Monetary Policy

Thursday, April 21st, 2011
"Previous statements about exits by Fed officials simply listed the tools that could be used in an exit strategy, but did not actually put forth an exit strategy. In contrast, President Plosser describes a specific strategy.
Wednesday, April 20th, 2011
"Gold rose above $1,500 an ounce to a record in New York and London as a weaker dollar and concern about debt and faster inflation spurred demand for an alternative investment. Silver reached a 31-year high.
Wednesday, April 20th, 2011
The Conclusion: The native inhabitants of Shell Island were living under growing pressure. For generations they had lived quiet lives tending their coconut trees, weaving their straw hats, and perfecting their massage techniques. With the arrival of the Outsiders, however, things had changed…
Wednesday, April 20th, 2011
"In fact, there's a big difference between the three scenarios before the Fed. One option would be to keep QE2 going after June, continuing to grow the Fed's balance sheet. The second option would be to kill QE2, but keep QE1.5 intact, leaving the size of the Fed's balance sheet unchanged.
Wednesday, April 20th, 2011
"The economics profession not only failed to predict the recent financial crisis, but has been struggling in its aftermath to reach a consensus on the cause(s) of the crisis.
Friday, April 8th, 2011
"The devaluation of the British pound from $2.80 to $2.40 is not only another declaration of the bankruptcy by Great Britain; it is another revelation of the bankruptcy of the international money system concocted at Bretton Woods, N.H., in 1944."
Thursday, April 7th, 2011
The Greenspan-Bernanke explanation on the cause of the financial bubble rests on the theory of the saving glut.
Wednesday, April 6th, 2011
"The Federal Reserve shows few signs of easing its aggressive efforts to stimulate growth before the middle of the year, according to the minutes of the most recent meeting of the central bank’s policy making committee.
Monday, April 4th, 2011
"Most central banks chose to ignore commodity prices, like food and oil, because (1) they are overly volatile and (2) a central bank can’t take any countervailing action.
Wednesday, March 30th, 2011
"The benefit of maintaining price stability in the eurozone as a whole, and thereby keeping the inflation risk low, becomes even greater in times of crisis. At the height of the financial crisis, the ECB lowered interest rates aggressively in the face of downside risks to price stability.
Wednesday, March 30th, 2011
"We have learned much about the unemployment-inflation trade-off and about monetary policy during the last 25 years.
Tuesday, March 29th, 2011
"One would hope that the supposed “great minds” at the Fed and in academic economics would better understand inflation and its destructiveness, but that is not to be. First and most important, the lack of inflation is not the enemy of the economy.
Thursday, March 24th, 2011
"The question of how humans come to trust anonymous others has been addressed by both economists and evolutionary psychologists recently. However, the idea of monetary calculation, as articulated by Ludwig von Mises and other Austrian school economists, is missing from their accounts.
Wednesday, March 23rd, 2011
"When the Federal Reserve began telegraphing late last summer that it would launch a new round of monetary stimulus to help the U.S. economy, Wall Street assumed that the dollar would be the sacrificial lamb.
Tuesday, March 22nd, 2011
"Economic theory has an amazing ability to explain the world around us. It explains human behavior of all sorts, from the mundane to the deadly serious, from the trivial day-to-day of our lives to the most important policy issues.
Monday, March 21st, 2011
"While the world has focused on fuel rods in Japan and fighter jets in Libya, issues that are ultimately much more significant for investors have gone largely ignored. For example, the Producer Price Index for February registered a 5.6% Year-Over-Year increase.
Thursday, March 17th, 2011
"I long have believed there are two schools of thought on our current economic crisis and its effect on the federal government’s budget. The first is that the government must stop destroying the dollar, cut back all spending, and give up trying to “stimulate” the economy back to health.