zerohedge.com / By Tyler Durden / 05/08/2013 15:58
The statement below, coined by Friedrich Hayek in his 1931 “Prices and Production“, is well-known by any fans of the Austrian school of economics (and by implication, loathed by all Keynesians):
“There can be no doubt that besides the regular types of the circulating medium, such as coin, notes and bank deposits, which are generally recognised to be money or currency, and the quantity of which is regulated by some central authority or can at least be imagined to be so regulated, there exist still other forms of media of exchange which occasionally or permanently do the service of money. Now while for certain practical purposes we are accustomed to distinguish these forms of media of exchange from money proper as being mere substitutes for money, it is clear that, other things equal, any increase or decrease of these money substitutes will have exactly the same effects as an increase or decrease of the quantity of money proper, and should therefore, for the purposes of theoretical analysis, be counted as money.”
One may usually find it in letters of the few renegade hedge fund managers who dare to call out the Chairsatan for his utter bubble pumping insanity, in the writings of those who have not been indoctrinated into the fallacies of the Keynesian pseudo-religious dogma, and generally discussed by those who actually do understand real credit and thus, monetary creation.
One will certainly not find it in the mecca of Keynesian ideology – the US Treasury – where the dominant thought paradigm these days appears to be that sovereign debt is, in fact, an asset, that record debt will be cured with more record debt, and that the only thing that matters when accounting for money is M1, maybe M2, but certainly not M3, and where nobody has even heard of shadow money (the same reason why we predicted – correctly – over a year ago why the Fed will continue to monetize debt long before QEternity was announced).
Thanks to BrotherJohnF