Dangerous Monetary Manipulations and Fiscal Follies
“What is clear is that the types of monetary, fiscal and regulatory policies being implemented and projected by the Biden Administration, the Democrat-controlled Congress and the Federal Reserve are all leading America down a dangerous and destabilizing road, any recovery from which will not be easy or cheap.” ~ Richard M. Ebeling
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Rising Interest Rates and Inflation
“A 5 to 10 percent jump in inflation expectations could be enough to set off a fiscal crisis for the federal government. And a fiscal crisis could be enough to generate a crisis of confidence in the dollar. There are numerous traps to avoid on the road ahead. Yet, monetary and fiscal policy both continue on expansionary paths with the greatest boldness that we have seen since the chairmanship of Arthur Burns.” ~ James L. Caton
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The Back Door to Universal Basic Income
“Low and falling barriers for lockdowns, stay-at-home orders, and other government-mandated nonpharmaceutical interventions are acting as a back door for the silent implementation of UBI & MMT schemes.” ~ Peter C. Earle & Kristoffer J. M. Hansen
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In Finance, Slow is Good
“What the central bank RTGS/LSM two-step teaches us is that we need a good balance between fast and slow. Sure, real-time settlement is a nice feature. But let’s also have delayed settlement. If brokerages have a choice to use some combination of two-day and real-time settlement, we may arrive at a socially optimal stock settlement rate.” ~ J.P. Koning
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Escape Hatches: Migration, Bitcoin, and the Ability to Get Out
“Keep more mobile assets; have larger buffers, financial and physical; instead of a large house in a nice suburb, perhaps aim for a smaller home coupled with a condo or house in a different jurisdiction? Don’t put all your financial eggs in one portfolio – keep some gold and some bitcoin; keep healthy; update your survivability skills. Ensure that your escape hatches remain open.” ~ Joakim Book
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Yes, This Time We’ll Have Inflation, and Here’s Why
“The political forces supportive of anti-growth policies such as trade restrictions, higher minimum wages, perverse energy regulations, and cronyism appear to be on the rise, and they will dampen future growth. But inflation is going to be the big story of the post-pandemic economy. Get ready for an inflationary ride.” ~ James D. Gwartney
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Central Banking and the Heavy Hand of the State
“The ‘need’ for a central bank is due to economists inaccurately projecting onto historical banking systems their contemporary monetary-macroeconomic paradigms, not any fatal flaw in these systems. Neither theory nor history show we need a central bank to guarantee optimal economic performance.” ~ Alexander W. Salter
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The Banking System and the Evolution of Money
“Many of the public policies that shackle the financial sector are designed to do so, because they help governments accomplish some other political objective. Engaging these political considerations, and how they impinge on banking and finance, is critical if we want to understand the history of monetary institutions, especially in the United States.” ~ Alexander W. Salter
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Do These Money Supply Charts Portend Hyperinflation?
“Financial markets indicators suggest that high inflation is not likely. Even with a very large balance sheet, the Fed has proven that it can control inflation by paying high rates of interest on bank reserves. Whether Fed officials choose to do so is the open question.” ~ Thomas L. Hogan
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Will the Fed’s “Feelgood” Medicine Cause an Economic Collapse?
“The promise of cheap money leading to perpetual asset price sunshine may seem like a reality today. Tomorrow the consequences will be like Dr. Feelgood’s needles. To avoid the worst, markets—not politicians or bureaucrats, must be free to uncover the real cost of borrowing money.” ~ Barry Brownstein
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That Mystical Monetary Theory
“The MMT mistake lies in believing that any alleged shortfall in money or supply of U.S. Treasuries is big enough to finance their entire policy wish list for the foreseeable future. It also assumes that any potential labor or capital goods not currently used can be effortlessly moved to whatever production line politicians desire, without causing prices or wages to increase.” ~ Joakim Book
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Incentive Problems with Discretionary Central Banking
“Discretionary central banking creates bad incentives. To overcome bad incentives, we must take away the discretion. The Fed, so long as it exists, should follow a rule.” ~ Alexander W. Salter
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