Wednesday, 18 October 2017

Fed

Unintended Monetary Policy Effects – Tale II: ECB Crisis Policies

July 16, 2017
in Blog

The Federal Reserve’s (Fed) and European Central Bank’s (ECB) policy responses to the recent financial disasters offer two tales of unintended consequences. Our previous post outlined the undesired effects of the Fed’s policies. In this post, we suggest that the ECB’s stabilization policies did not only fail to achieve its goals. Monetary policy has also […]

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QE is a Mistake—a Big One

Posted by Gonzalo Schwarz
February 26, 2014
in Blog

by Allan H. Meltzer, Carnegie Mellon University and Hoover Institution With $2.5 trillion sitting idle on bank balance sheets and more than $2 trillion additional sitting on corporate balance sheets, we should expect the Federal Reserve to ask: What can more quantitative easing—QE—do that banks and corporations cannot do without it? The right answer is […]

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Prof. Bernanke’s Monetary Mess

Posted by Gonzalo Schwarz
January 22, 2014
in Blog

By Steve H. Hanke             Most who have graded Prof. Ben Bernanke’s twelve years at the Federal Reserve have issued marks which range from A to a gentleman’s C. I think those marks are much too generous. Indeed, I think a failing mark would be more appropriate. In the ramp up to Britain’s Northern Rock […]

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Yellen, the Hawk?

Posted by Gonzalo Schwarz
October 29, 2013
in Blog

  By Steve H. Hanke This article appeared in the November 2013 issue of Globe Asia.   Well, it’s official. President Obama has picked Janet Yellen as his nominee to be the next Federal Reserve Chairman. In the months leading up to this announcement, the press unanimously dubbed Yellen the Queen of the Doves, pointing […]

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Little Difference Between Monetary Activists Yellen, Summers For Top Fed Post

Posted by Gonzalo Schwarz
September 3, 2013
in Blog

By JEFFREY BELL AND RICH DANKER There is thought to be a pitched battle raging within the White House over President Obama’s pick to succeed Federal Reserve Chairman Ben Bernanke when his term expires early next year. Bernanke’s deputy Janet Yellen is the liberal favorite for her vocal position in favor of continued monetary stimulus, […]

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What will stop the Fed?

Posted by Alex Chafuen
July 10, 2013
in Blog

by Alex Chafuen Central Banks have been tools to destroy rule of law in many countries. “The most secretive organization in America operates without any accountability to the American people. Hiding in the shadows, pretending to be part of the United States government, its power is beyond measure.”  A new thriller by Brad Thor uses […]

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The Federal Reserve vs. Small Business

Posted by Gonzalo Schwarz
June 4, 2013
in Blog

By Steve H. Hanke Given all the attention that the Federal Reserve has garnered for its monetary “stimulus” programs, it’s perplexing to many that the U.S. has been mired in a credit crunch. After all, conventional wisdom tells us that the Fed’s policies, which have lowered interest rates to almost zero, should have stimulated the […]

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The Fed’s Tightening Pipe Dream

Posted by Gonzalo Schwarz
March 5, 2013
in Blog

  Does the Chairman really believe that the Fed will be able to just sit back and watch the money supply unwind itself? by Peter Schiff Testifying before the US Senate this past Tuesday, Fed Chairman Ben Bernanke made an extraordinary claim about its bloated balance sheet: “We could exit without ever selling by letting […]

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The Myth of Fed Independence

Posted by Gonzalo Schwarz
March 4, 2013
in Blog

by Murray N. Rothbard [Excerpted from The Case Against The Fed.] By far the most secret and least accountable operation of the federal government is not, as one might expect, the CIA, DIA, or some other super-secret intelligence agency. The CIA and other intelligence operations are under control of the Congress. They are accountable: a Congressional committee […]

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Debunking the Myths About Central Banks

Posted by Gonzalo Schwarz
March 1, 2013
in Blog

By GERALD P. O’DRISCOLL JR. Myths govern modern central banking. Like many myths, they contain an element of truth that has been distorted by exaggeration and misapplication. This year marks the 100th anniversary of the U.S. Federal Reserve System—an appropriate time for some long-overdue myth-busting. The first myth is that central banks are intrinsically necessary […]

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Two Awful Anniversaries: Income Tax and Federal Reserve

Posted by Gonzalo Schwarz
February 18, 2013
in Blog

by Steve Forbes This year marks the 100th anniversary of the federal income tax (February) and the Federal Reserve System (December), both of which today are doing immeasurable harm. And, thankfully, both will be undergoing enormous changes. Income taxes punish the very things we want more of: productive work, risk-taking and success. We can’t say […]

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What Happens when Uncle Sam’s Sugar Daddy Runs out of Canes?

Posted by Tyler Watts
February 13, 2013
in Blog

The Wall Street Journal’s Real Time Economics Blog recently reported that, according to new CBO projections, the Federal Reserve will cease its annual “payments” to the US government by 2018. You’re probably wondering two things: 1. Why the heck would the Fed be funding the government—shouldn’t it be the other way ‘round? 2. How the […]

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Calling the Fed’s Bluff

Posted by Gonzalo Schwarz
January 10, 2013
in Blog

by Devin Roundtree Currently, the Federal Reserve is buying $45 billion in Treasury bonds in addition to $40 billion in mortgage backed securities a month. If you do the math, you end up with $1,020 billion on an annual basis. In order to calm inflation fears, the Fed claims that it can put the brakes […]

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Why Does College Cost So Much?

Posted by Devin Roundtree
January 8, 2013
in Blog

by Devin Roundtree By now, millions of freshmen have become well acquainted with collegiate life, including the part when they start racking up debt. With outstanding student loan debt surpassing the $1 trillion mark this school year, the debate over the cause of rising costs continues to grow. Lavish spending on everything from state of […]

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Sound Money vs. Stable Money

Posted by Gonzalo Schwarz
December 28, 2012
in Blog

by Kenneth Gould Historically, there have been two contrasting monetary doctrines. The first doctrine favors what it calls “sound money,” defined as money that has a purchasing power determined by markets, independent of governments and political parties. A true gold standard is one example of money that has an intrinsic value determined by markets rather than governments. Note that, under a sound money doctrine’s principles, a gold standard where the government […]

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Another Step Toward Helicopter Money, And Away From Freedom

Posted by Gonzalo Schwarz
December 28, 2012
in Blog

by James Dorn The Federal Reserve’s decision to enter the New Year by extending and enlarging its policy of quantitative easing is another step toward “helicopter money”—that is, directly increasing the public’s cash balances by an injection of high-powered money.  This could be done by dropping money from helicopters or by having the U.S. Treasury print […]

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Bernanke Hangs Loose

Posted by Gonzalo Schwarz
December 26, 2012
in Blog

by Frank Shostak On Wednesday December 12, 2012 Fed policy makers announced that they will boost their main stimulus tool by adding $45 billion of monthly Treasury purchases to an existing program to buy $40 billion of mortgage debt a month. This decision is likely to boost the Fed’s balance sheet from the present $2.86 trillion […]

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Livin’ It Up at the Hotel California

Posted by Gonzalo Schwarz
December 14, 2012
in Blog

(Reuters) – The Federal Reserve’s latest moves to reduce borrowing costs and boost the economy could be hard to reverse, a top Fed official said on Friday. “I argued that basically we were at risk of what I call a ‘Hotel California’ monetary policy,” Dallas Fed President Richard Fisher said in an interview on CNBC. Like the […]

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Myth 7: The Gold Standard was Responsible for the Deflation that Ushered in the Great Depression

Posted by Gonzalo Schwarz
December 13, 2012
in Blog

by Lawrence H. White The most prominent set of criticisms of the gold standard among academic economists in recent years blame the gold standard for the creating the Great Depression in the United States and for then spreading it internationally.  Douglas Irwin (2011, p. 1) summarizes the case and identifies its most cited source: Modern […]

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Fedophilia

Posted by Gonzalo Schwarz
December 6, 2012
in Blog

by George Selgin Although the movement to “End the Fed” has a considerable popular following, only a very tiny number of economists—our illustrious contributors amongst them—take the possibility seriously. For the rest, the Federal Reserve System is, not an ideal currency system to be sure (for who would dare to call it that?), but, implicitly at […]

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Forbes Review: Roads to Sound Money

Posted by Gonzalo Schwarz
December 3, 2012
in Blog

by Ralph Benko The only plank remaining under notable discussion from either national convention platform of 2012 is the GOP platform’s call for a national monetary commission.  Although widely reported as a call for a new “Gold Commission”, the actual text calls for a “commission to investigate possible ways to set a fixed value for […]

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Inflation, Unemployment, and Gold

Posted by Gonzalo Schwarz
November 28, 2012
in Blog

Written by Kathleen Packard Washington Post’s Neil Irwin wrote after the election, “To economists, inflation is the dog that didn’t bite. Despite fears among commentators that the Federal Reserve’s easy money policies would cause rising prices, the consumer price index rose only 2 percent over the last year, exactly what the Fed aims for. And investors […]

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Is the Fed Playing Chicken with Inflation?

Posted by Devin Roundtree
November 9, 2012
in Blog

According to the Bureau of Labor Statistics, consumer prices have risen only 2% since this time last year. But according to my eyes this is nonsense. For example, over the last month I have twice experienced the effects of large price increases with regards to America’s favorite poultry, chicken. During one weekend I was desperate […]

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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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Money Printing is the Only Thing Keeping the System Afloat

Posted by Gonzalo Schwarz
October 19, 2012
in Blog

By Alasdair Macleod Last Monday GoldMoney published my article showing the frightening growth in money-quantities for the US dollar. In that article I stated that the hyperbolic rate of increase, if the established trend is maintained, is now running at over $300bn monthly, while the Federal Reserve is officially expanding money at only $85bn. The first […]

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Memo to Mitt: Take Ben Bernanke’s Resignation On Day One

Posted by Gonzalo Schwarz
October 18, 2012
in Blog

by Ralph Benko One of the latent issues of the 2012 presidential race is a referendum on the Bernanke Fed.  If Romney is in, Bernanke is out.  Jeffrey Bell, a colleague at American Principles In Action and a high octane analyst, observes, “It is crucial for Romney to invite Mr. Bernanke’s resignation immediately upon his […]

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Money Mistakes

Posted by Gonzalo Schwarz
October 17, 2012
in Blog

  by Tom Woods As I noted not long ago, I find myself in serious disagreement with a portion of the end-the-Fed movement. This is the segment of the movement whose complaints are that the Federal Reserve is “privately owned,” that the Fed does not inflate enough, that interest payments are unjust or inherently unpayable […]

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Central Banks: Reform or Abolish?

Posted by Gonzalo Schwarz
October 16, 2012
in Blog

by Gerald P. O’Driscoll Jr. Advocates of central bank reform must examine why central banks emerged and what forces sustain them. They did not arise in an institutional vacuum, and will not be reformed in an institutional vacuum. The historical origins of central banks explain how they came into existence. The forces sustaining and feeding […]

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HuffPo’s 11 Myths About the Fed, Refuted

Posted by Gonzalo Schwarz
October 15, 2012
in Blog

by Tom Woods and Bob Murphy The other day the Huffington Post ran an article by a Bonnie Kavoussi called “11 Lies About the Federal Reserve.” And you’ll never guess: these aren’t lies or myths spread in the financial press by Fed apologists. These are “lies” being told by you and me, opponents of the Fed. Bonnie Kavoussi […]

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Signs of the Gold Standard Emerging in China?

Posted by Gonzalo Schwarz
October 12, 2012
in Blog

by Ralph Benko As noted in last week’s column about the rising recognition by authorities in Germany about the virtues of gold, the gold standard is receiving impressive new recognition internationally. The GOP plank calling for a commission to study “possible ways to set a fixed value for the dollar” — with an unmistakable nod to gold — […]

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Not Gold, Restrictions on Bank Freedom

Posted by Gonzalo Schwarz
October 9, 2012
in Blog

Why are people (who should know better) surprised that there were problems when banks were forced to wear strait jackets? by Kurt Schuler Two sharp economists whose blogs I enjoy reading were off-base last month on a common theme, which merits correction.Stephen Williamson said of Alan Greenspan’s 1966 essay “Gold and Economic Freedom” that Greenspan “thinks that the ‘golden’ age […]

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Easy Money Is Punishing the Middle Class

Posted by Gonzalo Schwarz
October 5, 2012
in Blog

A policy of low but persistent inflation anesthetizes workers to declining real wages. By SEAN FIELER With the Republican Party committed to a gold commission and the Federal Reserve committed to easy money, a substantive debate about the principles underpinning our monetary system is finally in the offing. For sound money to carry the day, Republicans […]

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Faber Warns ‘Everything Will Collapse’

Posted by Gonzalo Schwarz
October 4, 2012
in Blog

Famed economist Marc Faber appeared on Bloomberg TV with a harsh, direct warning to investors. “U.S. monetary policies will destroy the world,” he said, referring to the new round of stimulus – QE3, or “QE Forever” – the Fed plans to launch this year. As the publisher of the influential Gloom Boom & Doom report, […]

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Does QE3 Mark the Beginning of the End of the Bond Bubble?

October 2, 2012
in Blog

  With savings rates at historic lows and budget deficits at historic highs, it makes little sense that interest rates should remain this low for this long. While the Federal Reserve has received much praise for keeping rates low with its Quantitative Easing program, the congratulations rightfully belong to the European debt crisis. It is […]

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Twin Demons

Posted by Gonzalo Schwarz
October 1, 2012
in Blog

by Llewellyn H. Rockwell Jr. [This talk was delivered at the Mises Circle in New York City on September 14, 2012.] The 20th century was the century of total war. Limitations on the scope of war, built up over many centuries, had already begun to break down in the 19th century, but they were altogether obliterated in the […]

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How Crony Capitalism Corrupts the Free Market | David Stockman

Posted by Gonzalo Schwarz
September 27, 2012
in Blog

Archived from the live Mises.tv broadcast, this lecture by David Stockman was presented at the Mises Circle in Manhattan: “Central Banking, Deposit Insurance, and Economic Decline.” Includes a welcome and introduction by Llewellyn H. Rockwell, Jr. Music by Kevin MacLeod. Watch more at youtube.com/misesmedia… image: flickr.com/newamerica

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Interest Rates are Prices

Posted by Gonzalo Schwarz
September 27, 2012
in Blog

by Ron Paul One of the most enduring myths in the United States is that this country has a free market, when in reality, the market is merely the structural shell of formerly free institutions. Government pulls the strings behind the scenes. No better illustration of this can be found than in the Federal Reserve’s manipulation of […]

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QE3: Sowing the Wind

Posted by Gonzalo Schwarz
September 25, 2012
in Blog

by Frank Shostak The US central bank announced on Thursday, September 13, 2012, that it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month as it seeks to boost economic growth and reduce unemployment. In his press conference, following the conclusion of a two-day meeting of the […]

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The Federal Reserve Dissenters

Posted by Gonzalo Schwarz
September 20, 2012
in Blog

Richard Fisher and his allies at the Fed are a fine talent pool from which a new sound-money chairman might be drawn. By ROBERT L. POLLOCK The Federal Reserve’s near-zero interest rate policy has come in for a lot of criticism of late. Savers young and old are angry about paltry returns. Free-market advocates complain about […]

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What Would it mean to End the Fed?

Posted by Gonzalo Schwarz
September 18, 2012
in Blog

What would it mean to “end the Fed”? Professor Larry White says that in order to know the effects of such a measure, we must first understand the role of “the Fed”. The Federal Reserve is the central bank of the United States and the institution at the center of the nation’s monetary and banking […]

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What is the Fed’s Future?

Posted by Gonzalo Schwarz
September 5, 2012
in Blog

“Rep. Ron Paul sponsored this Congressional lecture on “What Is the Fed’s Future?”, the final lecture in a three part series on the Federal Reserve System for Congressional staff. As a continuing educational tool this lecture was filmed and is provided to the public. The lecture was delivered by Dr. Roger Garrison, Professor Emeritus of […]

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Ezra Klein Mistakes the Arsonist for a Firefighter

Posted by Gonzalo Schwarz
August 30, 2012
in Blog

by Steven Horwitz In Friday’s Washington Post, Ezra Klein raises a number of criticisms of the gold standard using as his hook the call for a new Gold Commission that appears in a draft of the new Republican Party platform.  Putting aside the question of party politics and what a new Commission might do, Klein’s arguments against the […]

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Slumping Money Supply (Not Austerity) Plunges Hungary Into Recession

Posted by Gonzalo Schwarz
August 22, 2012
in Blog

by Steve H. Hanke Hungary is in a recession, again. According to the chattering classes, as well as many analysts and financial reporters, fiscal austerity is the cause of Hungary’s slump. Nonsense. Hungary’s recession results from its slumping money supply. When monetary and fiscal policies move in opposite directions, the economy will follow the direction taken by monetary […]

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The Fed Has Forgotten Sound Money, And Now Just Manipulates Interest Rates

Posted by Gonzalo Schwarz
August 22, 2012
in Blog

by James Dorn While some members of Congress and Republican presidential hopeful Mitt Romney want to label China a “currency manipulator,” little is said about the Federal Reserve’s role as an interest-rate manipulator.  Interest rates are relative prices that should be freely determined in private capital markets, not manipulated by the central bank.  The Fed is […]

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How China Is Driving Federal Reserve Policy

Posted by Gonzalo Schwarz
August 21, 2012
in Blog

By JAMES RICKARDS During the Cold War, national security analysts spoke knowingly about the art of “Kremlinology.” This was a technique for understanding Soviet power relations and policy changes taking place inside the leadership compound in the Kremlin. The Soviet Union was completely opaque. One-time leaders could be demoted and new leaders advanced without any public […]

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Phase Out the Fed With Sound Money Laws

Posted by Gonzalo Schwarz
August 20, 2012
in Blog

Although it is very encouraging that the House voted 327 to 98 to audit the Fed last month, it is virtually certain that the Senate will not concur this year. Moreover, it is virtually certain that Congress will not act to end or phase out the Fed any time soon. So, what’s to be done about […]

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Gold Content of the U.S. Dollar from 1792-2008

Posted by Gonzalo Schwarz
August 16, 2012
in Blog

Do you remember the old Wendy’s commercials where the little ol’ lady would find her burger to be “lacking”? In an effort to keep prices from rising amidst perennial inflation, businesses reduce the size of their products; customers are much more sensitive to price rises than to quality degradation. That is why the price system […]

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How Andrew Jackson Killed the Second Bank of the United States

Posted by Gonzalo Schwarz
August 15, 2012
in Blog

by JESSE’S CAFÉ AMÉRICAIN: “Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you […]

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Monetary Reform: The Key to Spending Restraint is Golden Handcuffs

Posted by Gonzalo Schwarz
August 14, 2012
in Blog

Paul Ryan’s plan won’t succeed without legislation to prevent the Federal Reserve from monetizing the national debt. By LEWIS E. LEHRMAN No man in America is a match for House Budget Committee Chairman Paul Ryan on the federal budget. No congressman in my lifetime has been more determined to cut government spending. No one is better […]

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