Topic: Central Banking

The Fed Delivered Disinflation

– November 16, 2023

“Most prices are higher today than they would have been had they grown at an average rate of 2 percent since January 2020. We oughtn’t pin a medal on an arsonist’s chest for putting out a fire he started.” ~Alexander W. Salter

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Dollarization Is A Cost-Effective Solution for Argentina

– November 11, 2023

“If Argentina lacks the resources for dollarization, it most certainly does not possess the means to rescue the peso. The alternative is to continue on the current course, and approach dollarization under circumstances akin to Zimbabwe.” ~Nicolas Cachanosky

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WeInflate, WeMalinvest, WeWork 

– November 9, 2023

“Companies founded in easy money periods will tend to be the most vulnerable. Many firms will survive the credit crunch, but few will emerge unscathed.” ~Peter C. Earle

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The FOMC Was Right to Not Hike

– November 7, 2023

“The best approach for the FOMC is to keep its rate target where it is. We should wait for additional inflation data in November before calling for even-tighter monetary policy.” ~Alexander W. Salter

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Rising Treasury Yields Can’t Substitute for Fed Rate Hikes

– October 28, 2023

“If the yield curve is the explanation, then market forces aren’t ‘substituting’ for Fed policy. They’re simply reflecting an economic transition from one microeconomic equilibrium in the market for loanable funds to another.” ~Alexander W. Salter

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Inflationary Growth is Fake News

– October 4, 2023

“Economic growth means more output. Comparatively less money chases comparatively more goods. All else equal, prices across the economy should fall.” ~Alexander W. Salter

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Inflation was Worse than We Thought

– September 30, 2023

“Although Fed officials were late to tighten monetary policy, their efforts over the last year appear to have worked. The risk today is that monetary policy is too tight—and will remain so for too long.” ~William J. Luther

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How Crazy Do You Have to Be to Support Dollarization?

– September 28, 2023

“The whole reason why it is an advantage for a developing country to tie to a major country is that historically speaking the internal policies of developing countries have been very bad. US policy has been bad, but their policies have been far worse.” ~Nicolás Cachanosky

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What Should the Federal Reserve Do Now?

– September 26, 2023

“Inflation is running above 2 percent by any measure, and a current temporarily higher rate on short-term securities can reassure markets that the Federal Reserve is aiming at a lower inflation rate.” ~Gerald P. Dwyer

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Another Rate Hike? Let’s Not

– September 26, 2023

“Interest rate and liquidity data point to the same conclusion: monetary policy is sufficiently tight. Further tightening could cause a painful economic contraction.” ~Alexander W. Salter

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How To Be Accidentally Right, Central Banking Style

– September 24, 2023

“Money is broken, and while these activists might not be able to explain how, they’re not wrong in pointing their fingers at the monetary authority at the center of it all.” ~Joakim Book

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Fed Continues to Signal Another Rate Hike

– September 20, 2023

“If core inflation is more or less on track, why are most FOMC members projecting another rate hike?” ~William J. Luther

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