Manhattan Reborn 1978

Northeastern United States, Massachusetts (Massachusetts).

Boston, southern suburbs. .

Morgan Manor is brightly lit at night.

In the living room on the first floor.

Old Morgan, who had had dinner with his family, was sitting on the sofa. Although he was watching the TV news, his attention was completely "not online." .

His wife Nariya, who was sitting next to him, looked very calm. Her eyes were also on the TV, but her whole body looked different. .Also entered the "offline" state. .

Outside the living room.

Mr. Butler, standing at the junction of the stairs, living room and foyer, glanced at the "lonely" two people in the living room, then slightly raised his head to look upstairs, sighing silently in his heart.

Although, he did not go to New York to attend the engagement ceremony of Lilith and David~

But at this year’s Christmas Eve family dinner, everyone’s “cold” behavior allowed Mr. Butler to roughly guess what happened in New York~

The eldest son Panaris and the eldest daughter Cheryl did not have smiles on their faces like in previous years.

The youngest son Giles and the youngest daughter Laura did not look happy at all during the dinner. .

Elder and Grace, this once "enviable" couple, are now like strangers who "look at each other without words" ~

Pine and Lilith are like two "transparent people". .I almost didn’t interact with anyone else during the entire dinner~

This kind of "cold + depressing" Christmas family dinner where everyone is not "online" has never happened in decades. .

. . .

The gate of the manor.

A black Cadillac car stopped slowly.

Otis Parker wore a gentleman's hat and walked out of the car with his hands empty. He looked at the brightly lit house from a distance, his eyes full of calmness and confidence~

ten minutes later.

Otis Parker followed Mr. Butler and walked into the living room.

Old Morgan stood there with a smile on his face, stretched out his right hand to Mr. Parker and said with a smile: "You are coming over on Christmas Eve, right...?"

"Merry Christmas! Sir, Madam!" Otis Parker took off his hat, shook Old Morgan's hand lightly, and said with a smile.

"You too~" Neriya, who was still sitting on the sofa, showed a polite smile and nodded.

Mr. Parker didn't care about Neria's "discourtesy". He took out two letters from the inside pocket of his coat and handed them to Old Morgan and said.

"I'm just a messenger."

"messenger?"

Old Morgan took the letter, looked through it, raised his eyebrows and said with a smile, "Is this what David asked you to send?"

"Yes!"

"Hehe~"

"Nariya, he also wrote you a letter..."

"Would you like to see it?"

Neriya tilted her head slightly, looked at the letter handed by her husband, hesitated for a moment, then took it and said.

"it is good!"

When Odis Parker saw that both of them had opened the letter, he silently took two steps back, walked out of the living room, and found the butler.

"Excuse me, Panaris, Cheryl, Giles, and Laura, are they all here?"

"Yes!" Mr. Butler replied without changing his expression, with a curious smile in his eyes.

Otis Parker smiled and nodded, took out a few more letters from his arms, handed them to Mr. Butler, and said.

"These are the letters that David entrusted me to give to them."

"And this one is the letter that David wants me to hand over to you!"

"Give it to me?" Mr. Butler took the letter, took out an envelope, looked at it for a few times, and nodded.

"Thank you! I will transfer it to them immediately..."

Austin Parker took half a step back, put his hat on his chest with his left hand, bowed slightly and said with a smile: "Merry Christmas, sir!"

"Merry Christmas!" Mr. Butler replied with a very "courteous" smile.

"You've come all the way from New York and haven't had dinner yet, right?"

"In our kitchen, there is..."

"No~thank you!"

Odis Parker smiled and put on his courtesy, gently touched the buttons on his coat with his right hand, and said: "There are still many people waiting for me in New York!"

"goodbye!"

"..OK!"

"Goodbye, Mr. Parker!"

. . .

Outside the big house, in the courtyard.

Odis Parker walked out of the manor gate with brisk steps.

Next to the car.

Mr. Parker stopped and turned to look at the manor house. .An inexplicable feeling of joy arose in my heart ~

Perhaps, the Coleman family will become like this in a few decades. .Bar?

hehe~

So what?

It is estimated that by then, I will have already gone to heaven to meet God. .

Emm. .

Mr. Parker reached out to open the car door, sat in the back seat, and asked the driver, Mr. Gardener, with a smile.

"You said, after I die, I will go to heaven...or hell?"

Mr. Gardener, who was sitting in the driver's seat, turned the key and started the car. He looked directly into Mr. Parker's eyes in the rearview mirror and asked expressionlessly.

"Do you think... we'll go to heaven?"

"..Haha~"

Mr. Parker took off his hat, threw it aside, and said with a playful smile: "Let's go to Wildfire for a drink!"

"Maybe we can find the answer there..."

"..."

Mr. Gardener looked at him silently in the rearview mirror for a few seconds, slowly turned the steering wheel, and said with a smile on his lips.

"ok~"

"This time, please!"

"Hahahaha~ good!"

. . .

In the manor house.

After Mr. Butler delivered each letter, he went down to the first floor and stood in his usual position. From the open door of the living room, he glanced at the old Morgan couple holding letters in their hands, and he felt even more curious~

He took out the letter for himself from his pocket, hesitated for a few seconds, and opened it.

After a few minutes.

Mr. Butler repackaged the letter and put it into his inside coat pocket.

He looked at the old Morgan couple in the living room again, who were still looking down at the letters, and the curve of the corners of their mouths became "fuller"~

That boy David, indeed. .

hehe~

. . .

in the living room.

The letter in Nariya's hand reads like this:

DearMrs.Morgan

Wish you a Merry Christmas!

Please forgive me~

I use this way to tell you something from my heart.

Love, marriage and family, responsibilities, obligations and ideals have always troubled us young people who grew up in an era of turbulent thoughts ~

Whether people like it or not, those hippies with long hair + big beards + dress as they please + like to use actions to interpret their rebellious spirit.

They/they have become one of the historical symbols of this era!

In Greenwich Village in Manhattan, New York, many young counter-culture people who were extremely disappointed gathered spontaneously in the village and called themselves hips~

However, I prefer to call them the words used by a San Francisco newspaper to describe these young rebels~

Young bohemians.

(Bohemianism refers to a lifestyle that refers to a group of artists, writers and anyone who has no illusions about tradition who wish to live a non-traditional lifestyle.)

It will allow us young people to constantly examine, debate and reflect on traditional customs, concepts, rules, etc. ~

Humans are social animals.

Young people, especially!

When young people of our generation reach adulthood, no matter whether they express their true inner thoughts in front of others, they cannot escape the potential influence of the surrounding environment and people on us~

Therefore, I would like to visit you at your home at 27:9 am on the 30th to have an in-depth exchange of more of my true thoughts with you.

At the same time, I also want to listen more carefully to some of your thoughts!

Yours sincerely,

David Coleman

June 12, 25.

. . .

Neriya slowly put down the letter in her hand, frowning slightly, not knowing how to evaluate it for a moment. .

But what if. .Connect it with the transoceanic phone call I received in the afternoon.

Neriya looked down at the letter in her hand, feeling slowly convinced. .The real meaning of Deborah’s subtle “weird words” ~

But what did David talk about when he went to England to meet Deborah?

Why would she help like this? .Where is David?

This has never been her character!

Could it be that. . ? ?

Neriya's eyes fell on the letter paper, with very regular fonts, but her mind slowly "went astray"~

. . .

in the living room.

Old Morgan's side~

The content of the first two pages of the letter in his hand is as follows:

Although I have not systematically studied or researched the economy, finance, monetary system, etc. .

But as a young man preparing to make a difference on Wall Street, I still hope to write down some of my humble opinions on currency and finance bit by bit, and leave them to my future self.

It allows me to relive the fun and satisfaction I gained from studying, researching, and exploring in my youth ~

Therefore, this letter should be regarded as my study and research manuscript.

I also ask you to criticize and correct some of my learning results!

Foreword:

It can be seen from the development of world history that the close connection between currency and finance has a very important impact on a country's economy, politics, culture and other aspects in all aspects.

So what is currency?

Money is actually the common name for currency.

钱～

People in the world have mixed reviews about it, and some people compare it to precious time.

time is money!

Some people regard it as dung and curse it as a drug for the human soul. .

So, what exactly is money?

Therefore, I think that to understand the role of finance in economic activities, these alone are not enough. The nature of currency is what we need to understand most.

Hubbard once famously said: "In 1 people, only one person may understand the currency problem ~ but we encounter it every day."

The "people" here refer to currency.

Strictly speaking, the banknotes we use daily are not currencies.

Because money is a commodity that is separated from commodities and serves as a fixed general equivalent.

Since paper money itself does not have the same intrinsic value as metal currency, its significance is that it is a symbol of monetary value.

In fact, our willingness to accept banknotes also requires some conditions. .

For example: Only people have full trust in the country that issues the currency ~

And when printing technology has developed to an advanced stage that makes counterfeiting extremely difficult, banknotes can be accepted and become a medium of exchange.

Therefore, adding currency and finance together for study and research can allow us to establish an understanding of the important role of financial market structure, foreign exchange market, financial institution management, monetary policy, etc. in the economy using basic economic principles. .

. . .

Old Morgan read this preface twice, put it at the end with anticipation in his eyes, and turned to look at the following pages.

. . .

table of Contents:

first time

Chapter 1, why we should study the connection between currency, banks and financial markets.

Chapter 2, Overview of the Domestic Financial System

Chapter 3, The meaning and function of currency

(I’ve omitted a few hundred words here, it’s out of context.)

Chapter [-]

Chapter 1, Central Banks and the Federal Reserve System

Chapter 2, Money supply process

Chapter 3, Monetary Policy and Tools

Chapter 4, strategies and tactics of monetary policy operations

. . .

The catalog ends here.

However, there are still a few pages of the letter in Old Morgan's hand that have not been read.

He leaned back with interest, found a more comfortable position, and continued to read.

Chapter [-]

Chapter 1, Central Banks and the Federal Reserve System

About time-inconsistencyproblem

In our daily life, we have to face the problem of time inconsistency almost every day.

Usually, people who have a very regular life and work will make some plans for themselves every once in a while, and know that they will get good results in the plan.

But these plans. .It often changes with the constant changes~

For example: one day, when we were executing the plan step by step, we suddenly encountered an uncontrollable + irreversible event. We had no choice but to choose to abandon the previous plan and make the most appropriate changes.

In other words, we find that when we are executing a good plan, we encounter various unexpected factors, we can no longer remain consistent with the plan, and we must quickly abandon the plan. .

This is the problem of time inconsistency.

It was in 1977 that FE Kydland and EC Prescott, in their paper "Rules rather than discretion: Inconsistency in optimal planning", explained that policy implementation is often time-inconsistent. In the question, raised.

The same problem of time inconsistency is encountered in the work of monetary policymakers.

They seem more willing to pursue a laissez-faire monetary policy, allowing it to expand far beyond anyone's psychological expectations. .

And the reason they gave was actually. .Such monetary policy can quickly stimulate economic output or reduce unemployment in the short term. .

For example: Nixon’s New Deal in previous years!

Of course~

Many people also call it: the Nixon Shock. .

. . .

Nominal anchor!

Parents in daily life know that constant concessions in order to prevent their children from being naughty and aggressive will cultivate children who are overly arrogant, arrogant, arrogant, and even extremely ideological. .

but!

Even so, many young parents around us often meet their unreasonable demands in order to stop their children from crying.

Since these young parents are not adhering to the principle of "no concessions," their children will expect it. .As long as they do something really bad, they'll get what they want!

As a result, children will use this "winning" strategy over and over again until they are satisfied~

Therefore, many young parents who are rational, smart, and truly love their children often use the method of "leading by example" + "reasoning" to teach their children to correct their wrong behaviors, and help them understand the many rules of life and "correct their mistakes"~

Rules can effectively prevent adults from adopting a laissez-faire policy of concessions and help young parents solve most of the problems in educating their children.

A nominal anchor is also a behavioral rule.

So, what is the meaning and role of nominal anchor?

It is a nominal variable that locks in the price level and aims to achieve price stability.

Similar to it are: inflation and money supply.

Because price stability is critical to maintaining the long-term health of the economic system!

How to use nominal anchor, it becomes. .One of the core elements of successful monetary policy!

By pinning the nominal anchor and ensuring that nominal variables fluctuate within a narrow range, inflation expectations can be stabilized at a lower level range.

Then achieve the goals of price stability + reduction of unemployment rate.

And~

One of the more interesting reasons why nominal anchors are important is that they are very effective at limiting temporal inconsistencies!

However, what is mentioned here works. .It refers to the implementation of monetary policy based on laissez-faire and frequent adjustments, which will lead to long-term adverse consequences. .

(A few hundred words are omitted here.)

(Regarding the problem of time inconsistency, we often encounter it in our daily life ~ For example: the problem of inconsistent life schedules of family members is something that everyone will encounter...a big problem!)

. . .

Chapter [-]

Chapter 4, strategies and tactics of monetary policy operations

Implementing correct monetary policy is crucial to the healthy operation of the economy!

Cutting interest rates and excessively expansionary monetary policies will lead to inflation, reduce economic efficiency, and increase people's daily expenses and unemployment rate. .

Raising interest rates and overly tight monetary policies will lead to economic depression, reduced output, reduced investment in society, delays or reductions in people's consumer demand, and many other serious negative impacts.

In fact, deflation will make young people, under the cruel blow of various realities, no longer full of hope for their future, and develop an extremely negative mentality of low desire and no desire. .

If this sentiment gradually spreads among young people, it will lead to... .Use extremely favorable policies to stimulate them no matter what. .

None of them will rekindle the fire of hope to continue working hard~

Therefore, I hope this manuscript can give monetary policy makers some foresight and inspiration for the future direction!

. . .

When Old Morgan saw this, he couldn't help but put his own thoughts into the description of these few lines of fine print that David added to the manuscript. .

If the powerful negative impact of deflation really makes young people lose all their desires. .

What will happen to the United States?

Old Morgan, I don’t want to think about it any further~

Because that situation has been unforgettable for people who have experienced the Great Depression!

(The serious consequences of deflation are fully reflected in the young people of today’s island countries ~ low desire + no desire = completely peaceful life)

. . .

in the living room.

Old Morgan frowned, glanced at his wife Nariya, who was holding the letter in her hand and looking at the TV in a daze, and turned the manuscript to the last page.

Tactics of monetary policy operations!

We all know that the monetary policy of regulating the economic operation by regulating the money supply will be a strategy that the Federal Reserve Bank of America will most likely use to curb inflation.

but!

Ordinary investors lack reliable basis to judge the future federal basic funds rate.

Therefore, the federal funds rate should be equal to inflation + an "equilibrium" real federal funds rate + the weighted average of the two gaps.

Its simple calculation formula is as follows: (It is too professional, so I will not expand it here. If you are interested, you can check it yourself: Taylor's rule. It will be briefly introduced at the end of this chapter.)

With the calculation formula of this rule, investors can calculate the general direction and magnitude of the adjustment of the federal funds interest rate.

Of course~

Not every investor's estimated interest rate is exactly the same.

However, if we think further, we will find out. .

Very interesting phenomenon!

When the Fed is about to announce its latest interest rate adjustment, it must know what Wall Street is likely to do~

Wall Street, most likely, also knows how the Federal Reserve will adjust its monetary policy.

Even before the Fed made the adjustment decision, it had already predicted the reaction of the Wall Street capital market after the policy was launched. Of course, Wall Street would also know, and the Fed knew what kind of reaction it would have. .

In other words, I guessed your prediction, and you guessed mine. .

But before I guessed your prediction, I had already predicted your prediction. .

And you also know in your heart that I know that I have predicted your prediction. .

Talk around! ?

Hahahaha~

Therefore, with rules that most people recognize in their hearts, it is possible for the market to move in the direction everyone expects. .

The inexplicable positives are not as good as the predictable and stable negatives. .

This is the simplest and most practical truth!

after all. .No one likes to sit in the office all day and rely on the results of divination to predict the future direction of the market. .

- David Coleman, last modified early morning on December 1978, 12!

----

ps: I'm a little confused, there may be some mistakes and omissions, I hope you can understand.

Another: Taylor's rule, that is, the standard Taylor (Taylor) rule, is one of the commonly used simple monetary policy rules.

In 1993, Stanford University economics professor John Taylor proposed the Taylor rule based on actual economic data in the United States.

It describes the guidelines for how short-term interest rates adjust for changes in the rate of inflation and output.

Economics textbooks in many countries include detailed introductions to Taylor's rules.

Its calculation formula model is: nominal interest rate = real interest rate + inflation + 0.5x (inflation - inflation target) + 0.5x output gap.

Later, economists such as John Taylor proposed more similar rules based on the changing current situation and actual economic data.

For example: Taylor Rule 2.0, Evans Rule, Bruce Rule, etc.