Problems of Federal Reserve Policy—and How to Solve Them
“To stabilize the economy, informed citizens must study the faults of discretionary central banking and call for reforms to protect against them. ‘Money and the Rule of Law’ accomplishes the first goal. The second is up to us.” ~ Thomas L. Hogan
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Is the Fed Paying Banks Not to Lend?
“The evidence shows that banks treated excess reserves as a profitable alternative to loans. High rates of IOER caused them to increase reserve holdings and decrease their loan allocations. The Fed was indeed paying banks not to lend.” ~ Thomas L. Hogan
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Why Do Inflation Expectations Matter?
“Powell is telegraphing to the market that he hears their concerns about inflation. We will have to wait through the next several months to learn whether or not investors will be convinced.” ~ James L. Caton
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Argentina’s Creative Approaches to Debt Write Offs
“Whereas some private vulture funds found brutal means to achieve full repayment on their assets, international public institutions such as the IMF were repeatedly willing to take over the risk. This leniency may be due to the fact that the international taxpayers seem unaware of the burdens. It has to be seen which strategies will be observed in the future in the industrialized countries.” ~ Gunther Schnabl & Nils Sonnenberg
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The Fed Targets a Crafted Measure of Inflation: A Cautionary Tale
“Understanding government data for what they are and what they are not is vital to understanding the impossibility of targeting the cost of living, even though the Fed is targeting a crafted measure of price inflation.” ~ Gregory van Kipnis
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Monetary Inflation’s Game of Hide-and-Seek
“Whether the CPI records a higher or a lower rate of general price inflation, the more deleterious effects resulting from monetary inflation are those relative price and wage distortions, and resource, labor and capital misallocations and misdirection, that are hidden beneath the ‘surface’ of the general price level, but nonetheless set in motion the phases and consequences of the business cycle.” ~ Richard M. Ebeling
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There Is No Avoiding the Long Run: A Low Interest Rate Environment Is a Low Growth Environment
“We’ve trod down the post-Bernanke path long enough to learn that the cost of following a policy of resource allocation by the Federal Reserve instead of allowing a modestly higher rate of inflation is lower growth of real income.” ~ James L. Caton
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Monetary Control: Central Banks Today
“The Fed’s operating framework systematically tends towards the abuse of life, liberty, and property. If we want to fix this, we need to take a much closer look at the relationship between money and freedom. Only if we understand this relationship, philosophically, economically, and historically, will we be in a position to fix what’s gone wrong with our monetary institutions.” ~ Alexander W. Salter
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Assessing Potential for Higher Inflation
“Monetary policy is intentionally supporting fiscal policy and supporting levels of indebtedness from the Federal government that are unprecedented. The result has been an explosion of M2 that increases the risk of inflation. There is a fair chance that policymakers will succeed. But, for the possibility of success, they risk a monetary-fiscal crisis.” ~ James L. Caton
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The Lumber Market Delirium
“A sordid cocktail of Covid lockdowns and expansionary monetary policy have led to explosive conditions in long-docile lumber markets.” ~ Peter C. Earle
READ MOREThe Rise of Bitcoin
“The blockchain technology at bitcoin’s core provides a new and fundamentally different way to process payments. It relies on neither decentralized nor centralized clearing. Instead, it processes transactions over a distributed network. And, by solving the double spending problem without recourse to a trusted third party, it has the potential to offer a degree of financial privacy comparable to decentralized payment mechanisms like cash.” ~ William J. Luther
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Make No Mistake: Programmable Digital Currencies Are Weaponizable Money
“Money, in its most basic form, is an irreplaceable facilitator of economic calculation and a social instrument making cooperation possible on a global scale. Policies of the sort which programmable digital currencies bring into the realm of possibility potentially turn those on their head, introducing new possibilities for intentional––and systematic––coercion.” ~ Peter C. Earle
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