Some claim that, over the last decade, tight monetary policy slowed down what would otherwise have been a rather speedy recovery. Can that possibly be right?
What does the Austrian theory of the trade cycle have to do with Gordon Ramsay? Plenty.
We rely on competitive markets to supply us with “correct” quantities of goods and services ranging in importance from chewing gum to industrial chemicals, and from pedicures to petroleum. So why do we not rely on competitive markets to supply us with the “correct” quantity of money?
The Federal Reserve has created so much base money that it has found itself between the devil and the deep sea: choosing whether to let the money circulate in the economy, thereby pushing up prices, or to remove this money quickly, thereby potentially creating a deflationary spiral.
Money is not just what the government says it is. The market has been struggling to create alternatives for a very long time.
Would a self-governing society ever choose to delegate the broad monetary, financial, and regulatory powers now enjoyed by central banks?