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2019-05-22

- A decision to base policy on measures of money presupposes that we can locate money.

As far as we can tell Alan Greenspan was right only a single time after he took the helm of the Fed in August 1987. 

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.

Note that these words were spoken on June 28, 2000 in the very inner sanctum of the Eccles Building. They were recorded word for word in the FOMC meeting transcript and released with a ten year lag 

Friedman had been a closet Keynesian all along, and had erroneously claimed that GDP growth and prosperity were a function of money supply growth, and that the change rate of the latter, in turn, could be managed to nearly the decimal point by the rate of growth in high-powered money ladled out by the Fed.

David Stockman May 21st, 2019

Monetarism

Alan Greenspan

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