Topic: Central Banking

Interest Rates, the Money Supply, and Say’s Law

– April 13, 2023

“Say’s Law absolutely helps us understand booms and busts on the demand side, but because of its emphasis on money, not interest rates.” ~ Alexander William Salter

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Have We Crested the Inflation Wave?

– April 7, 2023

“My view is the Fed should pause its rate hikes in the short-run. Disintermediation might be the cause of recent money-supply trends. In the long-run, the Fed should resume forward guidance, but not on interest rates.” ~ Alexander William Salter

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A CBDC Would Not Be Money in the Sense Used in the Constitution

– April 5, 2023

“A CBDC is not money because it is not a physical-bearer instrument, but rather by its very nature is trackable and cancellable, like a check or credit card payment.” ~ Robert E. Wright

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The Fed Isn’t Powerless

– March 10, 2023

“Responsible students of monetary policy must vigorously resist the ‘powerless Fed’ myth. All it does is absolve central bankers of responsibility for what, on the basis of good theory and mounting evidence, is primarily their fault to begin with.” ~ Alexander William Salter

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Does Government Spending Lead to Inflation?

– December 27, 2022

“The key point is that it is the central bank’s willingness to help finance government spending, not the spending itself, that drives inflation. In short: inflation remains a monetary phenomenon.” ~ Bryan Cutsinger

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Does the Fed Control Interest Rates?

– December 26, 2022

“The Fed is a failed institution in need of major reforms. But we won’t make the right changes if we don’t understand the basic relationship between central banks and capital markets.” ~ Alexander William Salter

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Supply, Demand, and Inflation: The Big Picture

– December 17, 2022

“Where did all this inflation come from? Supply-side issues are a problem, but in terms of magnitudes, it just doesn’t make sense to call them the chief contributor.” ~ Alexander William Salter

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The Federal Reserve’s Expanding Mandate (Video)

– December 14, 2022

“In this video, Kate Wand sat down with AIER Senior Research Faculty Thomas Hogan to discuss the Federal Reserve’s expanding objectives and how they affect its ability to conduct monetary policy.” ~ AIER

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CBDC in the USA: Not Now, Not Ever

– December 13, 2022

“The fact that the New York Fed, in conjunction with a handful of private banks, has implemented a ‘pilot’ program with digital tokens is worrying enough. Under no circumstances should we allow the government to roll out a CBDC.” ~ Alexander William Salter

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CBDCs: What Can We Learn From Dollarized Countries?

– November 13, 2022

“How much more could FDR have done had he had a CBDC? The risk of a CBDC goes beyond the serious issue of financial privacy.” ~ Nicolás Cachanosky

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Helping Banks Help Themselves: Extended Shareholder Liability

– October 27, 2022

“The best way to reduce systemic risk is to give the risktakers the incentive to economize on risk. An extended liability regime for banking is a simple and elegant way to improve incentives. We should seriously consider it.” ~ Alexander William Salter

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Inflated Hopes and Burst Bubbles

– October 18, 2022

“The Fed’s chief task is to restore its lost credibility. In retrospect, the switch to average inflation targeting was a mistake. It gave the Fed plausible deniability for noisier, less predictable policy.” ~ Alexander William Salter

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