Monday, 11 December 2017

Financial Crisis

Money in Bad Faith

Posted by Gonzalo Schwarz
January 21, 2013
in Blog

The depredations of the Fed. by Judy Shelton The Federal Reserve is not your friend. Whether you reside on Wall Street or Main Street, whether you are a borrower or a saver, whether you lean toward the Tea Party or the Occupy Wall Street movement​—​or whether you simply believe in free markets and free people​—​loose […]

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“Fraude” New Documentary Film Based on Sound Monetary Analysis

Posted by Alex Chafuen
July 6, 2012
in Blog

Thanks to Instituto Juan de Mariana for providing the script based on sound monetary analysis for the film Fraude (Fraud).  The documentary is in Spanish and includes the opinion of leading economists based in Spain including Jesús Huerta de Soto, Carlos Rodríguez Braun, Juan Ramón Rallo, and many others.   The film explains how government intervention […]

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Missing the Point

May 8, 2012
in Blog

At The Economist blog Free Exchange, different opinions on the situation of Europe are discussed. More precisely, would fiscal austerity have made a difference, or was fiscal policy the right tool? Examples of economists in favor and against austerity are quoted to show the two positions, but the commentary is too framed on the issue […]

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The US Dollar Vs. Gold

Posted by Gonzalo Schwarz
April 27, 2012
in Blog

by Jim Willie CB – Hat Trick Letter   The so-called Global Financial Crisis is a term so widely used that it has earned its own acronym of GFC. When first seen, it seemed like girl friend club or some such, since many friends use GF loosely to refer to sweethearts. The GFC is falsely named, since it is more accurately […]

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Did Bernanke Prevent Another Great Depression?

Posted by Gonzalo Schwarz
April 20, 2012
in Blog

Did Al Gore invent the Internet? In a lecture given at George Washington University on March 27, 2012, the chairman of the Fed said that the US central bank’s aggressive response to the 2007–2009 financial crisis and recession helped prevent a worldwide catastrophe. Various economic indicators were showing ominous signs at the time. After closing […]

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Geithner Pens Another Ridiculous Op-Ed

Posted by Gonzalo Schwarz
March 2, 2012
in Blog

Remember how every bank under my supervision failed? That’s why I need more power. Submitted by Tyler Durden Nearly two years after his catastrophic foray into Op-Ed writing, here is Tim Geithner’s latest, this time making the hypocritical case to “not forget the lesson from the financial crisis”… which he himself ushered on America as head of the New […]

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Business Cycles, Open Economies and Wandering Bubbles

November 7, 2011
in Blog

In a previous post we commented on some aspects that are relevant for business cycles in the context of open economies. We also showed that in not a few cases the Mises-Hayek theory of business cycles is offered as an explanation of what went wrong. Even though business cycles have multiple causes and issues going […]

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Checkmate?

August 10, 2011
in Blog

The turmoils affecting the economics and financial markets in the United States and Europe do not seem to go away as fast as anyone would want to. Those who warned that this may be a crisis with a “W” shape may well be right. The recent downgrade in from AAA to AA- in the short […]

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Germany and the Financial Crisis

July 20, 2011
in Blog

Lately, a lot has been said about Greece, Spain and Italy in the financial crisis affecting Europe. The fear is that these economies can affect the performance of bigger economies, like Germany, one of the largest economies in the world and the second worldwide exporter. Germany, as well, is in a precarious situation given the […]

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Budget Reform in Italy

July 14, 2011
in Blog

Italy’s senate approved today a plan to cut government spending for the period 2011-2014. Italy’s public debt is more than 100% of GDP and the fiscal deficit was between 3% to 5.9% of GDP for last year. Similar situation is shared by other European countries like Greece, Spain, Germany, Portugal, Ireland and France. Europe, in […]

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Sovereign Debt Pressure

July 6, 2011
in Blog

The European countries seem to be facing a road with no easy exit. One on side they are facing fiscal deficits. On other side they are already dealing with an important debt amount that can hardly be sustained, as the case of Greece is showing these days. On even another front, governments are facing strong […]

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Greece and the Lost Opportunity of the Euro

June 23, 2011
in Blog

With the financial crisis affecting the United States and Europe, here and there are comments and concerns on what could happen with the dollar, the euro and even the international monetary order. With politicians and economists warning that the financial crisis can become the worst economic situation since the Great Depression, this concerns comes with […]

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“Fannie Mae, Freddie Mac, and the Future of Federal Housing Finance Policy” – Cato

Posted by Tom Duncan
May 18, 2011
in Blog

“The federal government recently placed Fannie Mae and Freddie Mac, the government chartered, privately owned mortgage finance companies, in conservatorship. These two massive companies are profit driven, but as government-sponsored enterprises (GSEs) they also have a government-mandated mission to provide liquidity and stability to the U.S. mortgage market and to achieve certain affordable housing goals. […]

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“Vincent Reinhart on Bear Stearns, Lehman Brothers, and the Financial Crisis” – EconTalk

Posted by Tom Duncan
May 12, 2011
in Blog

“Vincent Reinhart of the American Enterprise Institute talks with EconTalk host Russ Roberts about the government interventions and non-interventions into financial markets in 2008. Conventional wisdom holds that the failure to intervene in the collapse of Lehman Brothers precipitated the crisis. Reinhart argues that the key event occurred months earlier when the government engineered a […]

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“Robust Political Economy and the Federal Reserve” – Boettke and Smith

Posted by Tom Duncan
April 20, 2011
in Blog

“The economics profession not only failed to predict the recent financial crisis, but has been struggling in its aftermath to reach a consensus on the cause(s) of the crisis. While competing narratives are being offered and evaluated, the narrow scope of the debate on strictly technical aspects of monetary policy has precluded the examination of […]

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Sound Money and Financial Crisis

Posted by Tyler Watts
April 12, 2011
in Blog

One of the main virtues of sound money is stability. We sound-money types like to point out that financial systems built on core sound money principles—namely, free competition at all stages of money production and credit markets—are not nearly as prone to monetary crises and money-induced recessions. Sounds too good to be true, I know. […]

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Was There a Saving Glut or a Credit Expansion Glut?

April 7, 2011
in Blog

The Greenspan-Bernanke explanation on the cause of the financial bubble rests on the theory of the saving glut. According to this explanation, the problem was not that the Fed mismanaged the monetary policy, but that a saving glut that took place outside the scope of the Fed’s jurisdiction was the cause of the financial boom […]

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“Fed Aided At Least 111 Banks That Later Failed” – Boston Globe

Posted by Tom Duncan
April 5, 2011
in Blog

“The loans, made through the so-called discount window, transformed a little-used program for banks that run low on cash into a source of long-term financing for troubled institutions, some of which borrowed regularly from the Fed for more than a year. The central bank took little risk in making the loans, protecting itself by demanding […]

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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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“Why Financial Regulation is Doomed to Fail” – Econlog

Posted by Tom Duncan
March 16, 2011
in Blog

“Financial regulation may be the cleanest test of regulation in general, in the sense that if regulation works anywhere, it should work in the financial sector. Here, regulatory transparency is high: Banks report vast quantities of data to regulators, and regulators are easily able to check and audit the numbers. Regulatory compliance is even higher; […]

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“Oil Jump Presents Conundrum for Fed” – WSJ

Posted by Tom Duncan
March 8, 2011
in Blog

“Two top Federal Reserve officials on Monday offered conflicting views on the right response to higher oil prices, kicking off what’s likely to be a lively debate within the central bank. While Dallas Fed President Richard Fisher signaled higher oil prices may lead the central bank to roll back its huge monetary stimulus to prevent […]

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“Fed Officials Past and Present: ‘They Did It'” – Seeking Alpha

Posted by Tom Duncan
March 7, 2011
in Blog

“Lately, that seems to be the message coming from current and past Fed officials regarding the housing and credit boom in the early-to-mid 2000s. First Ben Bernanke, then Vincent Reinhart, and now Janet Yellen have come out saying it was excess savings by foreigners and failings in the U.S. private sector that was the root […]

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“Been There Done That: The Political Economy of Déjà Vu” – Boettke, Smith, and Snow

Posted by Tom Duncan
March 2, 2011
in Blog

“In the midst of the current financial crisis the economics profession has seen a monumental resurrection of Keynesian ideas. The debate, which Keynes started back in the 1930s, is being picked up again, not where it left off, but in exactly the same place it started. While Keynesian theories were carefully critiqued by new classical […]

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Housing America: Building Out of a Crisis

Posted by Tom Duncan
February 23, 2011
in Blog

“About seventy percent of American households own their own homes, and for many their homes represent the majority of their net worth. As evident by the cascading mortgage market meltdown and widespread defaults and financial bankruptcies, housing policy not only affects the quality of community life but also has a direct impact on their economic […]

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“More Than Just Greed” – Miron

Posted by Tom Duncan
February 17, 2011
in Blog

“In asking whether the recent financial crisis could have been avoided, the crucial fact is that crises of various flavors have occurred for centuries in countries around the world. Thus, any explanation based mainly on recent factors — subprime lending, derivatives trading, or financial deregulation — cannot be the whole story. A full account must […]

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“Can Government Manage the Economy?” – James Payne

Posted by Tom Duncan
February 1, 2011
in Blog

“For 98 years the federal government has been attempting to prevent asset bubbles, recessions, and spasms of unemployment. In 1913, Woodrow Wilson created the Federal Reserve System, telling the country that this new institution would be “a safeguard against business depressions.” In 1929, with the Fed in operation for 15 years, the United States plunged […]

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“Transcript: GOP Response From Rep. Paul Ryan” – NPR

Posted by Tom Duncan
January 26, 2011
in Blog

“Millions of families have fallen on hard times not because of our ideals of free enterprise — but because our leaders failed to live up to those ideals; because of poor decisions made in Washington and Wall Street that caused a financial crisis, squandered our savings, broke our trust, and crippled our economy. Today, a […]

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“Fed Up, Again” – Steve Hanke

Posted by Tom Duncan
January 14, 2011
in Blog

“One of the first casualties of a financial crisis is the truth. During times of stress, central bankers embrace a timehonored tradition: they issue anodyne statements that are economical with the truth. Central bankers are also prone to seize upon standard “solutions” that have been congealed into a crust of dogma by endless repetition and […]

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“The Great Debt Bubble of 2011” – Johan Norberg

Posted by Tom Duncan
January 14, 2011
in Blog

“‘The worst of the storm has passed,’ declared Barack Obama at the start of last year, seeking to calm the fearful. For his part, Gordon Brown assured Britain that talk of tough years ahead was ‘simply not true’. Both men spoke of their resolve to cure their economies, and did not seem to mind using […]

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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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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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“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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“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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“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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“China Hides Rampant Inflation in Money Binge”

Posted by Tom Duncan
October 21, 2010
in Blog

“When money is created at a faster rate than real economic growth, the result is inflation. Yet so far this year, China’s official statistics show consumer inflation at barely over 3 percent. Those figures have many economists scratching their heads, wondering where the inflation went, while most people in China seem content to believe their […]

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“Politics and the Fed”

Posted by Tom Duncan
October 20, 2010
in Blog

“The threat of politicization hangs over the Federal Reserve Board like the Sword of Damocles. It’s Capitol Hill’s response to the Fed’s proliferation of new programs to unglue credit markets. The Fed’s innovations threaten to create enough acronyms to tax the limits of the alphabet.” Read more.  “Politics and the Fed”  Alfred Tella  The Washington […]

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Limited Purpose Banking?

October 16, 2010
in Blog

by Jerry O’Driscoll The following is a book review from the Cato Journal, Vol. 30, No. 3 (Fall 2010). Jimmy Stewart Is Dead: Ending the World’s Ongoing Financial Plague with Limited Purpose Banking Laurence J. Kotlikoff (Hoboken, N.J.: John Wiley & Sons, 2010, 241 pp.) Chapter 1 of the book is titled “It’s a Horrible […]

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Central Banking, Limited Purpose Banking, Free Banking…

Posted by Tom Duncan
October 12, 2010
in Blog

“But if the problem isn’t in the application of the system, but it is the system, then all efforts to reform practice will fail, and fail miserably. This is what we believe the logic of economic argument leads one to conclude about central banking and government monopoly over the currency. We also believe that the […]

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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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The German Miracle: Another Look

September 10, 2010
in Blog

Earlier this summer George Soros and some leading Keynesian economists criticized what they regarded as Germany’s overly strict fiscal discipline. Yet Germany’s real output expanded at a robust 9% annual rate in the second quarter, while the U.S. economy grew at an anemic 1.6% rate. So is Germany now a role model for how to […]

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“Debt, financial crisis hurt U.S. competitiveness”

Posted by Tom Duncan
September 9, 2010
in Blog

“Government debt and deficits have emerged as a chief concern among developed world economies, as a decline in tax receipts during the recession and an increase in spending on stimulus programs combined to require record levels of government borrowing. Crafting an “exit strategy” – cutting annual deficits without undermining economic growth by doing so too […]

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The Contemporary Relevance of Robert Taft

Posted by Tom Duncan
September 1, 2010
in Blog

“For a conference this coming weekend, I’m reading a fascinating series of radio debates between Senator Robert Taft and Representative T. V. Smith that took place during the late 1930s. In the final installment, Taft is summing up his concerns about the New Deal. At one point he says the following, much of which could […]

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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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The Recovery is Artificial

Posted by Tom Duncan
August 27, 2010
in Blog

“The stimulus is causing an artificial rebound in the economy that cannot be maintained, says Jerry Jordan, former president of the Federal Reserve Bank of Cleveland.” Watch it here.  “The Recovery is Artificial” Jerry Jordan MoneyShow.com, August 19, 2010.

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“Fed Off’ls at Jackson Hole Discuss Tough Policy Challenges”

Posted by Tom Duncan
August 26, 2010
in Blog

“Federal Reserve policymakers and many of the world’s other top central bankers are gathering Thursday for their annual retreat and symposium in the shadow of the Grand Tetons. They are also meeting in the shadow of looming economic and financial problems, which seem to be defying the stimulative efforts of both monetary and fiscal policy. […]

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Is There a Government Bond Bubble?

Posted by Tom Duncan
August 25, 2010
in Blog

“YES, there is a government bond bubble. And it’s huge. Uncle Sam and his counterparts in the EU and Japan are broke and are, almost surely, going to print vast quantities of money to cover their enormous spending obligations. The printing presses are already working full time. The Fed, for example, has increased the monetary […]

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