Thursday, 19 October 2017

Monthly Archives July 2010

Inflation: Watering Down the Punch

Posted by Tom Duncan
July 30, 2010
in Blog

“With the recent financial crisis macroeconomic issues are receiving more and more attention. Inflation is one of those issues. Many claim inflation to be the cause of the crisis; which has even given the Austrian business cycle theory attention from the media. The theory states that an increase in the money supply causes a false […]

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A Conversation with Milton Friedman – Liberty Fund

Posted by Tom Duncan
July 30, 2010
in Blog

“Milton Friedman discusses his economic ideas with Gary S. Becker. Recipient of the 1976 Nobel Memorial Prize in Economics, Milton Friedman has long been recognized as one of our most important economic thinkers, and a leader of the Chicago school of monetary economics. A senior research fellow at the Hoover Institution since 1977, he is […]

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Norman Macrae, Sound Money and the IEA

Posted by Alex Chafuen
July 29, 2010
in Blog

“For me, the most convincing has been the most radical number
70, by the Nobel Prize -winner Professor F. A. Hayek, which
advocated the Denationalization of Money”

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Inflation: The view from Canada

Posted by Alex Chafuen
July 29, 2010
in Blog

Congratulations to the Molinari Institute in France for paying attention to sound money and posting Inflation, the Underrated Destroyer of Prosperity a speech by Maxime Bernier, MP for Beauce (Canada), before the Economic Club of Toronto on June 8, 2010

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“Should the Fed Pump Even More”

Posted by Tom Duncan
July 29, 2010
in Blog

“The only way fiscal and monetary stimulus could “work” is if the flow of real savings (i.e., real funding) is large enough to support (i.e., fund) government activities and activities that sprang up on the back of loose-monetary policy while still permitting a positive rate of growth in the activities of real-wealth generators. (Note that […]

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“Alan Blinder and Mark Zandi’s Keynesian Black Box”

Posted by Tom Duncan
July 28, 2010
in Blog

“In a recent Wall Street Journal column, Princeton economist Alan Blinder wonders why 64 percent of Americans do not believe the $849 billion “fiscal stimulus” bill “saved or created” many jobs. “The main reason,” he explains, “appears to be that the White House’s January 2009 forecast was too optimistic — projecting, for example, an unemployment […]

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Age of Inflation

Posted by Tom Duncan
July 28, 2010
in Blog

“Professor Hans F. Sennholz is the outstanding student of Ludwig von Mises whose lifetime work specialized in monetary and financial economics. This book is one of his great legacies to economic science. The title Age of Inflation reflects its subject matter and the date of original publication: 1979, the year of the outbreak of double-digit […]

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The Inflation Crisis and How to Resolve It

Posted by Tom Duncan
July 28, 2010
in Blog

“No subject is so much discussed today – or so little understood – as inflation. The politicians in Washington talk of it as if it were some horrible visitation from without, over which they had no control – like a flood, a foreign invasion, or a plague. It is something they are always promising to […]

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“Inflation and Deficit Spending Revisited”

Posted by Tom Duncan
July 28, 2010
in Blog

“In a recent article in this journal, Giffin, Macomber, and Berry (1981), hereafter referred to as GMB, attempt to test the hypothesis that larger deficits cause increases in the money supply and hence inflation. To test the debt monetization hypothesis, they analyze U.S. data for the period 1959-79. Finding no evidence that debt monetization causes […]

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“Budget Deficits and Inflation”

Posted by Tom Duncan
July 28, 2010
in Blog

“The sharp rise in the rate of inflation in 1973, after two years of diminishing rates, was a great surprise to many. What was the primary cause? Many rea-sons have been advanced to explain this change, some of them logical, and some not. Most of the explanations are based, in one way or another, on […]

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“Bank of England’s Mervyn King Warns Over Inflation”

Posted by Tom Duncan
July 28, 2010
in Blog

“Prices rises have consistently defied the Bank’s expectations of a slowdown, adding to pressure on households as wage growth remains weak and the Government introduces a strict austerity package. The Bank’s rate-setters are charged with keeping inflation at 2% but the Consumer Prices Index benchmark has been above 3% throughout the year. However, addressing a […]

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“Money Dominates”

Posted by Tom Duncan
July 27, 2010
in Blog

“Financial panics are usually followed by sharp economic snap backs. The post-Panic of 2008 has failed to follow this typical “V-shaped” economic recovery pattern. After almost two years, the U.S. economy remains mired in an anemic recovery, with a current 2.4% year-over-year rate of growth. This paltry growth rate doesn’t even reach the U.S.’s long-term […]

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“Fannie, Freddie Remain Unfixed”

Posted by Tom Duncan
July 26, 2010
in Blog

“With much fanfare, President Obama has signed the Dodd-Frank financial reform bill, promising the most sweeping reform since the Great Depression. This massive bill extends regulation to many parts of the U.S. economy, and adds new open-ended bureaucracies that expand the powers of government over a wide variety of financial firms. Does the bill really […]

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“New Financial Rulebook Tangles Loan Bundlers, Rating Agencies”

Posted by Tom Duncan
July 23, 2010
in Blog

“A minor rule change in the law unexpectedly shut down the market for selling new bundles of car loans and consumer loans after bond issuers, ratings agencies and the Securities and Exchange Commission found themselves caught in a tangle of old and new regulations. The SEC intervened Thursday afternoon, but traders viewed the incident as […]

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“Experts fear financial reform law will restrict credit to businesses”

Posted by Tom Duncan
July 23, 2010
in Blog

“The landmark Dodd-Frank Wall Street Reform and Consumer Protection Act is meant to bring new stability to the financial system, but there’s not a lot of love for the legislation among local banks, financial experts and business leaders, who say the law will reduce access to credit.” Read more.  “Experts fear financial reform law will […]

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“Some Unpleasant Monetarist Arithmetic”

Posted by Tom Duncan
July 22, 2010
in Blog

“In his presidential address to the American Economic Association (AEA), Milton Friedman (1968) warned not to expect too much from monetary policy. In particular, Friedman argued that monetary policy could not permanently influence the levels of real output, unemployment, or real rates of return on securities. However, Friedman did assert that a monetary authority could […]

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Summer Reading III

July 22, 2010
in Blog

According to Reinhart and Rogoff, “for the advanced economies during 1800-2008, the picture that emerges is one of serial banking crises.” In This Time is Different, the authors bring us up to the present by examining the history of banking crises. Banking crises are not only frequent , but often accompanied by other kind of […]

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The Great Reflation

Posted by Tom Duncan
July 21, 2010
in Blog

“The financial crisis, the speculative bubble leading up to it, and the aftermath have proven once again just how true the old saying is that if you want to know what’s going on in the financial system, watch the banks. The banking system has always been the centerpiece of liquidity flows, and financial markets are […]

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The Experience of Free Banking

Posted by Tom Duncan
July 21, 2010
in Blog

“There was controversy over how much power the central bank should have and what it should try to do, but no respectable economist suggested that central banking itself was unnecessary or harmful until Hayek finally despaired of it in 1976 and began to argue that the only way to achieve monetary stability was to denationalize […]

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“Illinois Free Banking Experience”

Posted by Tom Duncan
July 21, 2010
in Blog

“Recent studies by Rolnick and Weber (1983, 1984) have presented evidence challenging the conventional view of the Free Banking Era (1837-1863). The conventional view depicts a period of financial chaos in which lenient regulations gave rise to a plethora of banks, bank notes and coun-terfeit bank notes, unscrupulous “wildcat” bankers, and large noteholder losses. Rolnick […]

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“New Evidence on the Free Banking Era”

Posted by Tom Duncan
July 21, 2010
in Blog

“The United States has experienced many periods of major banking panics during which a large number of banks have failed and financial markets have been in considerable disarray. The period consid-ered by many as the worst is the one period when banks were more or less left alone to pursue their own profit-motivated interests, the […]

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“Free Banking and Information Asymmetry”

Posted by Tom Duncan
July 21, 2010
in Blog

“A traditional argument against free banking is that it will collapse because of information externalities: it is impossible for depositors to tell whether a high deposit rate offered by a bank is due to its high efficiency or risky lending strategy. This paper shows that in a separating equilibrium a higher-quality bank offers a lower […]

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“Free Banking and Monetary Control”

Posted by Tom Duncan
July 21, 2010
in Blog

“Were free banking to reemerge today, it would probably be based, not on a gold standard, but on irredeemable paper (‘fiat’) base money issued by a former or extant central bank. Under this form of free banking, the price level is no longer given, and conventional monetary policy questions remain relevant. In particular, would free […]

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“Fed’s Duke:Time For Review Of Community Reinvestment Act”

Posted by Tom Duncan
July 20, 2010
in Blog

“Federal Reserve Governor Elizabeth Duke called Monday for a thorough review and update of a federal law that limits discriminatory credit practices in low-income neighborhoods. “Today’s financial landscape is vastly different from the one in which the Community Reinvestment Act was enacted in 1977,” Duke said. “In the wave of the foreclosure crisis, there are […]

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“The Gold Standard: A Principled Case”

Posted by Tom Duncan
July 20, 2010
in Blog

“In recent months, we have witnessed fierce arguments between, on the one side, those who defend the current system of “fiat money,” in which, as John Maynard Keynes stated, money “is created and issued by the State, but is not convertible by law into anything other than itself, and has no fixed value in terms […]

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Summer Reading II

July 19, 2010
in Blog

Summer reading is eclectic and before getting to my second installment of notes on This Time is Different, I want to recommend a non-economics book. A Chance in Hell by Jim Michaels is a riveting account of how the military and political situation turned in Anbar province in Western Iraq. It is first and foremost […]

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“Fed Nominees Support Expanded Duties”

Posted by Tom Duncan
July 16, 2010
in Blog

“Hours before the Senate approved a far-reaching overhaul of Wall Street regulations on Thursday, President Obama’s three nominees to the board of the Federal Reserve said they were prepared to help the central bank handle its vastly expanded duties to ensure financial stability and oversee financial institutions, The New York Times’s Sewell Chan reported. “We […]

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“The Uncertainty Principle”

Posted by Tom Duncan
July 15, 2010
in Blog

“So Republicans Scott Brown, Olympia Snowe and Susan Collins now say they’ll provide the last crucial votes to get the Dodd-Frank financial reform through the Senate. Hmmm. Could this be Minority Leader Mitch McConnell’s secret plan to take back the Senate, guaranteeing another year or two of regulatory and lending uncertainty and thus slower economic […]

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“Economic Recovery Slower Than Expected”

Posted by Tom Duncan
July 14, 2010
in Blog

“Federal Reserve leaders marked down their expectations for growth and inflation last month, concluding that the economic recovery is proceeding more slowly than they had thought in the spring but that the slowdown did not warrant new policy actions. But Fed leaders did agree to explore options for supporting the economy further in case conditions […]

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“Finance Overhaul Casts Long Shadow on the Plains”

Posted by Tom Duncan
July 14, 2010
in Blog

“Farmer Jim Kreutz uses derivatives to soften the blow should the price of feed corn drop before harvest. His brother-in-law, feedlot owner Jon Reeson, turns to them to hedge the price of his steer. The local farmers’ co-op uses derivatives to finance fixed-price diesel for truckers who carry cattle to slaughter. And the packing plant […]

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Money and Banking: The American Experience

Posted by Tom Duncan
July 14, 2010
in Blog

The style of Money and Banking: The American Experience is one of article and comment. An author provides an article on the issues of money and banking in the U.S. and another academic provides a comment on said article. The table of contents is as follows: Introduction by Clifford F. Thies “Money and Banking: The […]

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Gold Wars

Posted by Tom Duncan
July 14, 2010
in Blog

“This book is much more than a chronicle of gold wars. It is also an account of the historical failure of ‘Esperanto money.’ Over a hundred years ago, a Polish physician by the name of Ludovik Lazarus Zamenhof (1859-1917) created a synthetic language in the hope of removing the curse of Babel from mankind. According […]

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Getting Off Track

Posted by Tom Duncan
July 14, 2010
in Blog

“Throughout history, financial crises have always been caused by excesses—frequently monetary excesses—which lead to a boom and an inevitable bust. In our current crisis it was a housing boom and bust that in turn led to financial turmoil in the United States and other countries. How did everything deteriorate so suddenly and dramatically? In Getting […]

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“A Free-Market Monetary System”

Posted by Tom Duncan
July 14, 2010
in Blog

“When a little over two years ago, at the second Lausanne Conference of this group, I threw out, almost as a sort of bitter joke, that there was no hope of ever again having decent money, unless we took from government the monopoly of issuing money and handed it over to private industry, I took […]

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“Pound Rises After Data Show Higher-Than-Expected Inflation”

Posted by Tom Duncan
July 13, 2010
in Blog

“The pound rose against the dollar, snapping a three-day drop, as reports showed inflation above economists’ forecasts and higher retail sales, stoking speculation that the Bank of England may raise interest rates. “Although inflation is supposed to be coming down, it’s not falling as expected,” said George Tchetvertakov, head of market research at Alpari Ltd., […]

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“See You Next Tyranny Day”

Posted by Tom Duncan
July 12, 2010
in Blog

“According to New York Times columnist Thomas L. Friedman in his mega-best-selling book Hot, Flat, and Crowded, China banned plastic bags a few years ago. “Bam! Just like that–1.3 billion people, theoretically, will stop using thin plastic bags,” he gushed. “Millions of barrels of petroleum will be saved, and mountains of garbage avoided.” China’s got […]

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“Your Money Back”

Posted by Tom Duncan
July 12, 2010
in Blog

“Is Ron Paul’s suggestion that the Federal Reserve be eliminated a “fringe position,” as Josh Barro suggested in the June 21 issue of National Review (“Mend the Fed”)? It depends on what “fringe” means. If it means simply that a large majority disagrees, then Representative Paul’s position deserves that characterization. But if “fringe” is meant […]

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The Perils of Monetary Management

July 9, 2010
in Blog

Recently the Chinese authorities announced an end to the dollar peg and a move towards a more flexible exchange rate, as commented upon in a previous post. However, there are fears among Chinese officials that this could lead to a wide range of problems, including speculation and hot money inflows, as well as undermining the […]

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“Honest Money through bearer shares, a proposal”

Posted by Tom Duncan
July 9, 2010
in Blog

“Nobody understands money, least of all economists. Too sweeping a statement? Perhaps. But every analysis of the workings of monetary systems that I have ever read has been seriously in error at one or more crucial points. This is true not only of the supposedly impartial opuses of academic economics, but also of the writings […]

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“An Old Battlefront Returns in War on Euro”

Posted by Tom Duncan
July 8, 2010
in Blog

“In 1998, four renegade German professors tried to stop the introduction of the euro with a legal challenge in Germany’s highest court. Now, 12 years later, they are fighting against a German bailout for Greece — and this time around, people are listening to them. Wilhelm Hankel is sitting on the stage at a meeting […]

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Sound Money and a Secure Free Society

Posted by Alex Chafuen
July 7, 2010
in Blog

Re-reading the text book that we used at Grove City College to learn about the principles of sound money, I see that another project at Atlas, our Secure Free Society Project, complements with our Sound Money Project. In Theory of Money and Credit, which Lionel Robbins regarded as the best book ever written on money, […]

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Hayek on the need to win the ideas war to bring sound money back

Posted by Alex Chafuen
July 7, 2010
in Blog

In the preface to one of his books, Hayek wrote that “Indeed I must admit that–although I am a convinced believer in the international gold standard–I regard the prospects of its restoration in the near future not without some concern. Nothing would be more fatal from a long run point of view than if the […]

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Debt to GDP: Who Really Carries the Burden?

July 7, 2010
in Blog

Over recent months, much has been made of the rapid increase in public debt levels. Protests against excess government spending in the U.S. and severe economic problems in debt-laden European countries have forced the federal debt to the forefront of national issues. There are, of course, those who attempt to justify the massive debt—if we […]

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“Haste Makes Waste in Financial Regulatory Bill”

Posted by Tom Duncan
July 7, 2010
in Blog

“The Congressional Conference Committee worked all night on Friday, June 25, finally quitting at 5:37 in the morning, so that President Obama could go to the G-20 Summit in Canada saying that Congress had finished a bill. Throughout the night comments were penciled in on the 2,315-page bill, so many in fact that the committee […]

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Highlighting Hayek

Posted by Candice Malcolm
July 7, 2010
in Blog

Is the world finally looking to the ideas of Friedrich Hayek? It appears that the intellectual debate may be heading in a new direction. Stimulus spending has done practically nothing to reduce unemployment or spur growth; instead it has merely inflated the deficit and enraged taxpayers. Instead of falling into a vicious cycle of government […]

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“Britain’s Inflation Pain Poses Risk for Recovery”

Posted by Tom Duncan
July 7, 2010
in Blog

“Committee members at the Bank of England and some economists have been puzzled by persistently high inflation in Britain, causing some concerns that the country’s recovery might stagnate. Unlike in the United States and in countries that share the euro, inflation in Britain never came close to zero in 2009. And while core inflation, which […]

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Keynes vs. Hayek: The Great Debate Continues

July 7, 2010
in Blog

The debates raging over what policies will pull the U.S. economy out of its Great Recession replicate one that occurred during the Great Depression. Thanks to the efforts of Richard Ebeling, a professor of economics at Northwood University, we have compelling and concise documentary evidence. He has unearthed letters to the Times of London from […]

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“Liquidity Trap or Malinvested Resources?”

Posted by Tom Duncan
July 7, 2010
in Blog

“Many people claim today that the U.S. economy is in a “liquidity trap” and only government can spend us out of this mess. Commentators from Paul Krugman to Martin Wolf of the Financial Times assert we are in a “Keynesian situation”; unless government spending rescues us, we are doomed to suffer decades of economic stagnation. […]

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The Age of Turbulence

Posted by Tom Duncan
July 7, 2010
in Blog

“Alan Greenspan shares the story of his life first simply with an eye toward doing justice to the extraordinary amount of history he has experienced and shaped. But his other goal is to draw readers along the same learning curve he followed, so they accrue a grasp of his own understanding of the underlying dynamics […]

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The U.S. Debt Burden

July 6, 2010
in Blog

In the aftermath of the financial crisis, the U.S. public debt-to-GDP ratio has been receiving special attention. A recent report from the Treasury to Congress said that the ratio of total government debt to nominal GPD will rise from 93 percent this year to 102 percent by 2015. The report also concludes that the net […]

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