monetary policy | In the Spirit of the Forum for Stable Currencies

This text came from GATA, the excellent Gold Anti-Trust Action Committee:

U.S. Rep. Ron Paul’s former research assistant, the economist Gary North, this week joined most of the rest of the civilized world in delighting that Paul soon may be in charge of the questions put to Federal Reserve Chairman Ben Bernanke by the House Monetary Policy Subcommittee. In an essay posted at Lew Rockwell’s Internet site, North offers a few potential questions while acknowledging that there will be many more good ones aimed at exploding the secrecy of the least accountable and most totalitarian agency of the the U.S. government. North’s essay is headlined “Ron Paul’s Questions for Ben Bernanke” and you can find it here.

This letter in the FT recommends quantitative easing (the printing of Credit money by the Bank of England) and led me to Tim Congdon and his consultancy International Monetary Research Ltd.

It is most interesting how he watches and interprets the money supply and certainly knows how to distinguish between the Treasury and the Bank of England.

This is what I wrote to him:

Dear Prof. Congdon

Your letter in the FT sparked so much interest in me that I comment on it on one of my blogs here.

I have also studied your website and would love to add to your insights from my perspective as a mathematician and systems analyst, formerly at CERN in Geneva.

The fact that you watch the money supply and its growth is most intriguing to me. That you manage to turn it into advice to clients is downright impressive!

If you were to read Green Credit for Green Purposes which we submitted to the Treasury Select Committee in response to the Stern Review, you would see that we recommend the Cash : Credit ratio as a measure that needs to be taken and redressed. By Cash I mean M0 and Credit refers to M4.

The real problem is that nobody creates the interest necessary to pay for M4. Hence people need to borrow and borrow to pay interest upon interest.

If you were to take an interest in our perspective, I would be glad to hear from you!