Money and Banking

America is plagued by mountains of debt, cheap money, and an out-of-control central bank. But the situation with the European Central Bank is even more dangerous. 

There is much talk these days about Fed "transparency" easing the effects of monetary policy. But it is not possible to deflate the present gigantic monetary bubble without a severe economic bust, and a policy of transparency employed by the Fed cannot prevent the inevitable bust.

"Because there's so much debt today relative to 10, 15 years ago, a small debt, a small move in yields, 50 basis points in yields today is equivalent to 2% 15 years ago."

Trouble emerges once banks start to engage in lending unbacked by real savings, this gives rise to the expansion of credit out of “thin air.”  This in turn sets in motion the menace of the boom-bust cycle.

The financial press gives us the what, when we need the how and why. Economic journalism needs a reset.

China was one of the first countries to develop a metallic money that was valued and exchanged by weight. Evidence suggests that this monetary regime originated during the Shang Dynasty (1766–1122 BC). 

Monetary sovereignty is not something the government decides. It all depends on the public's demand for a currency. That demand comes and goes, and once it's gone, a currency is irreparably damaged. 

If Europe wants to build wealth for its poorest members, it needs private entrepreneurship. But entrepreneurs need exactly the opposite of the Keynesian plan for building a European superstate. 

Rothbard recognized that money and exchange could not develop without first establishing private property. So Rothbard also recognized that it was important to develope theories of how private property might come about. 

If Europe wants to build wealth for its poorest members, it needs private entrepreneurship. But entrepreneurs need exactly the opposite of the Keynesian plan for building a European superstate.