Milton Friedman.

http://www.dallasfed.org/research/ei/ei0202.html


If asked to name a famous economist, most Americans would probably say Milton Friedman. Economists usually make their contributions behind the scenes at think tanks, government agencies or universities. Friedman has done that, but he also has taken his ideas and policy proposals directly to his fellow citizens through books, magazine columns and, especially, television.

It is not an exaggeration to say he has been the most influential American economist of the past century. He has changed policy not only here at home but also in many other nations, as much of the world has moved away from economic controls and toward economic freedom.

Milton Friedman marks his 90th birthday on July 31, 2002, and the Dallas Fed commemorates the occasion with this issue of Economic Insights. Happy birthday, Milton!

— Bob McTeer
President and Chief Executive Officer
Federal Reserve Bank of Dallas

My Summary :

That when people in america think of a famous economist, they always think of Milton Friedman. Everyone says he was the most influential economist in the past.

He changed the policy not only in america but in a lot other countries.

Australia floods: Food prices 'to rise 30%'

http://www.bbc.co.uk/news/business-12162952

Food prices in Australia could rise by as much as 30% in the coming months as a result of the Queensland floods, it has been warned.

The investment bank JP Morgan says it expects food prices to spike, which will also push up headline inflation.

The bank's chief economist in Australia said 50% of crops had been affected by the floods, with 20% wiped out.

Stephen Walters also told the BBC that rises in Australia could have a knock-on impact on prices in Asia.

JP Morgan also said that coal mining had been significantly damaged and estimated that the floods would shave 0.4% off GDP growth in the last quarter of 2010 and the first three months of 2011.

The worst floods to hit Queensland for more than 50 years have left 10 people dead and more than 70 missing.

'Spike' expected

There have been reports of panic-buying by some Brisbane residents who fear rising floodwaters and further heavy rain.

"Food prices are likely to go up because shortages will emerge," Mr Walters told BBC World Service.

He said crops likely to be affected include wheat and other grains, sugar cane, as well as fruit and vegetables.

But he said the fourfold increase in prices that was seen in 2006, when Cyclone Larry wiped out the banana crop, was unlikely to be repeated because there are other parts of the country that produce fruit and vegetables.

But he warned of the impact that could be felt outside Australia.

"The Queensland region, in particular, is one of the world's biggest exporters of sugar cane as well as wheat, so they're two commodities for which we know the prices are going to spike up," he said.

"And the biggest buyers of those products are in Asia. One thing we do know about the Asian economies is they're already suffering quite a bit of food price inflation and that's going to be added to now with these price rises coming out of Australia."

Meanwhile, a spokesman for Coles, Australia's second-biggest supermarket, said: "We are going to see far heavier impacts now in terms of availability and price rises on a lot of lines."

My Summary:

Food prices in Queensland have rose due to floods, the biggest exporters in Queensland are of sugarcane and wheat, so their prices will spike up. Asia is the biggest buyer of these 2 products. Asian economies is they're already suffering quite a bit of food price inflation and that's going to be added to now with these price rises coming out of Australia. "We are going to see far heavier impacts now in terms of availability and price rises on a lot of lines" said a spokesman from Coles, Australia's second-biggest supermarket.

End times for Milton Friedman?

After World War II, laissez-faire economists had a big intellectual problem: the Great Depression. How could you argue for dismantling the post-WW II social insurance states and returning to the small-government laissez-faire of the past when that past contained the Great Depression? Some argued that the real problem was that the laissez of the past had not been faire enough: that everyone since Lord Salisbury and William McKinley had been too pinko and too interventionist, and thus the Great Depression was in no way the fault of believers in the free-market economy. This was not terribly convincing. So advocates of a smaller government sector needed another, more convincing argument.

 
It was provided by Milton Friedman. 
 
Friedman proposed that with one minor, technocratic adjustment a largely unregulated free-market would work just fine. That adjustment? The government had to control the "money supply" and keep it growing at a steady, constant rate--no matter what. Since money was what people used to pay for their spending, a smoothly-growing money supply meant a smoothly-growing flow of spending and, hence, no depressions, Great or otherwise. In Friedman's view, if the task of monetary stabilization could be accomplished via technocratic manipulations by a non-political central bank, there would be no need for much of the apparatus of the post-World War II social insurance state. 
 
In the 1950s Friedman's doctrines were considered way out there. But his Keynesian adversaries overreached, and claimed that clever governments could maintain price stability and a high-pressure economy with "full" (rather than merely "normal") employment. By the 1970s, it was clear they were wrong. Since then, advocates of expanded social democracy have been on the retreat more often than on the advance. By the 1990s, even left-of-center politicians had come to respect central bankers' mastery of the money supply, giving them a wide berth.
 
The power of Friedman’s theory was, in part, rhetorical. "Keep the money supply growing smoothly" sounds like it means to keep the presses in the Bureau of Engraving and Printing rolling at a constant pace, printing out a steady flow of pictures of George Washington. But that is not how "money supply" actually works. In economic reality, "money supply" means not just cash money but also credit entries the Federal Reserve has made in commercial banks' accounts at the Fed; plus all the credit entries commercial banks have made in households' and businesses' checking accounts; plus savings account balances; plus (usually) money market mutual-fund balances; plus (sometimes) trade credit and the ceilings between credit card limits and consumers' current balances. 
 
No central banker controls all these vast and varied sluices of the money supply – at least not in economic reality. When banks and businesses and households get scared and cautious and feel poor, they take steps to shrink the economic reality that is the "money supply." Businesses extend less trade credit. Credit card companies cut off cards and reduce ceilings. Banks call in loans and then take no steps to replace the deposits extinguished by the loan pay-downs. Without a single bureaucrat making a single decision to slow down a single printing press, the money supply shrinks—disastrously in episodes like the Great Depression. Thus in emergencies, to say that all the central bank has to do is to keep the money supply growing smoothly is very like saying that all the captain of the Titanic has to do is to keep the deck of the ship level. 
 
For the past eighteen months the collective central banks of the world have been trying as hard as they can to keep the deck of the ship level. Traditionally, central banks boost the money supply by buying government bonds from the Treasury for cash. Buying government bonds for cash cuts the supply of bonds the private sector can acquire, boosting their price while lowering interest rates, making businesses more eager to spend to expand and making asset holders feel richer and thus more eager to spend to consume. 
 
The central banks and finance ministries of the world have purchased so many government bonds for cash that they have pushed the prices of short-term government bonds up as high as they can possibly go. With interest rates practically zero, there is no extra interest return to be gained in the short run from bonds. Yet it has not been enough.
 
So increasingly over the past year, the central ministries of the globe have taken extra measures: they have guaranteed debts, they have partially or completely nationalized banks, they have forced weak institutions to merge with stronger ones, they have expanded their balance sheets to an extraordinary extent. And yet this, too, has not been enough. 
 
So now the central bankers have thrown up their hands, and asked for help to stimulate spending through tax cuts and government expenditures. Because they have run out of means to "keep the money supply growing smoothly."
 
Today, we have reached the end of the line for the Chicago view of financial deregulation. Friedman thought (a) that the central bank could exercise enough influence over the money supply to effectively control it, and (b) that banks and other financial intermediaries would be regulated tightly enough that what is now happening would be impossible. But he never resolved the tension between his view that banks need controls and the Chicago view that business must be unfettered. 

Monetarism may well make a comeback -- as a doctrine that is good enough for normal times. For in normal times "keep the money supply growing smoothly" does appear to be a relatively easy task, a minor adjustment to laissez-faire that can be performed by a small number of qualified technocrats. Unfortunately, not all times are normal.

My Summary :

I find that Friedman fought for a low increase in the money supply. Sure, inflation was low but the money supply increased at a much faster rate. I find the article false. In fact, Friedman didnt even want the Fed to even exist.

China wants to cut you off - so be prepared

People believe that to be successful you need to have a strong back with you. For example USA and China. China is a really strong and smart country, they make everthing USA designs the product China builds it.What will happen if China decides to be idependent a starts design and building there own products and stops building USA products and other countries products to. Theirs a buzz goin around saying this that they are thinking of doin that, what will happen to USA what will happen to other countries, will China rule the world click the link below and find out.
http://http://www.moneyweek.com/news-and-charts/economics/asia/why-china-wants-to-cut-you-off-10102.aspx

Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output. ... A steady rate of monetary growth at a moderate level can provide a framework under which a country can have little inflation and much growth. It will not produce perfect stability; it will not produce heaven on earth; but it can make an important contribution to a stable economic society.

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Revision List for End of Term

Grade 11 End of Term Economics Revision Sheet

Pages: Study pages 19 – 25; 89 – 105; chapter 17 - 18, and questions about the Fiat money documentary.