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One of them is a decrease in lending, and another is an increase in trading—particularly the kind of rapid-fire computerized trading that now makes up about half of all US stock market activity.13
“It is true that Keynes’s ‘model’ was a short-run model, but that’s not because he was interested only in short-run stabilization. He wanted a full employment level of investment in the short-run, so as to get to the long-run quicker.”
― Money and Government: A Challenge to Mainstream Economics
― Money and Government: A Challenge to Mainstream Economics
“Unlike the quantity theory of money, which is a ‘supply of money’ story, the credit theory of money is a ‘demand for loans’ tale. The amount of money fluctuates with the demand for loans and the creditworthiness of borrowers; and both fluctuate with the state of business.”
― Money and Government: A Challenge to Mainstream Economics
― Money and Government: A Challenge to Mainstream Economics
“In other words, the world will face the threat of financial crises as long as risk-taking and maturity transformation remain central to finance, and as long as humans remain human. Unfortunately, disaster will always be possible.”
― First Responders: Inside the U.S. Strategy for Fighting the 2007-2009 Global Financial Crisis
― First Responders: Inside the U.S. Strategy for Fighting the 2007-2009 Global Financial Crisis
“Even when state money became paper, and therefore intrinsically worthless, it was thought desirable to maintain belief that government notes – promises to pay the bearer – were in fact debt certificates backed by gold. Until 1971, the value of the American dollar was widely believed to depend on its convertibility into gold, as though the value of gold guaranteed the value of paper dollars.”
― Money and Government: A Challenge to Mainstream Economics
― Money and Government: A Challenge to Mainstream Economics
“Under the current US system, federal deposit insurance is capped at $250,000 per account.24 This coverage limit reflects a consumer protection philosophy; small retail account holders presumably lack the capacity to monitor bank solvency. But if we view deposit insurance through the lens of panic prevention instead of consumer protection, then the justification for coverage limits becomes far murkier. As we will see in future chapters, sophisticated institutional accounts are far more likely than small retail accounts to redeem en masse, precisely because they are paying closer attention. If panic prevention is a key goal, then coverage limits may very well undermine it.”
― The Money Problem: Rethinking Financial Regulation
― The Money Problem: Rethinking Financial Regulation
Ilseop’s 2025 Year in Books
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