Thursday, 19 October 2017

Monetary Policy

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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The Monetary Policy Blinders

July 10, 2017
in Blog

I just read Ben Bernanke’s “The Federal Reserve and the Financial Crisis.” The book was actually published in 2013, and it contains his 2012 lectures at George Washington University. It contains four well written lectures that cover the history of the U.S. Federal Reserve and the 2008 financial crisis. Some of the complexities of the […]

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Hayek on sensible monetary policy

Posted by Jerry Jordan
August 15, 2014
in Blog

Hayek on Sensible Monetary Policy This year marks the seventieth anniversary of the publication of “Road to Serfdom”by Frederick Hayek, as well as the fortieth anniversary of the award of the Nobel Prize in Economics to Hayek. Hayek’s enduring contributions to our understanding of the “Uses of Knowledge in Society”and characterization of markets as “mutualization […]

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Another Financial Meltdown on the Horizon

Posted by Gonzalo Schwarz
July 2, 2014
in Blog

Is there another financial meltdown on the horizon? Dr. Judy Shelton who co-directs the Atlas Sound Money Project surely believes so. In her latest article in The Hill Dr. Shelton warns about the “alarming disconnect between the performance of global equity markets, which are booming, and an underlying world economy that is merely limping along”. […]

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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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Bernanke Talks, Markets Wobble. There Must Be a Better Way

Posted by Gonzalo Schwarz
May 28, 2013
in Blog

Rep. Kevin Brady’s Centennial Monetary Commission initiative might point toward a useful policy overhaul. By JUDY SHELTON Since Federal Reserve Chairman Ben Bernanke testified before Congress’s Joint Economic Committee Wednesday morning, commenting on the economic outlook and responding to questions from lawmakers on the likely path of monetary policy, financial markets have experienced turmoil. Triple-digit gains […]

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Keep Your Golden Eyes on China

Posted by Devin Roundtree
December 28, 2012
in Blog

by Devin Roundtree Due to the European Debt Crisis, little attention has been paid to the fundamental changes taking place in China. For more than a decade China has served as the biggest creditor to the United States government. But, two years ago, China apparently had a change of heart. The Chinese have long complained […]

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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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China Grasps Value of Gold, Even if U.S. Doesn’t

Posted by Gonzalo Schwarz
October 29, 2012
in Blog

by Roll Call Staff In the first presidential debate, both candidates portrayed themselves as innovative problem-solvers pursuing creative avenues to “grow” the American economy. Interestingly, GOP nominee Mitt Romney did not mention his party’s most creative idea, laid out at the Republican National Convention in Tampa, Fla.,: creating a national monetary commission “to investigate possible […]

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Sound Money Gains a Champion

Posted by Gonzalo Schwarz
August 28, 2012
in Blog

BY JUDY SHELTON   What are the chances that President Barack Obama and his Treasury secretary, Timothy Geithner, will ever have anything meaningful to say about monetary policy​—​beyond continuing to try to coax Federal Reserve chairman Ben Bernanke to print ever more dollars to buy up ever more U.S. government debt? About the same as 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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Return to the Gold Standard

Posted by Gonzalo Schwarz
August 8, 2012
in Blog

Written by Scott Gillette (H/T thegoldstandardnow.org) Gene Wilder’s character in the movie Young Frankenstein proclaims at one point, “Hearts and kidneys are tinker toys compared to the central nervous system!” The same analogy can be applied to almost any other political issue, which are hearts and kidneys compared to monetary policy, which would be the central nervous […]

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Led by Rep. Ron Paul, Congress Explores Sound Money

Posted by Gonzalo Schwarz
August 6, 2012
in Blog

Written by  Alex Newman As concerns over the U.S. dollar and the Federal Reserve continue to grow, U.S. lawmakers explored sound money, competing currencies, and the route to monetary freedom during an August 2 congressional hearing chaired by Rep. Ron Paul (R-Texas). It was the final House Domestic Monetary Policy Subcommittee hearing led by the long-time champion of […]

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We Should All Love Fed Transparency

Posted by Gonzalo Schwarz
August 2, 2012
in Blog

by John Aziz Ron Paul’s signature Audit the Fed legislation finally passed the House; on July 25, the House bill was passed 327 to 98. But the chances of a comprehensive audit of monetary policy — including the specifics of the 2008 bailouts — remain distant. Why? Well, the Fed doesn’t seem to want the […]

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Money, Where’s the Money?

Posted by Gonzalo Schwarz
July 23, 2012
in Blog

by Steve H. Hanke This article appeared in the August 2012 issue of Globe Asia. Since September 2007, when the British Government and the Bank of England bungled the Northern Rock affair, one government after another has sent in the boy scouts in an attempt to douse what has become an international economic wildfire. Their efforts […]

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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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Dr. Herbener on the Fed

Posted by Gonzalo Schwarz
May 14, 2012
in Blog

[Written Testimony before the Subcommittee on Domestic Monetary Policy and Technology Committee on Financial Services, US House of Representatives, May 8, 2012] In a seminal article published in 1920, Ludwig von Mises demonstrated that there is only one test of whether or not production of something conveys a benefit on society at large.[1] It must be […]

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Sound Money Interview Series: Dr. George Selgin

Posted by Gonzalo Schwarz
April 23, 2012
in Blog

Should a monetary system be centrally planned? Don’t make Dr. Selgin laugh. We sat down with Dr. George Selgin of the University of Georgia and discussed the history of central banking, the performance of the Federal Reserve, and alternatives to a government run money monopoly. First, what it all means in 3 minutes… Then, the […]

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There Are Two Ways to Fix Monetary Policy: the Fast Way, and the Right Way

April 4, 2012
in Blog

…and the government way. The expectations of modest growth in January by the Fed deflated to moderate growth in mid-March. The monetary policy that the Fed and the Treasury have followed have failed to have the desired effects. But that doesn’t stop policy makers from trying the same medicine – even if the name for […]

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Problems Facing Every Monetary System

Posted by Gonzalo Schwarz
April 4, 2012
in Blog

by Kurt Schuler Readers of George Selgin’s post just below should be aware that there is a an extensive comment section about it, including a few of his own remarks, over at Marginal Revolution. Now, on to what I promised to discuss in my last post, some time ago. Every monetary system faces a number […]

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Problems Facing Every Monetary System

Posted by admin
March 30, 2012
in Blog

by Kurt Schuler Readers of George Selgin’s post just below should be aware that there is a an extensive comment section about it, including a few of his own remarks, over at Marginal Revolution. Now, on to what I promised to discuss in my last post, some time ago. Every monetary system faces a number of major […]

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Unexpected Expectations

March 27, 2012
in Blog

Expectations are a key concept in economics. If expectations are coordinated, then the economy is equilibrated and no accumulation of imbalances take place. Rational expectations, more particularly, sustain that even though errors are possible, they shouldn’t be systematic. Namely, a given agent does nos systematically repeat his mistake, and all agents cannot be fooled on […]

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The Euro (Double) Standard

Posted by Tyler Watts
February 20, 2012
in Blog

The received wisdom in economic history places much of the blame for the Great Depression squarely on the shoulders of the gold standard. For instance, Berkley economist Barry Eichengreen states, “Far from being synonymous with stability, the gold standard itself was the principal threat to financial stability and economic prosperity between the wars” (Golden Fetters […]

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Monetary Equilibrium and Relative Prices

February 13, 2012
in Blog

There’s long been debate on the role of an elastic money supply in achieving monetary equilibrium in a free market. Namely, should the money supply follow a 100-percent reserve requirement on banks or should banks be allowed to make use of fractional reserves. The debate offers two lines of reasoning. An ethical argument in favor […]

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Water Is Wet, and Other Breaking News

Posted by admin
January 30, 2012
in Blog

Central bank policy is obscuring market values, Warsh tells Stanford audience. By: Chris Powell, Secretary/Treasurer, GATA Dear Friend of GATA and Gold: Central banks are now so heavily influencing asset prices that investors are unable to ascertain market values, former Federal Reserve Board of Governors member Kevin M. Warsh told the Stanford University Institute for […]

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Congress Changes Gold Into Paper, Dogs into Cats

Posted by Gonzalo Schwarz
December 28, 2011
in Blog

Ron Paul’s Domestic Monetary Policy and Technology Subcommittee Hearing entitled “Road Map to Sound Money: A Legislative Hearing on H.R. 1098 and Restoring the Dollar” 09/13/2011 (ed. We would like to note an additional argument made by the first witness, Dr. Parks, who points out that the Constitution’s 7th Amendment mandates a jury trial for […]

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Three Comments on the Gold Standard

December 12, 2011
in Blog

The financial crisis in 2008, the uncertainty about the future of the Euro and the doubts on the efficiency of monetary policy has brought some renewed interest in the gold standard as an alternative monetary system; or, at least, as a benchmark to evaluate if central banks did actually performed better or worse. This interest, […]

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What Happens If We End the Fed?

Posted by Gonzalo Schwarz
December 5, 2011
in Blog

Libertarians, some Occupy supporters are among those calling for an end to the Federal Reserve The “End the Fed” movement appears to have a lot going for it these days. Its adherents now include both conservatives and supporters of the Occupy movement. Perhaps its most prominent proponent, Rep. Ron Paul, has garnered respectable poll numbers […]

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Financial Crisis in Europe and Regime Uncertainty

November 28, 2011
in Blog

In recent days, Europe has seen two governments fall: the Prime Ministers from Greece and Italy. New governments where formed. Besides these important changes, the financial markets did not calm down; volatility and uncertainty did not go away as former governments did. This points to the fact that the problems in Europe are not political, […]

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Uncertainty and the Fed’s Job: More Hard Times Ahead

November 23, 2011
in Blog

In an exclusive interview with Reuters, Richard Fisher (President of Dallas’ Fed) said that the Fed has done its job: Fisher said, as he has repeatedly, that the Fed has done its job, keeping rates near zero for nearly three years and buying more than $2 trillion in long-term securities to send borrowing costs down still […]

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Cato Institute 29th Annual Monetary Conference: Monetary Reform in the Wake of Crisis

Posted by Gonzalo Schwarz
November 12, 2011
in Blog

CATO’S 29th ANNUAL MONETARY CONFERENCE — MONETARY REFORM IN THE WAKE OF CRISIS — will address the fundamental issue of how to prevent another global financial crisis — not by tinkering with the present government discretionary fiat money regime but by fundamental reform. The first step is to rethink the role of government and central […]

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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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Monetary Summit Today in Utah

Posted by Alex Chafuen
August 30, 2011
in Blog

I am planning to join some of the sharpest minds in business, finance, politics, law and economics, who are working to promote a framework for the future of monetary policy.  With the dollar’s slide accelerating and the economy trapped by slow growth and rising inflation, the world is calling out for sound money.  What will […]

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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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A Golden Moment?

Posted by Intern
July 25, 2011
in Blog

Article and photo originally published at The Weekly Standard William Kristol July 24, 2011 Judy Shelton makes the case in the new issue of THE WEEKLY STANDARD for the “Gold Standard or Bust.” Sound finances, she points out, require sound money, and sound money, it turns out, seems to require a dollar as good as […]

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Gold Standard 2012?

Posted by admin
June 16, 2011
in Blog

“A veteran conservative movement figure said today his group is launching a television ad and retail campaign in Iowa aimed at drumming up grassroots interest in a return to the gold standard… Arguments over the gold standard date back more than a century, and their ideological charge is linked in part to the fact that […]

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“Ben Bernanke Loses Control of the Fed”

Posted by Tom Duncan
May 24, 2011
in Blog

“The Fed is blaming the earthquake in Japan for disrupting first quarter global growth, plus droughts and other natural disasters which didn’t help. The problem for Bernanke and his allies on the Fed is that hardly anyone is buying this argument. Most financial analysts, economists, and CEOs are blaming inflation for the global slowdown, and […]

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“The Return of Stagflation” – WSJ

Posted by Tom Duncan
May 24, 2011
in Blog

“‘Stagflation” is an ugly word for an ugly situation: persistent high inflation combined with high unemployment and stagnant demand in a country’s economy. The term was coined by British politician Iain Mcleod in a speech to Parliament in 1965. We haven’t experienced it here in the United States since the bad old days of the […]

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“The Federal Reserve System’s Influence on Research in Monetary Economics” – White

Posted by Tom Duncan
May 18, 2011
in Blog

“The Federal Reserve System is a major sponsor of monetary economics research by American economists. I provide some measures of the size of the Fed’s research program (both inputs and published outputs) and consider how the Fed’s sponsorship may directly and indirectly influence the character of academic research in monetary economics. In particular, I raise […]

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“How Fed Policy Has Cost America $170 Billion” – Money Rates

Posted by Tom Duncan
May 18, 2011
in Blog

“Could the U.S. economy use an extra $170 billion right about now? Though the economy has shown fitful signs of growth, that growth is still so fragile that it remains to be seen whether it can withstand setbacks such as the rising price of gasoline. So, an extra $170 billion in the pockets of American […]

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“Kazakhstan’s Bid to Influence Global Finance” – Euronews

Posted by Tom Duncan
May 6, 2011
in Blog

“What is needed most is global financial stability. Many worry that the dollar-centred monetary system is sick, leaving some to present radical proposals. Judy Shelton from Atlas Economic Research Foundation, a US think tank is one of these people: “We can’t have a sound monetary policy until we have sound finances. I hope the future […]

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A Tiger by the Tail – Hayek

Posted by Tom Duncan
May 5, 2011
in Blog

“F.A. Hayek said that his biggest regret in a lifetime of writing was that he never wrote a book-length refutation of Keynesian economics. He seriously doubted that Keynesian style planning would ever captivate governments, so he focused on different things. Economist Sudha Shenoy decided to rectify the problem. As a Hayek scholar, she noted that […]

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Hayek On Deflation – Coordination Problem

Posted by Tom Duncan
May 4, 2011
in Blog

Over on the Coordination Problem blog, a number of scholars in the field of monetary theory are having an interesting discussion on the topic of Hayek and deflationary spirals. I am providing the link. I recommend a thorough reading of the comments. The post is titled: Hayek on Deflation Steve Horwitz Coordination Problem, May 3, […]

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“Targeting Inflation at 2% Is Too Low” – DeLong

Posted by Tom Duncan
May 4, 2011
in Blog

“First, the question is not whether the Federal Reserve should raise its target inflation rate above 2% per year. The question is whether the Federal Reserve should raise its target inflation rate to 2% per year. On Wednesday afternoon, the Federal Reserve chairman, Ben Bernanke, stated that he was unwilling to undertake more stimulative policies […]

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“Can the Federal Reserve Print to Prosperity?” – Forbes

Posted by Tom Duncan
May 4, 2011
in Blog

“The side affect of all of the money supply and low interest rates is that commodity prices continue to rise, which is hitting the middle class rather hard. And with consumers making up 70% of the economy, this is a real drag on real economic growth. We have printed a lot of money but the […]

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When Low Inflation is Too High

Posted by Tyler Watts
May 2, 2011
in Blog

Milton Friedman famously stated, “Inflation is always and everywhere a monetary phenomenon.” In other words, whenever you see persistent, high inflation, you know the cause was too much money. When too much money is chasing the same amount of goods, as they say, prices tend to rise; the faster the money supply is increased, the […]

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Neutral Money?

April 28, 2011
in Blog

The idea of money neutrality is a cornerstone in formal monetary theory. It is not free, however, of some controversy. If there are changes in money supply, why will the economy converge to the same equilibrium and not to a different one? If changes in money have a neutral effect in the long run, then […]

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