Saturday, 18 November 2017

Monthly Archives November 2010

“The Return of Stagflation”

Posted by Tom Duncan
November 30, 2010
in Blog

“We are entering an era of high inflation, to judge by the massive growth of the money supply in the United States, Europe and Asia, and the stubbornness of central bankers who insist that high unemployment demands the creation of even more money. The last time the world went through a similar period was the […]

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“The Dance of the Dollar” – Steve Hanke

Posted by Tom Duncan
November 30, 2010
in Blog

“The dance of the dollar counts — and it counts a lot. With few exceptions, when the dollar weakens against the euro, commodity prices soar, and when the dollar soars against the euro, commodity prices plunge. Every commodity trader knows the importance of the dance of the dollar. Indeed, commodity traders know that, when the […]

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A History of Money and Banking in the US – Murray Rothbard

Posted by Tom Duncan
November 30, 2010
in Blog

“The master teacher of American economic history covers money and banking in the whole of American history, to show that the meltdown of our times is hardly the first. And guess what caused them in the past? Paper money, loose credit, reckless lending standards, government profligacy, and central banking When will we learn? When people […]

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“Public Still Feels Inflation’s Pinch” – WSJ

Posted by Tom Duncan
November 29, 2010
in Blog

“Of course, the inflation any individual faces almost surely differs from the government’s aggregate data. Outside of housing, middle-income consumers have experienced more inflation than other income groups over the past year, in part because they devote a relatively large share of their budget to energy and transportation. For the year ended in October, prices […]

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“Fed’s Move Doesn’t Impress Top CEO’s”

Posted by Tom Duncan
November 29, 2010
in Blog

“The sudden increase in capital investments would create jobs and encourage economic growth, which would then make it possible to weather the interest rate hikes the Fed would inevitably adopt to keep inflation from getting out of hand. That’s the theory, but not many companies are buying it. I talked to a few chief executives […]

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“The Triumphant Return of Hayek” – Newsweek

Posted by Tom Duncan
November 29, 2010
in Blog

“Last year the consensus opinion was that we are all Keynesians now. Virtually everyone in the commentariat believed that John Maynard Keynes’s solution for the Great Depression—heavy government spending to resuscitate the economy—was also the answer to today’s global downturn. The first cracks in the consensus appeared with the outbreak of the fiscal crisis in […]

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“China, Russia quit dollar”

Posted by Tom Duncan
November 26, 2010
in Blog

“China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday. Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to […]

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“Here’s Why the Fed Plan Is Failing: We’re All Austrians Now” – CNBC

Posted by Tom Duncan
November 24, 2010
in Blog

“We may all be Austrians now. Not since the New Deal has Austrian economics enjoyed the political popularity it does now. Austrian economists are awfully popular with the Republican Party, especially its Tea Party wing. Peter Schiff, the Austrian economics-inflected investment advisor, is a very popular guest on business television. Tom Woods’ book “Meltdown”—which provided […]

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The Fed: Defending the Indefensible

Posted by Tom Duncan
November 24, 2010
in Blog

“Although the credibility of the Fed has been questioned for years in some quarters, the first major crack in the wall took place in May, 2009, when Elizabeth Coleman, inspector general of the Federal Reserve, was directly and repeatedly questioned about the Fed’s actions by Rep. Alan Grayson (D-Fla.). Coleman’s inability to articulate any kind […]

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“Bust Cycles and the Fed”

Posted by Tom Duncan
November 24, 2010
in Blog

“In 2003, the Federal Reserve Bank lowered the Fed funds rate down to 1.25%. This was the lowest level that the Fed funds rate had been since 1954. Again, the low interest rate gave birth to the housing and credit boom. This rally or boom cycle lasted just 5 years and as we know lead […]

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“Argentina Seeks IMF Help to Start New Inflation Index”

Posted by Tom Duncan
November 24, 2010
in Blog

“Argentina’s government, in an unexpected shift toward economic pragmatism, said it was seeking technical assistance from the International Monetary Fund to design a new inflation index that could help restore credibility to official statistics. Economists said the IMF statistical input, coupled with Argentina’s recent announcement that it would negotiate with the Paris Club of lender […]

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The Politics of the Irish Financial Crisis

Posted by Tom Duncan
November 24, 2010
in Blog

“The current economic crisis in Ireland has a political dimension. Since 1987 the Irish government has been formed by the Fianna Fail (Soldiers of Destiny) party as has been the case for most of the years since Irish independence. It is a populist party not too concerned about fiscal limits and closely associated with the […]

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“Bernanke’s Raid on the Middle Class” – James Bacon

Posted by Tom Duncan
November 23, 2010
in Blog

“Twenty-four conservative economists and writers have published an open letter calling upon the Federal Reserve to abandon a second round of “quantitative easement” that entails borrowing another $600 billion in U.S. Treasury bonds. “The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting […]

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“Brazil’s Inflation Tops Estimates…”

Posted by Tom Duncan
November 23, 2010
in Blog

“Inflation, as measured by the IPCA-15 price index, quickened to 0.86 percent in the month through mid-November from the same period a month earlier, the fastest pace in 9 months, the national statistic agency said today. Economists forecast a 0.72 percent gain, according to the median estimate in a Bloomberg survey of 33 analysts. Bond […]

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“Fed Adopts Political Tactics on Critics”

Posted by Tom Duncan
November 23, 2010
in Blog

“Faced with unusually sharp ideological attacks after its latest bid to stimulate the economy, the Federal Reserve now faces a challenge far removed from the conduct of monetary policy: how to defend itself in a hyperpartisan environment without becoming overtly political. Caught off guard by accusations from Congressional Republicans, Sarah Palin, Tea Party activists and […]

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“Brazil Economists See Faster Inflation in 2010, 2011”

Posted by Tom Duncan
November 22, 2010
in Blog

“Brazilian economists raised their forecast for inflation this year for the tenth consecutive week, as food costs pressure consumer prices further beyond the government’s target. Consumer prices will rise 5.58 percent this year and 5.15 percent in 2011, up from forecasts of 5.48 percent and 5.05 percent, respectively, according to the median forecast in a […]

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“The Federal Reserve to report this week they are slashing growth projections”

Posted by Tom Duncan
November 22, 2010
in Blog

“The Fed has access to some of the best economists and analysts in the world, yet they still cannot make correct determinations on the state of the economy. In 2008, they continuously said we weren’t in a recession, and there would be no recession. They continuously said we were growing in production when every chart […]

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“Central Bankers Give In, And Discuss the Dollar”

Posted by Tom Duncan
November 22, 2010
in Blog

““It’s hard to make a strong case” the Fed’s bond-buying program can now aid the economy through lowering rates, said Stephen Stanley, chief economist with Pierpont Securities. He said that leaves the Fed relying on the “secondary mechanisms” of monetary policy, most notably the trade benefits of a lower dollar. “They want to see [a […]

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“Bernanke on Perilous Ground for Fed Chairman” – NPR

Posted by Tom Duncan
November 19, 2010
in Blog

“Federal Reserve Chairman Ben Bernanke is taking some highly unusual steps to counter widespread opposition to his $600 billion plan to jump-start the economy. He’s pressing China to let its currency rise and pushing Congress to pass more stimulus aid. Yet as he veers into these political debates, Bernanke may be putting at risk the […]

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“Should the Fed Worry About Unemployment?”

Posted by Tom Duncan
November 19, 2010
in Blog

“One of the things most people don’t realize when they watch the Federal Reserve move the levers of U.S. monetary policy is that its leaders actually wear two hats. The Fed’s marching orders from Congress are to “promote effectively the goals of maximum employment and stable prices.” One of the hottest debates among economists right […]

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“What’s the Bigger Worry: Inflation or Deflation?”

Posted by Tom Duncan
November 19, 2010
in Blog

“If you get $1,000 per month in pension income that is not adjusted each year for inflation, then it will buy you $1000 worth of goods in 25 years assuming no inflation. But, at 2 per cent for 25 years, which is pretty much what we are getting now, the purchasing power of your $1,000 […]

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“Bernanke Makes Case to Senators”

Posted by Tom Duncan
November 18, 2010
in Blog

“Federal Reserve Chairman Ben Bernanke defended the central bank’s plan to buy government bonds during a private gathering with U.S. senators, responding to several days of attacks from Republicans who say the Fed is causing inflation and weakening the dollar. The Fed chairman denied the U.S. was manipulating the currency through its plan to purchase […]

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“Lawmakers seek to change Fed mission”

Posted by Tom Duncan
November 17, 2010
in Blog

“Two influential Republican lawmakers called Tuesday for a fundamental remaking of the Federal Reserve’s mission, arguing that the central bank should stop trying to reduce unemployment and instead focus solely on keeping inflation low. The proposal by Sen. Bob Corker (Tenn.) and Rep. Mike Pence (Ind.) would end the three-decade-old “dual mandate” of the Fed, […]

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“Fresh Attacks on Fed Move”

Posted by Tom Duncan
November 17, 2010
in Blog

“A group of prominent Republican-leaning economists, coordinating with Republican lawmakers and political strategists, is launching a campaign this week calling on Fed Chairman Ben Bernanke to drop his plan to buy $600 billion in additional U.S. Treasury bonds. “The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve […]

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“Fed’s Plosser Says Understanding Crisis May Take 50 Years”

Posted by Tom Duncan
November 17, 2010
in Blog

““It will be at least 50 years before we really understand very well what happened in 2008-2009, and we will be interpreting for another 50 years as to whether the Federal Reserve undertook the right policies or the wrong policies,” Plosser said today during an audience discussion at a Fed conference in Jekyll Island, Georgia. […]

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“Ireland Crises Could Cause EU Collapse”

Posted by Tom Duncan
November 16, 2010
in Blog

“The president of the European Union has warned that the EU could collapse unless the debt crisis that is gripping the region is resolved. Herman Van Rompuy, president of the European Council, raised the stakes ahead of this evening’s showdown talks between finance ministers in Brussels. With Ireland and Portugal both on the brink of […]

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“Mahathir Says Currency Trading ‘Silly’, Advocates Return to Peg”

Posted by Tom Duncan
November 16, 2010
in Blog

“Former Malaysian Prime Minister Mahathir Mohamad, who fought off an attack on the ringgit with capital controls during the Asian financial crisis, said currency trading is “silly” and the world should return to the Bretton Woods System of fixed exchange rates. Currency wars are futile and the U.S. Federal Reserve’s latest quantitative easing plan will […]

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“Greenspan vs. Geithner in ‘weak dollar’ debate”

Posted by Tom Duncan
November 15, 2010
in Blog

“Alan Greenspan, former chairman of the Federal Reserve, and U.S. Treasury Secretary Timothy Geithner locked horns Thursday over whether the Obama administration is supporting a weak dollar to bolster the economy. Greenspan, in an op-ed piece in the Financial Times, claimed that the U.S. government is deliberately weakening the dollar, while Geithner asserted in an […]

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“Mission Impossible: Rescuing the Dollar”

Posted by Tom Duncan
November 12, 2010
in Blog

“In Dubai last week, actor Tom Cruise ran around the outside of the world’s tallest building suspended by a cable 2,700 feet in the air while shooting a scene for his fourth Mission Impossible film. The stunt was Cruise’s “most dangerous yet,”reported London’s Daily Mail. Also last week, the Federal Reserve announced it would create another $600 […]

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“Has the Fed Been a Failure?” – Selgin, Lastrapes and White

Posted by Tom Duncan
November 12, 2010
in Blog

“As the one-hundredth anniversary of the 1913 Federal Reserve Act approaches, we assess whether the nation’s experiment with the Federal Reserve has been a success or a failure. Drawing on a wide range of empirical research, we find the following: 1) The Fed’s full history (1914 to present) has been characterized by more rather than […]

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“Leading Chinese credit rating agency downgrades USA government bonds”

Posted by Tom Duncan
November 12, 2010
in Blog

“One of China’s leading credit rating agencies has downgraded United States of America government debt in response to what it sees as deliberate devaluation of the dollar by quantitative easing and other means. If China, now the second biggest economy in the world, stops buying US government bonds this could have a very negative effect […]

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“Time to Reform the International Monetary System”

Posted by Tom Duncan
November 12, 2010
in Blog

“A funny thing happened on the way to the G-20 meeting in Seoul, South Korea, this week: The world’s growing dissatisfaction with U.S. policy toward the dollar has derailed the Obama administration’s proposal to elevate trade balances as the reference point for currency values. Instead of asserting America’s traditional leadership role, President Barack Obama is […]

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“Back to a Gold Standard?”

Posted by Tom Duncan
November 12, 2010
in Blog

“The gold standard shackled central bankers to a sinking ship. When countries left the gold standard, they began to recover. Countries that were never on the gold standard had very mild recessions during the Great Depression. Why would we ever want to return to such a flawed way of organizing monetary policy? But the current […]

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Getting on Track

Posted by Tom Duncan
November 12, 2010
in Blog

On Wednesday, November 10, Sound Money held a panel at annual Liberty Forum hosted by Atlas. The panel featured Judy Shelton, Sean Fieler and Steven Horwitz, with Matt Kibbe of FreedomWorks acting as moderator. Perhaps it is a bit self-serving to say that it was excellent, but the point still stands. I, personally, had little […]

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A Return to the Gold Standard? – Richard Ebeling

Posted by Tom Duncan
November 11, 2010
in Blog

“Monetary central planning has worked no better than any other form of central planning over the last one hundred years. The world’s central bankers – just like the central planners in the old Soviet Union – just do not have the knowledge, wisdom and ability to successful manage the monetary system of a market economy. […]

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Larry White on the Business Cycle

Posted by Tom Duncan
November 11, 2010
in Blog

Peter Boettke over on Coordination Problem posted an excellent video of Larry White discussing the Austrian theory of the business cycle. Enjoy!

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“Ben Bernanke’s Impossible Dream” – WSJ

Posted by Tom Duncan
November 10, 2010
in Blog

“At Jackson Hole, Mr. Bernanke explained that “if inflation expectations were too low . . . an increase in inflation expectations could become a benefit.” Well, he’s certainly succeeded in raising inflationary expectations. But rising commodity prices and a debased dollar have proved harmful to many businesses because inflated costs mean deflated profit margins. The […]

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“Fed Counts on ‘Psychological Bump’ With Borrowing, but May Just Add to Debt, Inflation”

Posted by Tom Duncan
November 10, 2010
in Blog

“Investors beware: The Federal Reserve may have just agreed to make $600 billion more available for borrowing, but don’t expect to see that money flooding the market any time soon. At least that’s the warning from some financial experts who say the Federal Reserve’s pledge to buy $600 billion in Treasury bonds is unlikely to […]

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“Sovereign Debt Concerns Weigh on Euro”

Posted by Tom Duncan
November 9, 2010
in Blog

“The euro came under pressure as worries over the finances of countries on the edges of the eurozone continued to undermine the single currency. While the cost of insuring against a default in Portuguese, Greek and Spanish government debt has risen sharply, Ireland has become the main focus of investors’ concerns. The cost of protecting […]

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“The Federal Reserve’s latest quantitative easing may lead to disaster”

Posted by Tom Duncan
November 8, 2010
in Blog

“The Fed could have sat tight to see whether the slowdown in growth in the second and third quarters of 2010 was temporary. Most of the economic news since the idea of more QE was first floated in August has been better than expected, if not exactly earth-shattering. Friday’s employment figures continued that trend. The […]

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Democracy in Deficit

Posted by Tom Duncan
November 8, 2010
in Blog

“Vol. 8 of The Collected Works. Democracy in Deficit is one of the early comprehensive attempts to apply the basic principles of public-choice analysis to macroeconomic theory and policy. The book serves to bolster Buchanan’s central beliefs in the necessity of a balanced-budget amendment to the U.S. Constitution and in monetary rules rather than central […]

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“Fed’s Hoenig: Fed Needs To Increase Key Rates, Normalize Policy”

Posted by Tom Duncan
November 5, 2010
in Blog

“The Federal Reserve’s vocal dissenter stood his ground against ultraloose monetary policy Friday in a week that the Fed opened the floodgate to loose additional dollars into the system. Federal Reserve Bank of Kansas City President Thomas Hoenig on Friday said the Fed needs to move rates “off of zero” to ensure a more stable […]

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“What the Fed Did and Why” – Bernanke

Posted by Tom Duncan
November 5, 2010
in Blog

“The FOMC decided this week that, with unemployment high and inflation very low, further support to the economy is needed. With short-term interest rates already about as low as they can go, the FOMC agreed to deliver that support by purchasing additional longer-term securities, as it did in 2008 and 2009. The FOMC intends to […]

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“Analysis: Fed’s QE2 Raises Alarm of Commodity Bubble”

Posted by Tom Duncan
November 5, 2010
in Blog

“A commodities buying spree spurred by U.S. quantitative easing has raised alarm of an inflationary bubble reminiscent of 2008 when oil and other industrial raw materials struck all-time highs before the crash. But the Reuters-Jefferies CRB index .CRB, a global commodities benchmark, has since hit a two-year high as part of an 18 percent gain […]

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“China’s Stocks Decline for a Second Day on Inflation Concerns, Valuation”

Posted by Tom Duncan
November 4, 2010
in Blog

“China’s stocks fell for a second day on concern the government may join other Asian nations in taking measures to slow inflation and that valuations for the biggest commodity producers were excessive after last month’s rally. Jiangxi Copper Co. and Datong Coal Industry Co. lost at least 5 percent on speculation U.S. economic measures may […]

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“Fed to Buy $600 Billion of Treasurys”

Posted by Tom Duncan
November 3, 2010
in Blog

“The Federal Reserve Wednesday unveiled a controversial new plan to buy U.S. Treasurys, hoping to spur growth in a disappointingly slow U.S. economy. After two days of discussions, Fed officials decided to go ahead with a much anticipated program, saying they will buy $600 billion of U.S. government debt over the next eight months. The […]

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“Central Banks in Rate Clash” – WSJ

Posted by Tom Duncan
November 3, 2010
in Blog

“The Federal Reserve’s expected move is a controversial step at home and abroad. One Fed calculation shows that every $500 billion of bond purchases has the same stimulative effect as about a half-percentage-point cut in short-term interest rates. But Fed officials are highly uncertain about the outcome, as they don’t have much experience with the […]

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“Made in America, Imported by Asia”

Posted by Tom Duncan
November 3, 2010
in Blog

“Resentment in emerging markets about the global spillover effects of easier U.S. monetary policy is likely to hang over next week’s summit of the Group of 20 leading economies in Seoul. “What will happen with another round of quantitative easing by the Fed? It’s creating inflation, alright. Just not necessarily in the U.S., but on […]

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“The Five Things Money Printing Can’t Do…”

Posted by Tom Duncan
November 3, 2010
in Blog

“It seems this Chairman of the Federal Reserve is of the belief that diluting the dollar is the cure for everything from a recession to male pattern baldness. But money printing can’t accomplish any of things that are necessary to rescue the economy. In fact, the one thing it does bring about (intractable inflation) will […]

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I’ll Side With Mises: Would Friedman’s Logic Lead Us to QE2? – Peter Boettke

Posted by Tom Duncan
November 3, 2010
in Blog

“For some of the reasons that have been supported here by Steve and George, a WSJ editoral argues that Milton Friedman’s monetary policy analysis could be used to defend QE2 in our current economic context. I remain unpersuaded that any of these arguments for QE have the upper-hand either analytically or political economy wise. Part […]

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