Monday, 11 December 2017

Monthly Archives June 2010

“Chicago Fed’s Evans ‘wary’ of more asset purchases”

Posted by Tom Duncan
June 30, 2010
in Blog

“”There are limits to what policy can do,” especially to improve the nation’s labor market, Evans said in a television interview on CNBC. Interest rates are near zero as the Federal Reserve’s stuck with an accommodative monetary policy, and it’s already purchased $1.75 trillion of housing-related assets to keep long-term market interest rates low.” Read […]

Read More

“Freshman GOP senator finds pivotal role on financial regulation”

Posted by Tom Duncan
June 30, 2010
in Blog

“With the House of Representatives poised to vote on the latest version of financial regulation perhaps as soon as late Wednesday afternoon, the political spotlight has turned to a Republican senator who has been in office for less than five months and who forced what the Obama administration had hoped would be an immediate major […]

Read More

“Worst Still Ahead for Economic and Systemic-Solvency Crises”

Posted by Tom Duncan
June 30, 2010
in Blog

“The U.S. economy continues in its longest and deepest downturn since the early 1930s, the first downleg of the Great Depression. This structural contraction already shows characteristics of a depression. Particularly protracted and deep, it will remain unresponsive to traditional economic stimuli. Given the historical and current extreme fiscal malfeasance of the U.S. government, and […]

Read More

Money: Its Origins, Development, Debasement and Prospects

Posted by Tom Duncan
June 30, 2010
in Blog

“This book tells how money has conferred power and profits to those in positions to monopolize its production, abuse their power, and ultimately destroy the value of the nation’s economy. It tells why government has not and will not — because it can not — preserve the value of your money. It tells how we […]

Read More

“The Use of Knowledge in Society”

Posted by Tom Duncan
June 30, 2010
in Blog

“The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The […]

Read More

The United States: Deficit Champion

Posted by Tom Duncan
June 30, 2010
in Blog

“Evidence that the current Administration is taking a different tack on economic policy was abundant at the recent Group of 20 (G-20) meetings in Toronto. The European governments, led by Germany, were arguing for deficit and debt reduction while the U.S. was resisting attempts to rein in spending. Although the U.S. went along with the […]

Read More

I, Pencil

Posted by Tom Duncan
June 30, 2010
in Blog

“I, Pencil, simple though I appear to be, merit your wonder and awe, a claim I shall attempt to prove. In fact, if you can understand me—no, that’s too much to ask of anyone—if you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing. […]

Read More

“A Fiscal Theory of Government’s Role in Money”

Posted by Tom Duncan
June 30, 2010
in Blog

“As an alternative to market failure explanations, we draw on theory and historical evidence to argue that fiscal considerations explain the roles governments typically play in producing and regulating money. Public monopoly production of coins and banknotes, substitution of fiat for commodity standards, and restrictions on substitutes for government money all generate revenue and especially […]

Read More

“Why Obamanomics Has Failed”

Posted by Tom Duncan
June 30, 2010
in Blog

“The administration’s stimulus program has failed. Growth is slow and unemployment remains high. The president, his friends and advisers talk endlessly about the circumstances they inherited as a way of avoiding responsibility for the 18 months for which they are responsible. But they want new stimulus measures—which is convincing evidence that they too recognize that […]

Read More

“The Financial Crisis: A Timeline of Events and Policy Actions”

Posted by Tom Duncan
June 29, 2010
in Blog

“February 2007 February 27, 2007 | Freddie Mac Press Release The Federal Home Loan Mortgage Corporation (Freddie Mac) announces that it will no longer buy the most risky subprime mortgages and mortgage-related securities. April 2007 April 2, 2007 | SEC Filing New Century Financial Corporation, a leading subprime mortgage lender, files for Chapter 11 bankruptcy […]

Read More

“Text of Dodd-Frank Wall Street Reform and Consumer Protection Act”

Posted by Tom Duncan
June 28, 2010
in Blog

“A summary of the Dodd-Frank Wall Street Reform and Consumer Protection Act, released Saturday by the House Financial Services Committee. The legislation is expected to come before Congress next week for a final vote. 1. Dodd-Frank Wall Street Reform and Consumer Protection Act Create a Sound Economic Foundation to Grow Jobs, Protect Consumers, Rein in […]

Read More

“Assessing Winners and Losers in Final Reform Bill”

Posted by Tom Duncan
June 25, 2010
in Blog

“Those looking for clear winners and losers after the conference committee struck a historic final agreement early Friday on regulatory reform legislation are bound to be frustrated. For every agency or industry participant that appeared to gain in the bill, there was a significant downside, while those who arguably emerged bruised and battered after the […]

Read More

Reflections on Money

Posted by Tom Duncan
June 25, 2010
in Blog

On Thursday, June 17, I attended a lecture by Dr. Benjamin Powell of Suffolk University. He spoke at the Charles G. Koch Foundation, giving one of his excellent lectures on Somalia and its Stateless society. While the lecture itself is well worth hearing, one of the most fundamental statements made came almost as an aside. […]

Read More

The Stimflation Contest – $10,000

Posted by Tom Duncan
June 24, 2010
in Blog

Our friends at Let Freedom Ring are hosting “The Stimflation Contest”. Contestants have a chance to win $10,000 for giving their best estimate on the next four years of inflation. For more details or to participate, click here.

Read More

Sound Money Insights from Fed President

June 24, 2010
in Blog

Kansas City Fed President Thomas Hoenig is a lone dissenter at the Federal Open Market Committee (FOMC)–the central bank’s main policymaking body. At the June FOMC meeting, for the fourth time in a row, he dissented to the Fed’s statement that economic conditions “are likely to warrant exceptionally low levels of the federal funds rate […]

Read More

“The Fed’s Exit Strategy for Monetary Policy”

Posted by Tom Duncan
June 24, 2010
in Blog

“To many observers, the Federal Reserve’s extraordinary policy actions during the recent crisis averted a financial Armageddon and curtailed the depth and duration of the recession (Rudebusch 2009). To combat panic and dislocation in financial markets, the Fed provided an enormous amount of liquidity. To mitigate declines in spending and employment, it reduced the federal […]

Read More

“Fed Is Likely to Remain on Sidelines”

Posted by Tom Duncan
June 23, 2010
in Blog

“The Federal Reserve is widely expected to leave rates unchanged at its policy-setting meeting today, but low inflation and continued uncertainty about the recovery has economists pushing their forecasts for the eventual rate increase even further into the future. In a midmonth addendum to the Wall Street Journal’s economic forecasting survey conducted this week, 15 […]

Read More

“Volcker Rule Attacked as Lawmakers Seek Fund Loophole”

Posted by Tom Duncan
June 23, 2010
in Blog

“Senate negotiators will probably offer changes today to the financial overhaul bill to soften the Volcker rule by allowing banks to sponsor hedge funds and invest their own money, within limits, alongside that of clients. The compromise, designed to win the support of at least three Republican senators, comes as lawmakers struggle to reach agreement […]

Read More

“Death and Taxes, Including Inflation: the Public versus Economists”

Posted by Tom Duncan
June 23, 2010
in Blog

“Inflation worries the general public much more than it does the economics profession, and economists remain perplexed as to exactly why. The costs that concern economists are inflation’s deadweight loss. But that is only a part of the losses that concern the public, because inflation simultaneously transfers some of people’s income into the hands of […]

Read More

“U.S. Stocks Flit Between Gains and Losses Ahead of Fed”

Posted by Tom Duncan
June 23, 2010
in Blog

“Stocks wavered early Wednesday as investors awaited word from the Federal Reserve on its latest interest-rate decision and the outlook for the U.S. economy. The Dow Jones Industrial Average, which entered Wednesday’s trading on a two-day losing streak, posted a small gain just after the open but recently retreated to trade 11 points lower at […]

Read More

“Q&A With Judy Shelton”

Posted by Tom Duncan
June 23, 2010
in Blog

“Judy Shelton is an economist who has written 15 pieces for the Wall Street Journal over the past two years. She is the author of several books including Money Meltdown in 1994 and The Coming Soviet Crash in 1989. In addition, she is on the board of the National Endowment for Democracy, which makes grants […]

Read More

“The Role of Monetary Policy”

Posted by Tom Duncan
June 23, 2010
in Blog

“There is wide agreement about the major goals of economic policy: high employment, stable prices, and rapid growth. There is less agree-ment that these goals are mutually compatible or, among those who re-gard them as incompatible, about the terms at which they can and should be substituted for one another. There is least agreement about […]

Read More

The Housing Boom and Bust

Posted by Tom Duncan
June 23, 2010
in Blog

“Now, in The Housing Boom and Bust (Basic Books), Sowell contemplates the greatest expansion of government power in a generation, which was itself occasioned by the greatest economic crisis in as long. A quick but thorough guide to the causes of the crises, Sowell’s book shows how government policies led to a huge increase in […]

Read More

“Fed Watch: Europe Debt Crisis May Lead to More Cautious FOMC”

Posted by Tom Duncan
June 22, 2010
in Blog

“Federal Reserve officials could express more caution about the U.S. economy’s recovery after their meeting this week, giving them additional reason to keep short-term interest rates close to zero for a while. The three meetings of the Fed’s policy-setting body so far this year have all ended with the U.S. central bank giving a gradually […]

Read More

Chinese Currency Reform

June 21, 2010
in Blog

The Chinese government announced this weekend that they would move towards a greater degree of flexibility in the exchange rate. As stated by by the People’s Bank of China: “In view of the recent economic situation and financial market developments at home and abroad, and the balance of payments (BOP) situation in China, the People’s […]

Read More

“Motionless Fed Likely to Provide No Cheer”

Posted by Tom Duncan
June 21, 2010
in Blog

“No news isn’t always good news. When Federal Reserve officials meet this week, almost two months will have passed since their last policy-setting conclave, the longest such stretch of the year. And it has been a pretty woeful period for financial markets. Since the Fed’s last meeting ended April 28, market volatility has surged, the […]

Read More

Greenspan Warns of Fiscal Profligacy

June 18, 2010
in Blog

In a Wall Street Journal op-ed, former Fed Chairman Alan Greenspan warns of U.S. fiscal profligacy, in part fuelled by the current low borrowing costs of the government: “Despite the surge in federal debt to the public during the past 18 months—to $8.6 trillion from $5.5 trillion—inflation and long-term interest rates, the typical symptoms of […]

Read More

Greek Government Junk Bonds

June 18, 2010
in Blog

The Greek crisis rolls on.  This week yields on Greek government bonds rose by almost 3/4 of a percentage point to 9.06 percent as Moody’s–a rating agency–downgraded its debt to junk bond status citing “substantial” risks in connection with the three-year Greek  program for economic reform. Furthermore, being downgraded to junk bond status also means […]

Read More

“China May Have Dug a Financial Hole”

Posted by Tom Duncan
June 18, 2010
in Blog

“In late 2008, with the financial crisis rippling through the global economy, China’s leaders embarked on a two-year, $586 billion spending program to try to stave off a recession and keep the Chinese economy growing. Unlike in the United States — where President Obama’s large stimulus plan became the subject of protracted congressional wrangling and […]

Read More

A Spanish Banking Crisis in the Making

June 17, 2010
in Blog

Spain was hit hard by the financial crisis. Like the U.S. and the UK, Spain experienced high capital inflows and rapidly rising housing prices in the years leading up to the crisis. And like the U.S. and the UK it is now stuck with a struggling banking sector and bloated public finances. Spanish banks have […]

Read More

“The Folly of Currency Pegs”

Posted by Tom Duncan
June 17, 2010
in Blog

“The current flap over the sustainability of Greece’s membership in the European Economic and Monetary Union (EMU) is reminiscent, in many ways, of the events leading up to the collapse of the Bretton Woods system—another ultimately untenable currency regime—which was put into place after World War II and terminated by the break of the dollar’s […]

Read More

European Weakness Is Fuelling U.S. Profligacy

June 16, 2010
in Blog

The European debt crisis has demonstrated the painful costs of fiscal profligacy and short-sighted Keynesian stimulus. In the words of financial historian Niall Ferguson, “there is no such thing as a Keynesian free lunch,” warning that a “greek crisis” could come to America. Washington Post columnist Robert J. Samuelson says the European crisis should be […]

Read More

“Monetarism Defiant” – Anna Schwartz on the Fed

Posted by Tom Duncan
June 16, 2010
in Blog

“Anna Schwartz must be the oldest active revolutionary on earth. Born in 1915 in New York, she can still be found nearly every day at her office in the National Bureau of Economic Research on Fifth Avenue, where she has been tirelessly gathering data since 1941. And as her experience proves, data can transform the […]

Read More

“The Great Depression According to Milton Friedman”

Posted by Tom Duncan
June 16, 2010
in Blog

“Few events in U.S. history can rival the Great Depression for its impact. The period from 1929 to 1941 saw fundamental changes in the landscape of American politics and economics, including such monumental events as America ’s going off the gold standard and the founding of Social Security. It was a watershed for the growth […]

Read More

“A Stable Price Level Standard for Federal Reserve Monetary Policy”

Posted by Tom Duncan
June 16, 2010
in Blog

“In a recent article in the Cato Journal dealing with the transparency of Federal Reserve monetary policy, Federal Open Market Committee (FOMC) Chairman Ben Bernanke provided an authoritative account of current Federal Reserve strategy (Cato Journal, vol. 28, No. 2, Spring/Summer, 2008, “The Fed’s Road Toward Greater Transparency,” pp. 175-186). Bernanke notes that “inflation-targeting” does […]

Read More

Chile Starts Monetary Tightening

June 15, 2010
in Blog

Chile has rebounded strongly from the global recession, in spite of the devastating earth quake that hit early in 2010. In response to the financial crisis, the monetary authorities cut its key lending rate from 8.25 per cent in September 2008 all the way down to 0.5 percent in July 2009 where it has stayed […]

Read More

“Fed limits card fees to $25”

Posted by Tom Duncan
June 15, 2010
in Blog

“Most credit card penalties will be limited to $25 and fees for customers who don’t use their cards will be eliminated under rules released Tuesday by the Federal Reserve. The Fed also ordered a review of all credit card interest rate hikes imposed since January 2009, including most of the record increases that came in […]

Read More

The Gulf Spill, the Financial Crisis and Government Failure

June 14, 2010
in Blog

The Gulf oil spill and the global financial crisis both demonstrate the failings of big government. Partisan politics obscures the linkage, with the consequence that each political party repeats the mistakes of the other as its turn to govern arrives. First, consider the oil spill. BP and its contractors are surely responsible for the accident. […]

Read More

Hans F. Sennholz and his sound money legacy

Posted by Alex Chafuen
June 14, 2010
in Blog

I first met Hans Sennholz in Argentina. It was 1976 or 1977 (I told part of the story on http://www.lewrockwell.com/orig4/chafuen1.html). For our classes in Monetary Economics at our beloved Grove City College, he gave us “The Theory of Money and Credit” by Mises. During my first years at the college (1978-1979) inflation was a major […]

Read More

“Politicizing the Fed”

Posted by Tom Duncan
June 14, 2010
in Blog

“For 97 years the 12 regional banks of the Federal Reserve system have operated relatively free of political interference from Washington. The looming financial reform bill threatens that independence, not least through an effort to impose new presidential appointees at the regional banks. The biggest underreported threat comes from Subtitle I, Section 1801 of the […]

Read More

“AIG Bailout ‘Poisonous’ to Wall Street”

Posted by Tom Duncan
June 11, 2010
in Blog

“A Congressional watchdog sank its teeth into the Federal Reserve for its 2008 bailout of insurance crook AIG, calling the billion-dollar magic pill “poisonous.” The panel also criticized the Fed for not acting earlier, or tougher, with AIG for its credit-default swaps, sending a signal to the rest of the Wall Street giants that risky […]

Read More

“Congress Begins Conference on Financial Regulation”

Posted by Tom Duncan
June 11, 2010
in Blog

“Today begins the televised political theatre that Barney Frank has been waiting months for: the first public meeting of the House and Senate conferees on the two financial regulation bills. While there are a handful of important differences between the House and Senate bills, these differences are overshadowed by what the bills have in common. […]

Read More

Controlling the Fed

Posted by Tom Duncan
June 11, 2010
in Blog

Blame goes to the Fed. They allowed a financial crisis due to lack of regulation and oversight of the banking/financial industry. At least that is the claim of today’s policy makers. While I may not disagree that the Fed holds much of the responsibility for the mess of the last few years, but I do […]

Read More

“Fed’s Plosser: Sustainable Economic Recovery Is Now Underway”

Posted by Tom Duncan
June 11, 2010
in Blog

“With a sustainable economic recovery now underway, policy makers will soon have to start thinking about pulling back their monetary stimulus to ensure inflation stays low and inflation expectations remain well-anchored, Philadelphia Federal Reserve President Charles Plosser said Friday. While complete healing from the deepest downturn since the Great Depression will take time, Plosser said […]

Read More

“A Monetary Policy Simulation Game”

Posted by Tom Duncan
June 11, 2010
in Blog

“The author presents a computer game that puts the player in the role of a central bank governor. The game is a stochastic simulation of a standard reduced form macro model, and the user interacts with this simulation by manipulating the interest rate. The problem the player faces is in many ways quite realistic – […]

Read More

“Monetary Policy Rules and Business Cycles”

Posted by Tom Duncan
June 11, 2010
in Blog

“Basic features of business cycle properties under both exogenous and endogenous monetary policy rules are examined in calibrated dynamic stochastic general equilibrium models with nominal rigidities (the nominal wage contract model, the monopolistic competition model with price adjustment costs and a combination of these models). The experiments show that the difference in business cycle features […]

Read More

“Crisis, Conditions and Capital”

Posted by Tom Duncan
June 11, 2010
in Blog

“A selection model for 68 countries between 1970 and 1998 is used to test the impact of International Monetary Fund (IMF) programs on international capital markets and examine how agreements are perceived by multinational investors. Results reveal that even after controlling for factors that lead countries to seek IMF support, IMF agreements lead to lower […]

Read More

“Federal Reserve chief says U.S. budget on road to peril”

Posted by Tom Duncan
June 10, 2010
in Blog

“Federal Reserve Chairman Ben Bernanke warned Wednesday that “the federal budget appears to be on an unsustainable path,” but also recognized that an “exceptional increase” in the deficit had been necessary to ease the pain of recession. In nearly two hours of testimony before the House Budget Committee, Bernanke offered a mix of optimism and […]

Read More

“Bernanke Says Fed to Take Necessary Steps on Growth”

Posted by Tom Duncan
June 9, 2010
in Blog

“Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank will act as needed to aid financial stability and economic growth after restarting emergency currency-swaps to help contain Europe’s debt crisis. ‘Our ongoing international cooperation sends an important signal to global financial markets that we will take the actions necessary to ensure stability and […]

Read More

De Soto’s explanation of the crisis and paper money

Posted by Alex Chafuen
June 8, 2010
in Blog

I was lucky to listen to the detailed explanation made by Hernando de Soto about how the lack of transparency of some derivatives, with no one knowing what “real” property they represent led to the crisis and might lead to a bigger crisis or stagnation in the future. I told him that most of his […]

Read More