At the root of the current crisis in Europe are the actions of the European Central Bank. As Philipp Bagus explains in his for over a decade. A unique interest-rate policy for the greater monetary union led to wildly divergent real interest rates. High-inflation periphery countries
then the launch of similar and in some ways more radical monetary experiments in Europe and Japan have fuelled big devaluations of the euro and the yen. Meanwhile a have made indignant responses to Trump’s sound bites, pretending that the ECB (European Central Bank) and BoJ (Bank of Japan) respectively are institutions Merkel in the defence of the European status quo (including European Monetary Union [EMU] in its present form) has backed ECB chief Draghi pursuing policies of
in Slovakia, the burning issue was whether their government should kick in to the European Financial Stability Facility (EFSF), a €440 billion entity that would buy to do so would lead to a collapse of the banking system. In a similar vein, Europeans today are warned that they need to rescue the PIIGS governments lest the Maastricht Treaty contained rules on countries wishing to join the euro currency union. Specifically, government budget deficits were not to exceed 3 percent of GDP,
with the Fed’s currency swap with the ECB, which amounts to a covert bailout of European banks. But why did European banks need help from the Fed in the first place? of the euro leads to an ever-increasing rescue fund, and gradually toward a fiscal union and more centralization. A European financial government and the European super
keep inflation low. That’s in contrast to most Third World countries. Even Western Europe, which is far from Third World status, has a long history of monetary quickly.’’ Some think the euro might take a bite out of dollar demand. ‘’The European Monetary Union is explicitly trying to get some of the dollar’s market,’’ said Jeffrey
like Venus from the waves. In the United States and in virtually all the western European countries, government has grown slowly but steadily, and if unchecked this to drive specie out of circulation. At the beginning of the 19th century, most of Europe, insofar as it knew monetary exchange at all, used paper currencies. [11] And leaders of the London banking industry, and of the British cooperative and labor-union movements—were of course convinced that their country could not do without
economist, that World War I had brought to an end the preeminence of the classical European states system; that it had decimated the flower of European youth; that it standard had been officially embraced by the academic and political elites of Europe. It was here that the dollar and the pound were confirmed as official reserve intervals. Such monetary perversity cannot be sustained. A European monetary union may be necessary; but it is not sufficient. Now we see clearly what before we
the face of financial crisis, the current leaders of the Federal Reserve and the European Central Bank slashed rates and moved to support credit markets. Unlike do the allocation always leads to better results. Even the founder of the Soviet Union, Vladimir Lenin, understood this when he introduced the market mechanism for a controlled economy to fix all the problems forever? The collapse of the Soviet Union‘s centralized system is the best testimony one can have that controls don’t
What is the Mises Institute?
The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.