Money and Banking

Aside from the error identified by Shostak this morning, another error concerning financial markets is th

Chris McGreal reports from Harare:

Mises knew why abandoning the principle of sound money would be so problematic: "In the opinion of the public, more inflation and more credit expansion are the only remedy against the evils which inflation and credit expansion have brought about."

The present glut in the money markets, with excessively cheap money and its attendant evils and dangers to the credit structure of the country, is due to the concurrence of three main causes.

We have today a hybrid of two forms of banking — loan banking (non-inflationary) and deposit banking (inflationary if not 100% reserve holdings).  The cause of booms is the credit expansion by central banks that is not backed by pools of private savings.

As new money is created by the banking system, it enters the price system as the recipients spend it.

Whenever economic activity stagnates or declines, they quickly lower their interest rates and expand their credits.

The student loan scandal concerns the fact that many colleges and universities chose preferred lenders for financing student loans and then receive

A fun little absurdity — AOL has a teaser that purports to show how a c

I was amazed that when Muhammad Yunus, head of the state-supported, quasi-socialist, regimentation-promoting Grameen Bank, received his Nobel Prize