will further aggravate the situation. "My scenario for the euro zone in the coming years: the ECB lowers the deposit rate for banks at a rate of perhaps minus one percent to minus three percent.
This would, for example, government bonds with terms of up to five years in mean returns of minus three percent, "says Michele. The US currency will increasingly hung: "The dollar will increase the value of 20 per cent and reach parity already this year for the euro," predicts the investment expert."
Translated from German, see link:
www.politik24.de/us-grossbank-jp-morgan-zinsen-in-der-euro-zone-fallen-auf-minus-drei-prozent/2015/03/
Handelsblatt itself has a paywall on this article.0 -
The Austrians know how to deal with insolvent banks. Ireland fobs it off on the taxpayers the Austrians stick it to the creditors.
Use Google translate, search on Hypo Alte Adria Bank, faz.net is a good German source of reliable information.
www.faz.net/aktuell/finanzen/fonds-mehr/hypo-alpe-adria-deutsche-glaeubiger-sollen-fuer-hypo-skandalbank-bluten-13468200.html0 -
"Money printing also doesn't devalue the currency:"
It must be just co-incidence so that the Euro has dropped like a stone in the last week or so. It certainly can't be increasing imports without offsetting exports, as there has not been enough time for that.0 -
Here is an earth shaking report, the latest in what has up to now been a low level currency war waged between the major trading nations. The ECB is now going for the knockout blow according to Robert Michele of JP Morgan NY as reported in Handelsblatt the German equivalent of the FT.
"Frankfurt Robert Michele, bond manager at JP Morgan Asset Management, the euro-zone looks at the way in which deflation and therefore continue to expect falling interest rates and yields. Bonds remain in his opinion, for this reason, despite the current low interest rates a profitable investment. Michele expects a high demand for scarce werdendem offer. The bond purchase program of the ECB will further aggravate the situation. "My scenario for the euro zone in the coming years: the ECB lowers the deposit rate for banks at a rate of perhaps minus one percent to minus three percent.
This would, for example, government bonds with terms of up to five years in mean returns of minus three percent, "says Michele. The US currency will increasingly hung: "The dollar will increase the value of 20 per cent and reach parity already this year for the euro," predicts the investment expert."
How could negative rate bonds be a profitable investment? I find it hard to get my head around this. But I see that a lot of money is going into German bonds out to 7 years which have a negative rate, so there must be some logic to it.
The only thing I could come up with is an expectation that the Euro will fail. That Germany will revert to a Dmark which will rapidly increase in value. Am I missing something?0 -
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That's if you're printing money and then just dumping it onto the foreign exchange market (like a massive asset buy from central banks indirectly ends up doing, as a certain class of people are suddenly holding way more money and looking for somewhere to put it) - if you're printing money and actually spending it on something productive, which grows the economy, devaluation is more subject to import/export balances.1st dalkey dalkey wrote: »"Money printing also doesn't devalue the currency:"
It must be just co-incidence so that the Euro has dropped like a stone in the last week or so. It certainly can't be increasing imports without offsetting exports, as there has not been enough time for that.
So again - printing money doesn't devalue the currency, it's what you do with that money which determines if and how-much devaluation there may be.
Whenever anyone says "printing money = devaluation", they are usually either:
1: Assuming a whole specific chain of events leading to devaluation, which are not implied by just the statement 'printing money', or
2: Hold very simple gold-standard-based ideas about the value of money relative to the quantity of money - i.e. think the Quantity Theory of Money is true.0
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