The worst of Bernanke's statements came in 2006, near the zenith of the housing bubble. This was the era of the subprime mortgage, the interest-only mortgage, the no-documentation loan, and the heyday of mortgage-backed securities.
Even though these economists — especially Diamond — are very smart and productive, they and their colleagues have hardly helped the plight of the unemployed, as we stumble ever deeper into depression.
Our analysis indicates that not only can fiscal stimulus not revive the economy but, on the contrary, it can also make things much worse.
The best remedy would be for the government to stop interfering and let the market process work.
"As a response to the actions of the Bank of England, the Currency School proposed a simple, yet powerful limitation on the bank: a 100-percent reserve requirement on the issue of new bank notes."
"Through Fed monetary policy, the dollar is cheapened to produce an economy on steroids that eventually breaks down."
Rothbard shows that Gresham’s law was introduced not by Sir Thomas Gresham but by the “arrogant, boorish, and feisty” Sir Thomas
Bankers can spend their interest payments on real goods and services, thereby returning that money to the public, which can then use it again for further debt payments.
"Under deflation, it is those non–wealth generating activities that end up having the most difficulties in serving their debt, because these activities were never generating any real wealth and were really supported or funded, so to speak, by genuine wealth generators."
"Deflation is one of the great scarecrows of present day economic policy and monetary policy in particular,"
