David Ricardo on money

Strictly speaking, there can be no permanent measure of value. A measure of value should itself be invariable; but this is not the case with either gold or silver, they being subject to fluctuations as well as other commodities. Experience has indeed taught us, that though the variations in the value of gold or silver may be considerable, on a comparison of distant periods, yet for short spaces of time their value is tolerably fixed. It is this property, among their other excellencies, which fits them better than any other commodity for the uses of money. Either gold or silver may therefore, in the point of view in which we are considering them, be called a measure of value.

-- David Ricardo, The High Price of Bullion: A Proof of the Depreciation of Bank Notes, 1810, pg. 13 (footnote)

Bill Woolsey explains monetary policy

The reason I support GDP targeting is that I believe the slow, steady growth in money expenditure provides the least bad macroeconomic environment for microeconomic coordination. Letting everything else--interest rates, the price level and inflation, the unemployment rate, and real output--adjust according to market forces is desirable. Having technocrats use "monetary stimulus" to manipulate unemployment and inflation to maximize a "social welfare" function is wrongheaded.

Monetary Freedom: The Economist on Targeting Unemployment

The same goes for having the Fed set inflation and letting NGDP adjust.

The same goes double for having the Fed set the price of a single commodity (especially gold) and letting inflation and NGDP adjust.

The same goes triple for having the Fed set the price of a commodity like oil (or refined gasoline) and letting inflation and NGDP adjust. The current recession was caused by the Fed's decision to target the price of oil in 2008, and the 'double-dip', which is really just the prolongation of the same recession, is most likely caused by the Fed's attempt to bring down the price of oil in the summer immediately past.

Why interest rates don't matter when determining the status of monetary policy

Interest rates are an unreliable indicator of the stance of monetary policy. To quote Milton Friedman, "Low interest rates are generally a sign that money has been tight, as in Japan; high interest rates, that money has been easy." It is true that short-term interest rates can fall immediately after monetary easing occurs. (They always then rise, and if monetary policy stays loose nominal interest rates will rise to above where they were before the monetary easing occurred.) When interest rates do fall due to monetary easing, real interest rates always fall further than nominal interest rates do (since inflation expectations are rising); but from Jul 2008 - Nov 2008, real interest rates (as measured by TIPS yields) actually rose. TIPS spreads fell to negative levels in late 2008, forecasting substantial deflation (which has been borne out by changes in the overall price level over the last three years).

Furthermore, even when interest rates do fall in response to monetary easing (long-term rates rose on expectations of QE II), that effect only means interest rates fall relative to what they would be without the monetary easing. Interest rates still respond to the market factors that determine the supply of and demand for Treasuries. In the summer of 2008, the market interest rate, assuming a constant stance of monetary policy, on short-term Treasuries was falling, due to the financial crisis driving up demand for safe assets. The Fed kept that fall in interest rates from happening until October, which meant holding interest rates above where they would have been assuming constant monetary policy. That was an effective tightening of monetary policy.

Milton Friedman's Comments on 1929-1933 sound like comments on today

There is one sense---and, so far as we can see, only one---in which a case can be made for the proposition that monetary decline [1930-1933] was a consequence of the economic decline. . . . The [Federal Reserve] System was operating in a climate of opinion that in the main regarded recessions and depressions as curative episodes, necessary in order to purge the body economic of the aftereffects of its earlier excesses. The prevailing opinion also confused money and credit; ... regarded it as desirable that the stock of money should respond to the "needs of trade," rising in expansions and falling in contractions; and attached much greater importance to the maintenance of the gold standard and the stability of exchanges than to the maintenance of internal stability. . . . Given that milieu, it can be argued that . . . [the Fed] could not have been expected to prevent the appreciable decline in the stock of money during 1930, because it and others as well regarded the decline as a desirable offset to earlier speculative excess; and that its failure to react vigorously . . . reflected the attitude that it was desirable to liquidate "bad" banks, to let "nature take its course" rather than to support the financial system "artificially".

A Monetary History of the United States, 1867-1960, Friedman & Schwartz, pp. 691-692.

New computer. Well, sold as a phone. But hey, $50 computer with free built-in phone!

I got my new Android phone today. I love it love it love it love it. It charges from my laptop, which the Blackberry didn't do. It mounts on my laptop just fine, and takes music no problem --- I have Rhythmbox doing the work and it just works. I think photos will work the same way, so I sort of have a digital camera now. Love it love it love it. The only problem is that it has 2GB of storage and I have 5GB of music. So now I'm in the market for an SD card.