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News Link • Federal Reserve

June 28, 2000: The Day Alan Greenspan Jumped the Monetary Shark, Part 1

• By David Stockman

That was when he flat-out said that under the modern banking and financial system it is damn near impossible to measure "money", let alone track it by the week and month and make monetary policy based on pegging the growth rate of the money supply.

Jeff Snider has highlighted this point well in the graphic insert below, but the second red bolded sentence cannot be repeated often enough. Said the Maestro,

A decision to base policy on measures of money presupposes that we can locate money. And that has become an increasingly dubious proposition.

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