Monetary Policy

Thursday, March 17th, 2011
"Whether giving public lectures or teaching at the Mises Academy, I'm often asked whether Bernanke will be able to "pull this off." Specifically, can the Fed gracefully exit from the huge hole it has dug for itself? Unfortunately my answer is no.
Thursday, March 17th, 2011
"Summarizing an IMF conference, Olivier Blanchard lists nine points. I will make extended comments below the fold. Here is a crucial sentence:
Wednesday, March 16th, 2011
"By 2020, public debt in the United States is set to reach 90 percent of GDP, a line that many economists demarcate as when accumulated debt pushes an economy to the precipice of fiscal demise.
Wednesday, March 16th, 2011
"The sharp rise in oil prices is a major concern for economists. In a recent survey by CNNMoney, economists identified the oil spike as the biggest headwind facing the nation's economic recovery. And some fear that unlike previous scares, higher prices could hit consumers.
Wednesday, March 16th, 2011
"According to mainstream thinking, the stronger the monetary pumping is, the stronger the pace of spending — and consequently the stronger the monetary income and the so-called real economy is going to be.
Wednesday, March 16th, 2011
The emergence (note I don’t say “invention”) of money stands out as one of the great boons to human economic development. Life before money was frustrating.
Tuesday, March 15th, 2011
"In the previous chapter, we discussed why the current crisis presents the real risk of deflation if monetary velocity falls and does not rise. However, there are many reasons to believe that we will not see deflation. The major mistake that deflationists now make is their focus on spare capacity.
Friday, March 11th, 2011
"The first fact that needs to be noted in answering such questions is that inflation is detrimental to all creditors. The higher prices rise, the lower will fall the purchasing power of the principal and interest payments due.
Thursday, March 10th, 2011
"Up until recently, there was pretty overwhelming support by central bankers to keep U.S. interest rates low by buying up bonds in a second round of quantitative easing with the goal of boosting our slow-growing economy.
Wednesday, March 9th, 2011
"The Obama administration nominated Diamond as an ally to Federal Reserve Board Chairman Ben S. Bernanke and other members who have sought to provide an additional jolt of stimulus to the economy by buying long-term Treasuries.
Monday, March 7th, 2011
"Lately, that seems to be the message coming from current and past Fed officials regarding the housing and credit boom in the early-to-mid 2000s. First Ben Bernanke, then Vincent Reinhart, and now Janet Yellen have come out saying it was excess savings by foreigners and failings in the U.S.
Monday, March 7th, 2011
"The danger for Bernanke in politicizing the Fed, some economists and academics say, is that it makes it easier for Congress and the White House to pressure the Fed to make decisions that are politically popular but not good for the economy.
Thursday, March 3rd, 2011
"Federal Reserve Bank of Kansas City President Thomas Hoenig said the central bank is “monetizing debt” with its purchases of U.S. Treasuries, a program that he says may spur inflation.
Thursday, March 3rd, 2011
"The greenback, in other words, is not just America's currency. It's the world's. But as astonishing as that is, what may be even more astonishing is this: The dollar's reign is coming to an end.
Wednesday, March 2nd, 2011
"“I just see a continuation of rising prices for the average family,” at a time where the Fed is constructing policies to ward off what it sees as the threat of deflation, Sen. Bob Menendez, a New Jersey Democrat told Bernanke.
Wednesday, March 2nd, 2011
"In the midst of the current financial crisis the economics profession has seen a monumental resurrection of Keynesian ideas. The debate, which Keynes started back in the 1930s, is being picked up again, not where it left off, but in exactly the same place it started.
Monday, February 28th, 2011
"Friedman, as with the other papers that day, found inflation to be a massive problem. In fact, next to the threat of a third world war, inflation is what he finds to be the most serious threat to the preservation of a free society.
Monday, February 28th, 2011
"As recently as last month, governments of emerging economies from South Africa to Brazil warned that competitive devaluations might be needed to keep their strengthening currencies from stifling economic growth.
Friday, February 25th, 2011
"The world's currencies are gyrating, but the strains are being felt beyond financial capitals and corporate boardrooms.
Friday, February 25th, 2011
"Unfortunately for defenders of Fed policy, today’s paper is filled with stories of rising inflation. In Singapore, consumer price inflation is running at 5.5%. In Vietnam, consumer price inflation is running at over 12%. There are food riots in India.

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