Money and Banking

Presented at Mises University 2019.

 A major factor that can explain the apparent contradiction between weakening so-called fundamentals of today — and the stock market's continued march upward — is changes in monetary liquidity.

Mises's fundamental accomplishment was to take the theory of marginal utility and apply it to the demand for and the value, or the price, of money. 

Government manipulation is shifting wealth from Main Street to Wall Street. But most people don't see the growing gap between the growth of financial wealth and the real economy.

Given that Fed policymakers are of the view that a decline in the annual growth of prices is bad for the economy they are most likely to embark on very easy monetary policy in near future.

The gold price is heading up at the moment, but we can still learn a lot from three big collapses in the gold price which occurred after 1934.

Jeff Deist and Mark Thornton discuss the works of one of the fathers of modern economics: Richard Cantillon. 

The "Velocity of Money" Is a product of human choices and human values. It's not something we can just plug into an equation.

The central bank can try to manipulate the interest rate to whatever level it desires. However, it cannot exercise control over the underlying interest rates as dictated by people’s time preferences.

The Fed’s monetary policy, except for very brief periods in 1929 and 1936–1937, was consistently and unremittingly inflationist in the 1920s and 1930s.