Sound Banking

Thursday, April 21st, 2011
The problem of bank runs is probably the most serious concern in monetary economics. It is clear that if all clients claim back their depositors together the bank will fail.
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.
Monday, April 18th, 2011
"America currently has $14 trillion in debt on the books and another $70 trillion or so in unfunded entitlements and pensions that are not yet on the books. These debts will never be repaid with dollars at current value.
Tuesday, April 12th, 2011
One of the main virtues of sound money is stability.
Thursday, April 7th, 2011
"As to where the money is coming from, Humphrey announced, "We can pay for it out of a growing, expanding economy. And it is actuarially sound." It is depressing to record that three days later, on Sept.
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
"A European bank that received the most Federal Reserve discount window help during the financial crisis also took $381 billion in aid from its home countries and owned subsidiaries implicated in bid-rigging that prosecutors say defrauded U.S. taxpayers.
Tuesday, April 5th, 2011
"The loans, made through the so-called discount window, transformed a little-used program for banks that run low on cash into a source of long-term financing for troubled institutions, some of which borrowed regularly from the Fed for more than a year.
Monday, April 4th, 2011
There’s plenty of frustration, irritation, and anger at banks during times of financial crisis and recession. Complaints run the gamut: bank over-exuberance (“predatory lending”) fueled the boom, and their under-exuberance (tight credit) contributes to the bust.
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.
Friday, April 1st, 2011
“Inflation can adversely affect corporate profits, household discretionary spending, and stock prices. Rising costs for raw materials have a dampening effect on profits. Increasing costs of food and energy begin to account for larger and larger portions of a household’s disposable income.
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.
Monday, March 28th, 2011
"The financial strains created by crises in Japan and Europe highlight a growing problem: The rich world is getting close to the point where it won't be able to bear the costs of another disaster.
Friday, March 25th, 2011
"Costly though it has been, the financial crisis has merely brought forward a fiscal reckoning. In most of the rich world ageing populations have been driving up the cost of public health care and state pensions.
Thursday, March 24th, 2011
In conventional microeconomics the monopoly is associated with inefficiency. Under perfect competition there are no deadweight losses. This means that resources are efficiently allocated. The monopoly, on the other hand, provokes inefficient production by choosing a low level of production.
Wednesday, March 23rd, 2011
"In a series of newspaper columns last year, Don Boudreaux compared the economy to a giant jigsaw puzzle with billions of pieces that can fit together in numerous combinations only a small number of which produce a meaningful pattern or picture.
Wednesday, March 23rd, 2011
"The ostensible reason for the currency interventions was to promote stability. According to David Mann, head of research for the Americas at Standard Chartered Bank. "This is about limiting volatility and reducing uncertainty."
Tuesday, March 22nd, 2011

The most important matter to anyone concerned with expanding freedom by limiting government is the matter of sound money. In fact the definition of sound money boils down to freedom of choice in money.