The only relevant test of the validity of a hypothesis is comparison of prediction with experience. Milton Friedman More Quotes by Milton Friedman More Quotes From Milton Friedman The lesson for Asia is; if you have a central bank, have a floating exchange rate; if you want to have a fixed exchange rate, abolish your central bank and adopt a currency board instead. Either extreme; a fixed exchange rate through a currency board, but no central bank, or a central bank plus truly floating exchange rates; either of those is a tenable arrangement. But a pegged exchange rate with a central bank is a recipe for trouble. Milton Friedman asiarecipeswant If China don't free up the political side, its economic growth will come to an end - while it is still at a very low level. Milton Friedman levelsgrowthpolitical Hong Kong is the bellwether. If the Chinese stick to their agreement to let Hong Kong go its own path, then China will also go that way. If they don't, that is a very bad sign. I'm optimistic. Milton Friedman chineseoptimisticagreement The problem is that, in a world of floating exchange rates, as Italy was before the euro, if one country is subjected to a shock which requires it to cut wages, it cannot do so with a modern kind of control and regulation system. It is much easier to do it by letting the exchange rate change. Only one price has to change, instead of many. Milton Friedman floatingcuttingcountry Japan has introduced fiscal stimulus five times in the past seven or eight years and each time it's been a failure and that's not a surprise. Fiscal stimulus is not stimulating in and of itself. Milton Friedman japaneightpast Personal freedom has grown greatly within China, and that will provoke ever more points of conflict between the individual and state. Milton Friedman individualconflictstates I believe that the monetary stability is an absolutely critical element in the satisfactory operation of a system. Milton Friedman operationselementsbelieve Undoubtedly Internet has reduced the possibilities of taxation. Why should I buy something here if I can buy it from a company in Japan or England or Brazil with a lower tax? Milton Friedman braziltaxationjapan There's no way to avoid a burden on your freedom. The costs themselves are a burden on your freedom. The restrictions that are necessary in order to get rid of the terrorists are a burden to your freedom. So there's no way in the short run to avoid a restriction on your freedom. Milton Friedman costrunningorder We measure poverty by what I believe is a very, very crude concept. We actually measure poverty by trying to get some kind of an estimate of the minimum expenditures on food that are required to maintain health, multiplying that number by three, and saying that's the level of poverty. And it's a very crude, inaccurate arrangement. Milton Friedman numberstryingbelieve What central banks can control is a base and one way they can control the base is via manipulating a particular interest rate, such as a Federal Funds rate, the overnight rate at which banks lend to one another. But they use that control to control what happens to the quantity of money. There is no disagreement. Milton Friedman interestuseway China's productive system draws upon the other East Asian countries to a great extent. The volume of trade is much larger than the net amount being exported from China. China needs substantial reserves to finance all that. Milton Friedman eastasiancountry I can spend somebody else's money on somebody else. And if I spend somebody else's money on somebody else, I'm not concerned about how much it is, and I'm not concerned about what I get. And that's government. And that's close to 40 percent of our national income. Milton Friedman incomeconcernedgovernment Rich people are the experimental ground for every new development. The nature of progress is that what begins as a luxury for the rich becomes a necessity for the poor as it's developed and passed on. Milton Friedman luxuryprogresspeople Germany's problem, in part, is that it went into the euro at the wrong exchange rate that overvalued the deutsche mark. Milton Friedman germanymarkproblem The stock market crashed in October 1929. But that was not the cause of what caused the Great Depression. It was, in my opinion, a very minor element of it. What happened was that from 1929 to 1933 you had a major contraction which, in my opinion, was caused primarily by the failure of the Federal Reserve System, to follow the course of action for which it was set up. It was set up to prevent exactly what happened from 1929 to 1933. But instead of preventing it, they facilitated it. Milton Friedman octoberelementscauses Germany has a very able and productive workforce. It has high-quality products that are valued all over the world. It has every opportunity to be a productive, growing state. It just has to give its entrepreneurs a chance. It has to let them make money, hire and fire, and act like entrepreneurs. Milton Friedman fireopportunitygiving When they so-called 'target the interest rate', what they're doing is controlling the money supply via the interest rate. The interest rate is only an intermediary instrument. Milton Friedman targetinstrumentsinterest If instead of looking at income, you look at levels of consumption, if anything that's become more equal. The fraction of families that have a dishwasher, that have a sewing machine, that have a television set. In respect to consumption, it's very hard to avoid the view that people have been getting more equal rather than more unequal. Milton Friedman incomeviewspeople No central banker would disagree with the proposition that inflation is primarily a monetary phenomenon. Not one of them will disagree that every inflation has been accompanied by a rapid increase in the quantity of money and every deflation by a decline in the quantity of money. Milton Friedman increaserapidsbankers
