"At this point I think my analysis is superfluous. I just need to quote this guy. If you folks don’t see what I see, I don’t know what my commentary will add. These quotes all come from the same post:
==> “So it’s print money now or print money later. If you really, really don’t want to see a lot of money printing, negative [interest on excess reserves] might help, but higher trend inflation is the only real alternative.”
==> “Notice how my favorite economies all end up with governments owning lots of foreign equities? It goes against Switzerland’s conservative ideology. But as I’ve argued many times, a bit of socialism might be the price you pay for a conservative monetary policy.”
==> “[I]in the long run a strategy of borrowing money from Europeans at zero interest rates and investing in Asian equity markets would be expected to yield a positive rate of return, if only due to the Balassa-Samuelson effect.”
While Bob calls these 'scary Scott Sumner statements', I call them 'statements that make my like Scott Sumner better.'
Actually there's a fifth reason to like Sumner-again supplied by Murphy in another post:
"So, if you are against the central bank buying a trillion dollar coin from the government so it can evade limits on its ability to issue more public debt, and/or if you think the central bank ought to pay very close attention to (price) inflation, then you can understand why Sumner must be stopped…no matter the cost."
Here though is the best reason yet to like Sumner better:
You think maybe we should just give Scott’s ideas a trial run, maybe for two years, and then try something else if they don’t work out so hot? Well in a post with the ominous title “There’s no going back” Scott writes:
Once we shift to NGDPLT, there won’t be any going back, because NGDPLT is far superior to inflation targeting. Whenever inflation and NGDP diverge sharply, the Fed will be under tremendous pressure to target NGDP, not inflation. For instance, if inflation rises to 2.8% due to an oil shock, and output growth falls from 2.5% to zero, the Fed will cut rates, not raise them as inflation targeting would imply. Eventually central banks will stop paying attention to inflation.Shut up. Just shut up. You had me at "the Fed will cut rates, not raise them as inflation targeting would imply.