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Why gold and bitcoin make lousy money

posted to MacroMania on Wed 24th Apr 13

A desirable property of a monetary instrument is that it holds its value over short periods of time. Most assets do not have this property: their purchasing power fluctuates greatly at very high frequency. Imagine having gone to work for gold a few weeks ago,
This is not rocket science

posted to MacroMania on Mon 15th Apr 13

I'd like to offer a few thoughts on this piece by Brad DeLong. He seems to think that some people in the profession are confused about things like the natural rate of interest and its relation to the market rate. What's ailing the economy is so painfully
Monetary policy in a liquidity trap

posted to MacroMania on Thu 11th Apr 13

Krugman has an interesting article today, Monetary Policy in a Liquidity Trap. I (sort of) agree with much of it. But I believe that a few comments are in order. Consider this statement:So, at this point America and Japan (and core Europe) are all in liquidity

NGDP Targeting: Some Questions

posted to MacroMania on Fri 27th Apr 12

Let me start by saying that the idea of a NGDP target does not sound outlandish to me. But I feel the same way about price-level and inflation targeting. The first order of business for a central bank is, in my view, is to provide a credible nominal anchor.
The Trend is the Cycle

posted to MacroMania on Tue 3rd Apr 12

Nir Jaimovich (Duke University) and Henry Siu (University of British Columbia) appear to have made a very interesting discovery. Evidently, there appears to be a very strong link between two much talked about phenomena: job polarization and jobless recoveries.
Not enough U.S. debt?

posted to MacroMania on Wed 23rd Nov 11

One way to measure the ability to service debt is to compute a debt-to-income ratio. Suppose, for example, that your income is $50K per year, that your home is worth $200K, and that you have a $150K mortgage. Then your debt-to-income ratio is 150/50 = 3; or

Saturday links: the pro-am media

posted to Abnormal Returns on Sat 27th Apr 13

The weekend is a great time to catch up on some longer items that we passed up on during the week. Thanks for checking in.InvestingDay trading is too fun to be profitable. (Monevator)The safe asset shortage is still in full force. (FT Alphaville)An interview
10 Thursday AM Reads

posted to The Big Picture on Thu 25th Apr 13

My morning reads, curated with tender loving care: Even Among Quants, Twitter Hoax Raises Skepticism About Tracking Social Media (MoneyBeat) see also As Wall St relies more on tech, social media can tilt the markets (WaPo) Mediocre Earnings and Revenues (Bespoke)
'Why Gold and Bitcoin Make Lousy Money'

posted to Economist's View on Wed 24th Apr 13

David Andolfatto: Why gold and bitcoin make lousy money: A desirable property of a monetary instrument is that it holds its value over short periods of time. Most assets do not have this property: their purchasing power fluctuates greatly at very high frequency.