From Bruce: "You commonly refer to "moneyness" in your columns. Wikipedia defines it as:
"In finance, moneyness is the relative position of the current price (or future price) of an underlying asset (e.g., a stock) with respect to the strike price of a derivative, most commonly a call option or a put option."
Is that the sense in which you are using the term, or do you have another definition?"
CBB response: I stress that contemporary money rests upon perceptions of safety and liquidity. Money is something that folks believe is a safe and liquid store of (nominal) value. This perception essentially creates unlimited demand - with all the associated issues (over issuance! and the myriad effects of monetary inflation). "Moneyness" is a perceived attribute of safety and liquidity (typically from government assurances/support) that creates a degree of extraordinary and self-reinforcing demand - especially for risk assets (stocks, fixed-income, derivatives) Moneyness is fundamental to credit and market bubbles. Bubbles falter when the marketplace inevitably questions (perceptions shift) the safety and liquidity of the underlying credit and financial instruments.
