any bank could open buckaroo accounts and make loans/create deposits but they wouldn’t be acceptable for buck tax payments
and would not be issuer insured, etc.

Thanks, I should have been clearer. By “not indefinitely” I meant assuming that the banking system is not capital constrained, i.e., not fully levered to regulatory limits. Make sense?

John, thanks, I was simply pointing out that a ‘teacher’ sector, although analogous to the USG in the Buckaroo framework, is not the USG. Private sector entities can and do create equivalents or at least analogues to NFAs all the time. They’re like Warren’s ‘points on the scoreboard’ but without the far reaching utility of USDs, eg. Kind of hair splitting on my part, I admit.

Also not sure I agree that Buckaroo NFAs = 0…? Would seem to depend upon the nominal service requirements imposed by the faculty relative to Buckaroos outstanding?

I’m not sure why you’re referring to the law of excluded middle, and the approach that says “Over 2%? Next stop 100%, then hyperinflation!” I agree this is a silly view.

You may be right that it’s the second derivative of prices that should be examined as a warning sign for currency crisis, and not inflation itself.

It’s hard to argue in favour of your “price acceleration” view, contra the conventional approach, without having both (1) some non-monetary tools which the authorities can deploy in case the second derivative starts to tick up, and (2) some theory on how inflation works (eg how being at 100% implies no greater risk of imminent asymtotic price increases than say 5% per annum).

“As to fiscal policy it appears that my design works then – since that *was* fiscal policy dressed up in monetary policy clothes”

Sorry what were you referring to with “my design”?

I was not the one making that claim.

I am claiming that “inflation” is so ambiguous as to be useless. It’s become a bogeyman, monsters under the bed, and voodoo doll all rolled into one. Let’s get specific about the technical definitions and how they function in a model that purports to be representative of the actual economic and financial system. Otherwise, it’s just a lot of gas. And when we get into the operational definitions in use presently, they are pretty ridiculous as the basis for scientific concepts.

If we can’t accurately define it, its rates, or the causation, how can one say it is good or bad?

Is stable prices domestically but changing fx indicative of price instability. Many people think it is. Does the cb consider whether the cause of inflation is aggregate demand from an excess of “money” running ahead of the capacity of the economy to expand near full employment, or from supply shortages of vital resources that get passed through. Are the means of treating these the same. In the case of demand pull is the supposed increase in price level of finished goods due to excessive govt money or private credit. What about asset price increases. should they be treated always as price appreciation and never as “inflation”?

This whole mess is a can of worms, such that treating it using the measures that the cb does is equivalent to medieval blood-letting.

inflation is not a bogus concept. what’s bogus about the loss of value of a currency? it might be difficult or impossible to measure accurately, but most of the things we measure everyday are not measured accurately, so what?

inflation, its causes and transmission mechanism, is a lot more complex than what people tend to think, but that shouldn’t stop anyone who considers it can be positive to explain why.

And I am jus’ sayin’ that “inflation” is a bogus concept with inadequate meaning to be useful. It’s a distraction at best and a negative influence at worst. Scientists and mathematicians need to come up with something satisfactory, or best to just can the idea. A cb running a command system to “control inflation” when they don’t know what it actually is or how to compute the rates (first and second derivative) scientifically, is beyond ridiculous. It’s estimating,” that is, guessing, and then relying on “influencing expectations,” with no causal transmission specified as a tool. Magical thinking at best, voodoo at worst. Is this the best that the so-called best of the best can do? Or is this the Middle Ages?

Neil: no fallacy, sorry. if 100% monthly inflation is a concern and not a figment of neoclassical junk, then you’ve got to come up with an explanation of the level at which inflation stops being such a figment.