Monetary Theory

The Fed has been messing with interest rates for a century and suddenly they have forgotten how to raise interest rates?

Central banks and their favorite economists are everywhere worried that central banks may be too weak to keep the current “expansion” going. If central banks are too weak now, what will happen when they get the strength they want?

In this interview, Mark Thornton talks to host Scott Horton about how we are much better off without the fed,

Many people think of their investments and their money in the bank as their savings, but savings and money are not the same thing. Nor will creating more money create more savings.

Paul-Martin Foss at the Carl Menger Center for the Study of Money and Banking has penned a nice retort to Dallas Fed President Richard Fisher, who recently criticized Rand Paul's introduction of an "Audit the Fed" bill in the US Senate.

ABSTRACT: Juan de Mariana may have had more direct lines of influence on the contemporary political denunciation of central banking in the United States than previously thought. As the culmination of a series of monetary theorists of the School of Salamanca, Mariana’s genius was his ability to synthesize and articulate a critique of the inflationary monetary policies of the Spanish Habsburgs. Furthermore, the Jesuit scholar linked his economic analysis to his equally scandalous endorsement of regicide. For their part, both the monetary policy concerns and the rebellious animus of the modern libertarian wing of American politics echo Thomas Jefferson’s views during the early Republic. These views also likely owe something to Mariana’s uniquely menacing confrontations with the Habsburgs. And thanks to the Virginian’s lifelong appreciation of Miguel de Cervantes’s great novel Don Quijote, which was itself heavily influenced by Mariana, the fascinating connections between Jefferson’s and Mariana’s politicized understandings of money are even further intertwined.

Money is an odd book. “Moderation” in the use of a bad measure is no virtue. If cyanide is poison, “drink in small doses” is not the appropriate response. Money falls exactly into this bad pattern.

There has been much hand wringing among popular blogger-economists in response to the breaking of the Euro peg by the SNB.

The Fed would have us believe that it has am impressive record of success in preventing recessions and improving the economy. The actual historical record suggests otherwise.

Zimbabwe, in the aftermath of years of hyperinflation, today has nine different currencies that are officially legal tender. The emerging system of multiple currencies offers a chance to make some interesting observations.