Chapter 9: Monetary Inflation and Price Inflation
This chapter explains the connection between the quantity of money and the height of prices quoted in that money. The chapter therefore deals with the phenomenon of “inflation,” but as we shall see, the very meaning of this word changed during the twentieth century. (For clarity, we will distinguish the two concepts by using the more specific terms “monetary inflation” and “price inflation.”) We will summarize some of the famous episodes of hyperinflation throughout history, showing the disaster that results when governments run the printing press too aggressively.
Chapter 8: Ludwig von Mises’s “Circulation Credit” Theory of the Trade Cycle
Starting with Carl Menger’s undisputed role in the “marginal revolution,” which ushered in subjective value theory, the Austrian school has made important contributions that have been absorbed into standard economic theory. However, the Austrian theory of the business cycle is still something unique to the school, differing not only from the Keynesian (see chapter 14) but also the market monetarist (see chapter 15) explanations.
Part III: Applications
The Phillips Curve: Read the Fine Print
The Federal Reserve’s Dual Mandate is the Phillips Curve.
It’s not that the Fed is charged with the impossible task of reaching a state of 2% inflation and full employment; rather, the Fed is trying to obtain these two goals, believing (according to the Phillips Curve), these goals come as a trade-off needing to be managed.
Chapter 7: The Fed’s Policies Since the 2020 Coronavirus Panic
In chapter 6 we summarized some of the major changes in how central banks have operated since the 2008 financial crisis. In the present chapter, we detail some of the even more recent changes in Federal Reserve operations since the onset of the coronavirus panic in March 2020.
Size of the Fed’s Balance Sheet
The most obvious change in Fed policy has been the dramatic expansion of its balance sheet since March 2020.
Figure 1: Total Assets Held by the Federal Reserve
No, Sen. Warren, Greed Is Not Causing Inflation
Senator Elizabeth Warren recently stated that rising prices were due to corporations increasing their profits. “This isn’t about inflation, this is about price gouging for these guys.” It is simply incorrect.
No, corporations have not doubled their profits, and rising prices are not due to the evildoings of businesses. If evil corporations are to blame for rising prices in 2021, as Elizabeth Warren says, I imagine that they were magnanimous and generous corporations when there was low or no inflation, right?
The Fundamentals Point to Inflation That’s Much More than “Transitory”
Paul Krugman is at it again, this time with a series of a series of tweets that repeatedly miss the reality of price inflation and its causes. Let’s take a closer look:
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“Instead of protecting us, the State has delivered us and our property to the mob and mob instincts…. How can the State and the statist disease be stopped?” – Hans-Hermann Hoppe
The American regime has allowed its mask to drop. The state has shut down businesses and unleashed leftist mobs. It inflates away our currency and has weaponized our banks. It wants to politicize every aspect of our lives while eliminating any semblance of self-governance.
Fauci on Your Phone?
If the Senate follows the House of Representatives’s lead and passes the Immunization Infrastructure Modernization Act (HR 550), Americans who do not get the recommended number of covid vaccines can look forward to receiving a text like this: “This is Dr. Anthony Fauci. According to government records you have not yet received your monthly covid booster shot. Until you prove you are following vaccine protocols, your vaccine passport will be revoked, resulting in loss of your privilege to work, worship, and visit your family.”
