Tuesday, 23 May 2017
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    The Regression Theorem: Summary

    May 19, 2017
    In the late 1800s, three economists working independently radically transformed the way we think about value. Classical economists had struggled to explain why water is typically much cheaper than diamonds, despite being more useful on the whole and, indeed, crucial to one’s survival. Then, William Stanley Jevons, Carl Menger, and Léon Walras offered an elegant […]

    Two Tales of Unintended Consequences of Monetary Policy – Tale 1

    May 17, 2017
    Even 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 our complex economy. The Federal Reserve and European Central Bank’s monetary policy responses to […]

    Is Money Really a Veil?

    May 11, 2017
    My 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 in the medium of exchange, which also makes the medium of exchange […]

    Escape from the Central Bank Trap

    May 10, 2017
    Cheap 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 time, these policies put us at an even greater risk. The monster bubble […]

    The Rule of Law vs the Rule of Experts

    May 8, 2017
    Our 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 policy is not free from this “worldview” effect. There is a big debate […]

    Reserve Holdings and the Size of the Fed’s Balance Sheet

    May 8, 2017
    In a recent post at FT, Sam Flemming documents growing concerns among some former Fed officials that the Fed “risks political interference and losing its independence if it maintains a large balance sheet in the longer term.” I’ve discussed the increase in the size and composition of the Fed’s balance sheet before.  More recently, George […]

    What the Gold Standard Is and Why Government Killed It

    April 19, 2017
    This 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. Below, I will discuss (1) what the gold standard is, (2) what is not, and (3) why […]

    Here’s Where All That Chinese Money Came From

    April 12, 2017
    This piece originally appeared in Forbes Have you read about tens of billions of U.S. dollars — sometimes over $100 billion — “flowing out of China” every month? Makes one wonder where, how and when China got the plates, paper and special ink to start printing American currency. Of course, it is all electronic money, […]