----------------- HES POSTING ----------------- Chas has it right--but reveals the issue: When do we know there is "an excessive amount of money circulating in the economy"? The issue is not theoretical--we can always construct a model that generates the outcome we want to generate--but empirical. He also reveals a critical insight into the importance of monetization--namely the importance of liquidity to commercial health. He notes the need for "balance." Ah, yes. But again that is not a theoretical question, but an empirical one. My original question arose from the apparent inflexibility of some theoretical prescriptions being floated in the discussion. They don't help in practice; theory can and should inform policy choices, that is, framing policy, but within the frame there is still a lot of latitude. Fred Carstensen ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]