Monetary Theory

All action is really exchange. What the actor prefers less is exchanged for something he prefers more, including gift giving. It is a fallacy to say that the goods exchanged have equal value.

The absence of a central bank in Panama has created a completely market-driven money supply. Panama's market has also chosen the US dollar as its de facto currency. The country must buy or obtain their dollars by producing or exporting real goods or services; it cannot create money out of thin air. In this way, at least, the system is similar to the old gold standard. Annual inflation in the past 20 years has averaged 1% and there have been years with price deflation, as well: 1986, 1989, and 2003.

Where is Bernanke going to create the next bubble, the one that will mask the hangover from the housing bubble in the same way that the housing bubble masked the hangover from the tech stock bubble?

The ancient transgressions of murder, pillage, bestiality, thievery, and rape still shout from the headlines.

Because of Iran's great oil wealth, it has been able, thus far, to stave off a hyperinflationary blow-off.

Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term "inflation" to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise.

That’s the effect of minimum wage laws, says John Egge

Sophistpundit gives What Has Government Done to Our Money (

The heady mix of human credulity and overeasy money was still producing the same old, intoxicating brew in the marketplace.

And, perhaps, it also explains why a careful analysis of the time structure of production (not in terms of an "average" period of production) is a necessary basis for a satisfactory analysis of the trade cycle.