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<p>[QUOTE=&quot;V. Kurt Bellman, post: 2494536, member: 71723&quot;]I think Dan and umm, &quot;North&quot;, do have some points to offer here. North first, is correct that Keynesian prescriptions vary in their success in the proportion to which a currency is a reserve currency. Remember, Keynes wrote The General Theory at a time when international currency flows were basically a rounding error compared to the domestic economies. Economies were far more isolated (big picture) than they are today. Every currency was a reserve currency basically, because the hugest portion of the economies were domestic. Only very few people travelled internationally or bought foreign goods, especially in the Great Depression, when Keynes wrote it. That said, Keynes&#039; model still works, if you have truly floating exchange rates, and you have the guts to punish currency value manipulation. Of course, when the world&#039;s major currency manipulators have nuclear weapons, well....</p><p><br /></p><p>Dan is onto something about store of wealth, but not in the way he thinks. Keynes was all about ENDING money as a store of wealth. It&#039;s intentional, not an accident. Keynes saw capital goods, investment (real investment in land, plant, equipment, not financial assets) as the only useful store of value, and I applaud him for that. We need more of that. Keynes correctly proved that &quot;savings&quot; destroys production and hence wealth, the &quot;paradox of thrift&quot;. A lot of Austrian School theory and paleobanking ideology depends on savings, while Keynes disdains it thoroughly. That&#039;s how key and early in the thought process the divide happens, and it quickly becomes a chasm.</p><p><br /></p><p>Stout savings rates are not necessary in a proper Keynesian economy; nor are they even desirable. They are unnecessary for banking purposes, as we see today, and they are drags on productive capacity. Keynes doesn&#039;t want people sitting on passive savings, he needs them investing in productive assets like factories and enterprises. So do I.[/QUOTE]</p><p><br /></p>

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