Topic: Monetary Policy

The Fed Can’t Solve Our Economic Woes

– August 16, 2010

A policy of low interest rates is a textbook response of monetary authorities to the economic weakness brought on by deficient aggregate demand. The policy is justified by pointing to various ways in which money can promote economic activity—including …

READ MORE

“Treasury Fixing Mortgage-Finance System Juggles Limitless Bailout, Economy”

– August 16, 2010

“The U.S. Treasury Department, hosting a summit tomorrow on how to repair the mortgage-finance system, may get a blunt message from stakeholders in an industry tied to 15 percent of the country’s economy: Don’t screw it up. The system’s size and comple …

READ MORE

“In a Sluggish Economic Summer, No Easy Fix Ahead”

– August 13, 2010

“Typically, the Fed can lower interest rates to encourage Americans to borrow money and spend it, invigorating the economy. But the benchmark interest rate controlled by the Fed has been almost zero for more than a year now. The Fed this week took a ne …

READ MORE

“Fed Official Warns of Starting a Cycle of Boom and Bust”

– August 13, 2010

“In a sharply worded dissent to the Federal Reserve’s decision to help ease the supply of credit to the economy, a member of the Fed committee that sets interest rates said Friday that the central bank’s monetary strategy could backfire and touch off a …

READ MORE

Idle Resources Don’t Eliminate Inflation

– August 13, 2010

One of the gravest sins of modern economics is its tendency to treat resources, both capital and labor, as essentially homogenous aggregates. Capital is more or less interchangeable with other capital, and labor is treated much the same. One reason for …

READ MORE

“The Austrian Theory: One More Time”

– August 12, 2010

“The Austrian theory is not a theory of recessions per se; it is a theory of the unsustainable boom. As such, it has a much stronger link to the underlying microeconomics than does much of today’s mainstream theorizing. The Austrians focus broadly on c …

READ MORE

Monetary Policy and Productivity

– August 11, 2010

“This relationship holds, I believe, because low inflation tends to focus people’s attention on productive investments at the same time it promotes confidence by delivering stability, while high inflation tends to encourage speculative investments and …

READ MORE

“Fed Economic Outlook Sends Investors to Gold”

– August 11, 2010

“The Fed’s commitment to maintaining liquidity and its deteriorating growth outlook are broadly speaking bullish for gold,” said Standard Bank analyst Leon Westgate. Gold is often seen as a stronger store of value than equities and other commodities in …

READ MORE

Deflation and Liberty

– August 11, 2010

“The link between the paper dollar and the exponential expansion of public debt is well known. From the point of view of the creditors, the federal government controls the Federal Reserve—the monopoly producer of paper dollars—and it can therefore neve …

READ MORE

“The High Costs of Very Low Interest Rates”

– August 11, 2010

“The prevailing view among economists, policy makers and Federal Reserve Board governors is that a zero or near-zero short-term interest rate stimulates the economy—the lower the rate, the better. It is time to re-examine this conventional wisdom. In f …

READ MORE

“Gold Is Steady Ahead of Fed”

– August 9, 2010

“Spot gold was mostly flat early Monday in a quiet start to the week, as market participants await the Federal Reserve meeting Tuesday. Analysts said they expected the Fed’s comments this week to indirectly boost gold.” Read more. “Gold Is Steady Ahead …

READ MORE

“Dollar Bears Will Soon Have Had Their Day”

– August 5, 2010

“Dollar bears should soon be hiding their faces. A combination of soft U.S. economic data, over cautious Fed officials and sliding Treasury yields have all raised expectations of more quantitative easing. As a result, the dollar has been sold heavily o …

READ MORE