The value of money today depends on the the value of money yesterday; the value of money yesterday depends on the value of money the day before that; and so on.
READ MOREEven when a policy is successful in achieving its desired ends, we have to consider its unintended and unforeseen consequences, resulting from cumulative market adjustments to policy changes that make it hard to judge the overall outcome of a policy in …
READ MOREMy previous post was a crash course on the role of prices in a market economy. Importantly, prices are money prices. The vast majority of the time, producers accept the medium of exchange as payment for goods and services, and post prices denominated …
READ MORECheap money becomes very expensive in the long run. In my new book, “Escape from the Central Bank Trap” (Business Expert Press), I explain that central banks are using the same inflationary policies that led us to the financial crisis. However, this ti …
READ MOREOur worldviews shape the ways in which we approach problems, challenges, and questions. Our “worldviews,” as I refer to them in this post, are so deeply embedded in our minds that we don’t usually realize our thoughts are driven by them. Monetary polic …
READ MOREReserves are greater than they were before the crisis because, beginning in 2008, the Fed created more reserves. It did so in the process of expanding its balance sheet. Reserves will not fall—indeed, cannot fall—until the Fed shrinks its balance sheet.
READ MOREThis piece originally appeared in Learn Liberty The gold standard is both a strongly advocated and vehemently opposed monetary regime. Both positions, however, usually rely on misconceptions on what the gold standard actually is and why it failed. Belo …
READ MOREHave you read about tens of billions of U.S. dollars — sometimes over $100 billion — “flowing out of China” every month?
READ MOREThe Euro zone CPI data continues to show the rising trend we commented here (read). In January inflation rose by 1.8% year-on-year, the highest reading since February 2013. However, while inflation expectations rise, markets remain stale. The stock mar …
READ MOREA price is an exchange ratio: you must give up a certain amount of one good in order to get another good. Barter economies have prices, which are expressed as ratios of the goods themselves. In money-using economies, prices are expressed in the econo …
READ MOREIn recent years, economists and central bankers have been advocating moving away from cash transactions towards an economy relying fully on financial transactions. At prima facie, this seems to be a good idea. Using checks and financial transfers can b …
READ MOREThis is the fourth (and, perhaps, final) post on Ken Rogoff’s The Curse of Cash. As summarized in an earlier post, Rogoff argues that the benefits of banning cash (e.g., preventing crime, enabling effective monetary policy) exceed the costs (e.g., a re …
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