Friedman Rule Puns

Can anyone help me understand the friedman rule? I fail to understand how keeping the nominal rate at 0 helps to offest the opportunity cost for the holder of money.

My question is how setting nominal interest rate to 0 (According to him) would generate negative growth in the long run? wouldn't that do the opposite and promote investment which promotes growth and further inflation?

There's been some discussion here on Noah's recent blog post on Milton Friedman's legacy, and while I'm sure there are people here who can evaluate the whole post better than I can, there's one bit that stuck out to me:

>This is the idea that nominal interest rates should be set at zero. It generally contradicts the k-percent money growth rule, unless setting rates at zero just happens to make the money supply grow at a constant rate (how much of a PR badass are you if you can get your name on two mutually contradictory rules?). Interestingly, the Friedman Rule is based on Neo-Fisherism - it says that rates should be at zero because in the long run, low interest rates are deflationary and mild deflation is what we want.

Noah's explanation of the Friedman rule as Neo-Fisherism is backwards. The argument isn't that low interest rates cause deflation, which is good, but rather that deflation causes low nominal interest rates, which are good. In a cash-in-advance economy, if people want to purchase goods tomorrow, they have to set aside some of their income today as money. Since money pays zero nominal interest (usually), people would rather hold assets that pay some positive nominal return, but because of the cash-in-advance constraint, they have to hold some money. The idea behind the Friedman rule is to eliminate the deadweight loss, commonly called shoe leather costs, associated with having to hold money instead of assets with positive returns. If money pays the same returns as other assets, then shoe leather costs are zero. Maybe if Noah had paused and asked himself "why did Friedman think mild deflation is what we want?" he wouldn't have made this mistake.

The other mistake Noah makes is to claim that the Friedman rule contradicts the k% rule. It may be that Noah's stuck thinking in an NK framework, but in a monetarist framework, you don't look at interest rates to judge the stance of monetary policy (as Sumner so often points out), but rather the money supply. In monetarist models, the central bank sets the money supply, which determines inflation through the quantity theory of money, which determines nominal interest rates through the Fisher effect. Noah argues that this doesn't work out in reality (see points 2 and 3 in his post), but I'll leave that

https://bitcointalk.org/index.php?topic=645083.msg7207401#msg7207401

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see link with reference to the k-percent rule -

Quark was breaking new ground adopting the SIF basic principal, the important difference was the fixed nature of the Quark design - which is more adaptable to the divisible nature of Crypto currency .