Thursday, 19 October 2017

Crisis

Leszek Balcerowicz: The Anti-Bernanke

Posted by Gonzalo Schwarz
December 16, 2012
in Blog

By MATTHEW KAMINSKI As an economic crisis manager, Leszek Balcerowicz has few peers. When communism fell in Europe, he pioneered “shock therapy” to slay hyperinflation and build a free market. In the late 1990s, he jammed a debt ceiling into his country’s constitution, handcuffing future free spenders. When he was central-bank governor from 2001 to 2007, […]

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Job Creation via Jobless Benefits and Fed Money Printing : Signs of a Modern Day Depression

Posted by Gonzalo Schwarz
November 30, 2012
in Blog

by Tim Iacono When reading Wall Street Journal stories such as CBO: Unemployment Extension Would Add 300,000 Jobs, it’s easy to come away with the impression that the economic world we live in is radically different than it was just a few years ago. And, now almost three-and-a-half years after the Great Recession officially ended in 2009, […]

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Gold Can Save Us From Disaster

Posted by Gonzalo Schwarz
October 24, 2012
in Blog

by Steve Forbes A new gold standard is crucial. The disasters that the Federal Reserve and other central banks are inflicting on us with their funny-money policies are enormous and underappreciated. An unstable dollar is wreaking havoc on our capital markets, depriving us of money for productive enterprises and future enterprises while subsidizing government debt […]

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Book Review: John Allison’s The Financial Crisis and the Free Market Cure

Posted by Gonzalo Schwarz
October 23, 2012
in Blog

by John Tamny BB&T Bank has long been revered by those who think government has grown too close to the financial services industry. Led from 1989 until 2009 by the publicly libertarian John Allison, he took over as CEO when it was a small ($4 billion in assets) player in banking, and built it into a $152 […]

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Bad Advice for the Greeks

Posted by Gonzalo Schwarz
October 15, 2012
in Blog

 by Patrick Barron This summer Roger Bootle won Lord Wolfson’s £250,000 prize for the best advice for a country leaving the European Monetary Union (one may assume that this advice is aimed at Greece). A more statist, anti-liberal policy than his could hardly be envisioned, which is a sad commentary on the mindset of the judges […]

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Two Legends in Economics Wrestle Over the Euro’s Future

Posted by Gonzalo Schwarz
September 28, 2012
in Blog

By Shawn Tully FORTUNE — Robert Mundell and Allan Meltzer rank among the most influential economists of the past half-century. Mundell, a professor at Columbia University, garnered a Nobel Prize in 1999, in part for his work in defining what he calls “optimum currency areas.” No academic has ever enjoyed such success seeing his theories into […]

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“America is not Greece”

Posted by Gonzalo Schwarz
June 14, 2012
in Blog

From Zerohedge.com: For your definitive documented “X is not Y” atlasing needs. 1. “Spain is not Greece.” Elena Salgado, Spanish Finance minister, Feb. 2010 2. “Portugal is not Greece.” The Economist, 22nd April 2010. 3. “Ireland is not in ‘Greek Territory.’” Irish Finance Minister Brian Lenihan. 4. “Greece is not Ireland.” George Papaconstantinou, Greek Finance […]

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Is There No Escape from the Euro?

Posted by Gonzalo Schwarz
April 27, 2012
in Blog

by Philipp Bagus As I discussed recently, the costs and risks of maintaining the eurozone system are already immense and rising. So is an exit possible? Intuitively, the exit from the euro should be as easy as the entrance. Joining and leaving the club should be equally simple. Leaving is just undoing what was done before. Indeed, many popular […]

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Can the European Monetary Union Survive Greece?

Posted by Gonzalo Schwarz
September 26, 2011
in Blog

Failure to act carries the “threat of cascading default, bank runs and catastrophic risk,” [U.S. Treasury Secretary Timothy F.] Geithner said in a Sept. 24 statement to the IMF, his strongest public lobbying yet.

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“ECB Cannot Tailor Monetary Policy to Individual Countries” – FT

Posted by Tom Duncan
March 30, 2011
in Blog

“The benefit of maintaining price stability in the eurozone as a whole, and thereby keeping the inflation risk low, becomes even greater in times of crisis. At the height of the financial crisis, the ECB lowered interest rates aggressively in the face of downside risks to price stability. To the extent that these risks tilt […]

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The Only Financial Regulation You’ll Ever Need

Posted by Tyler Watts
March 28, 2011
in Blog

Financial industry regulation has been a hot topic in the wake of the Panic of 2008 and ensuing recession. Many pundits blamed the crisis on a vaguely-defined concept of “deregulation.” Over the years, they argue, governmental oversight of financial institutions was reduced, allowing banks—especially large ones—to build up too much risk. This allows bankers’ greed […]

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“Crises Nudge Debt Loads to Brink” – WSJ

Posted by Tom Duncan
March 28, 2011
in Blog

“The financial strains created by crises in Japan and Europe highlight a growing problem: The rich world is getting close to the point where it won’t be able to bear the costs of another disaster. Japan and Europe face very different crises—one brought on by nature, the other man-made. But from a financial perspective, they’re […]

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Prosperity and Depression – Harberler

Posted by Tom Duncan
March 24, 2011
in Blog

“Are you serious about business cycle theory? In 1937, back when economists thought big and coherent thoughts about the boom-bust cycle, long before mainstream economists began to doubt the existence of theoretical universals, Professor Gottfried Haberler, an exponent of the Austrian theory, wrote a full and wonderful treatise on the topic. He sought to answer […]

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“Stimulus Spending and Jigsaw Puzzles” – Coordination Problem

Posted by Tom Duncan
March 23, 2011
in Blog

“In a series of newspaper columns last year, Don Boudreaux compared the economy to a giant jigsaw puzzle with billions of pieces that can fit together in numerous combinations only a small number of which produce a meaningful pattern or picture. We learn which combos work because they “beep” every time we get one “right” […]

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“The Japanese Currency Intervention” – Mises Daily

Posted by Tom Duncan
March 23, 2011
in Blog

“The ostensible reason for the currency interventions was to promote stability. According to David Mann, head of research for the Americas at Standard Chartered Bank. “This is about limiting volatility and reducing uncertainty.” However, if stability is the goal, then fighting speculators is the exact wrong approach. Speculators actually reduce volatility, insofar as they are […]

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“The Federal Reserve Is Causing Turmoil Abroad” – WSJ

Posted by Tom Duncan
February 23, 2011
in Blog

“China and India blame the U.S. Federal Reserve for their difficulties in maintaining stable prices. The International Monetary Fund and the United Nations, always responsive to the complaints of developing nations, are suggesting alternatives to the dollar as the pre-eminent international currency. The IMF managing director, Dominique Strauss-Kahn, has proposed replacement of the dollar with […]

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“Chronicle of a Debt Foretold” – Economist

Posted by Tom Duncan
January 28, 2011
in Blog

“An odd thing occurred this week. Britain’s national debt jumped by £1.3 trillion, virtually 100% of GDP, and hardly anyone paid attention. The bad news was crowded out by the surprise 0.5% drop in national output in the last quarter of 2010. There was reason to this apparent insouciance. What happened was that the figures […]

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“U.S. Must Reduce Deficit, IMF Warns” – Washington Post

Posted by Tom Duncan
January 28, 2011
in Blog

“U.S. officials must act quickly to control government deficits or face slower growth and even more difficult choices in the future, the International Monetary Fund said Thursday in a report criticizing the tepid U.S. response to its rising public debt. The IMF warning comes as federal officials grapple with a congressional projection this week that […]

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“Forex focus: should Britain prepare for ‘stagflation’?”

Posted by Tom Duncan
January 27, 2011
in Blog

“Goodness, the market is jittery. The moment the latest economic growth figures were announced yesterday morning, sterling fell 1.25 per cent against the euro and one per cent against the dollar within minutes. Obviously, no-one was expecting that GDP would show a drop of half a per cent in the last three months of 2010. […]

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Horwitz versus Eggertsson on the Great Depression

Posted by Tom Duncan
January 25, 2011
in Blog

Over at Coordination Problem, Steve Horwitz discusses his exchange with Gauti Eggertsson in regards to Eggertsson’s claim that Roosevelt’s policies led the U.S. out of the Great Depression. Horwitz disagrees with this view of history. It is an interesting exchange and well worth the read. Below, I provide links to the original article and the […]

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“Global Price Fears Mount” – WSJ

Posted by Tom Duncan
January 24, 2011
in Blog

“Mr. Trichet argues that budget discipline would help growth in Europe more than renewed stimulus, and called on the euro zone’s 17 member countries to strengthen “surveillance” of each other’s fiscal policies. In Europe, budget discipline benefits growth and job creation by “improving confidence of households, enterprises, investors and savers,” said the 68-year-old Frenchman. In […]

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“Foreigners Shun Europe’s Bonds, and Debt Piles Up” – NYT

Posted by Tom Duncan
January 13, 2011
in Blog

“Greece. Ireland. And now, it seems, Portugal. While the circumstances that have driven these debt-ridden members ofthe euro zone to the brink differ, they share one common characteristic: all three countries aggressively tapped their domestic banking systems for more debt long after they had been shut out of international bond markets.” Read more.  “Foreigners Shun […]

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“The Debt Inflation Cycle and the Global Financial Crisis”

Posted by Tom Duncan
January 5, 2011
in Blog

“Writing over 230 years ago, Adam Smith noted the ‘juggling trick’ whereby governments hide the extent of their public debt through ‘pretend payments.’ As the fiscal crises around the world illustrate, this juggling trick has run its course. This paper explores the relevance of Smith’s juggling trick in the context of dominant fiscal and monetary […]

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“Lehman ‘Prophet’ Fears Second Crisis If US Interest Rates Are Kept Low”

Posted by Tom Duncan
December 29, 2010
in Blog

“The criticism of the Federal Reserve comes as it embarks on another $600bn (£380bn) of quantitative easing – or printing money – in an effort to fire up a stronger recovery next year. Interest rates around the western world, including in Britain, have sat at or below 1pc since the near collapse of the financial […]

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Why Do We Have a Central Bank?

December 6, 2010
in Blog

by Gerald P. O’Driscoll, Jr. Why do nations have central banks? Countries have developed without one, and sophisticated financial systems have evolved in their absence. Some countries with a central bank have suffered for having one. Zimbabwe comes to mind. The Federal Reserve System was created by an act of Congress only in 1913. It […]

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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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“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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“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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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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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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“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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“Regulators Must Get Rules of the Road Right”

Posted by Tom Duncan
October 28, 2010
in Blog

“Americans rely on financial services to help meet their needs: for retirement, education, homeownership and indeed every aspect of their lives…  Will the new rules ensure that the costs of credit remain accessible for businesses and individuals to meet their financing needs? What is the impact of the final rules on companies’ competitiveness when they […]

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“Toward a Free-Market Money”

Posted by Tom Duncan
October 27, 2010
in Blog

“Despite the overwhelming evidence that markets perform best when left alone by the government, it is still virtually taken for granted that one consumer product should be completely controlled by every government in the world. One product, so ubiquitous, that it’s used by almost everyone in the world on a daily basis: money. Money is […]

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“Bank Failures in Slow Motion”

Posted by Tom Duncan
October 27, 2010
in Blog

“Every Friday evening a few more banks are closed — seized by the various state banking regulators and handed over to the Federal Deposit Insurance Corporation (FDIC) for liquidation. This all happens rather quietly, barely making the news. We’re told these bank failures are no big deal. No reason to panic. The names of the […]

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“Monetary Theory and the Trade Cycle” – F.A. Hayek

Posted by Tom Duncan
October 27, 2010
in Blog

“It seems certain, however, that we shall merely make matters worse if we aim at curing the deflationary symptoms and, at the same time (by the erection of trade barriers and other forms of state intervention) do our best to increase rather than to decrease the fundamental maladjustments. More than that: while the advantages of […]

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Walter E. Williams – “Deregulation”

Posted by Tom Duncan
October 12, 2010
in Blog

Walter Williams, a professor of economics for George Mason University, speaks on the deregulation (or lack-thereof) that led to the financial crisis. The original video can be fond on LibertyPen.com.

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“Federal Reserve ‘Will Be Gone’ In 25 Years”

Posted by Tom Duncan
October 1, 2010
in Blog

“A mere half-hour after Treasury Secretary Timothy Geithner praised the “necessary” and “very substantial” actions of the Bush and Obama administrations to “break the back of the financial crisis,” one of the world’s leading financial minds said Thursday that the United States is in the same economic predicament today as it was in 2007, predicting […]

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Russia – “Inflation Could Trip New Exchange-rate Crisis”

Posted by Tom Duncan
September 28, 2010
in Blog

“This happy outcome was a result of serious efforts by the Finance Ministry to contain budget expenditure and by the Central Bank to restrain excessive monetary growth. Inflation control became the most important priority for the government because, apart from aiding economic recovery, a low inflation rate allows the Central Bank to keep its nominal […]

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“Ron Paul: Financial Reform Solved Nothing”

Posted by Tom Duncan
September 1, 2010
in Blog

“Just pretending that we can continue with the same monetary policy, the same Federal Reserve system, and all these guarantees sort of concedes that we’re going to have another bubble. If we have regulations and plans for how we distribute these assets later on, it just says that nothing has changed. That’s another reason why […]

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“Fed leaders had varied views on August policy action”

Posted by Tom Duncan
September 1, 2010
in Blog

“Federal Reserve officials were divided at their Aug. 10 meeting over whether they should resume purchases of Treasury bonds and what impact the move could have on the nation’s economy, according to minutes released Tuesday. In the end, the Fed’s policymaking committee elected to reinvest money from maturing mortgage securities in government bonds by a […]

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Third Point’s Second Quarter Investor Letter

Posted by Tom Duncan
September 1, 2010
in Blog

“As every student of American history knows, this country’s core founding principles included non-punitive taxation, Constitutionally-guaranteed protections against persecution of the minority, and an inexorable right of self-determination. Washington has taken actions over the past months like the Goldman suit that seem designed to fracture the populace by pulling capital and power from the hands […]

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“Spreading Hayek, Spurning Keynes”

Posted by Tom Duncan
August 30, 2010
in Blog

“To these free-market economists, government intrusion ultimately sows the seeds of the next crisis. It hampers what one famous Austrian, Joseph Schumpeter, called the process of “creative destruction.” Governments that spend money they don’t have to cushion downturns, they say, lead nations down the path of large debts and runaway inflation. Eight decades ago, in […]

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“Fed’s Hoenig Says Big Banks Still Benefit From Safety Net”

Posted by Tom Duncan
August 23, 2010
in Blog

“The largest U.S. banks have an implied government safety net that gives them a lower cost of capital compared to community banks even after a congressional overhaul of banking regulation, Kansas City Federal Reserve President Thomas Hoenig said. “Despite the provisions of the Dodd-Frank Act to end too- big-to-fail, community banks will continue to face […]

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“How to Feed a Recovery”

Posted by Tom Duncan
August 18, 2010
in Blog

“To get a sense of the current economic climate, I spoke with John Taylor, Stanford economics professor and George P. Shultz Senior Fellow in Economics at the Hoover Institution. He is well known in economic-policy circles for coining the Taylor rule, a monetary-policy principle that offers guidance on how to tinker with interest rates to […]

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“Fed May Reemerge as Bigger Buyer With Resumption of Treasury Purchases”

Posted by Tom Duncan
August 17, 2010
in Blog

“The Federal Reserve will likely reemerge as the biggest buyer of Treasuries when it resumes purchasing U.S. government securities today to prevent money from draining out of the financial system. JPMorgan Chase & Co. strategists estimate the Fed will buy about $284 billion in Treasuries over the next year, or more than the combined purchases […]

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“Treasury Fixing Mortgage-Finance System Juggles Limitless Bailout, Economy”

Posted by Tom Duncan
August 16, 2010
in Blog

“The U.S. Treasury Department, hosting a summit tomorrow on how to repair the mortgage-finance system, may get a blunt message from stakeholders in an industry tied to 15 percent of the country’s economy: Don’t screw it up. The system’s size and complexity mean that a wrong move by the Obama administration could restrict credit, drive […]

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“The High Costs of Very Low Interest Rates”

Posted by Tom Duncan
August 11, 2010
in Blog

“The prevailing view among economists, policy makers and Federal Reserve Board governors is that a zero or near-zero short-term interest rate stimulates the economy—the lower the rate, the better. It is time to re-examine this conventional wisdom. In fact, lowering interest rates too much may not stimulate recovery, but actually slow it. Yes, there are […]

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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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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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