Effective July 29, 2021, the Federal Reserve directed the New York Federal Reserve’s Trading Desk (the Desk), to:

Conduct overnight repurchase agreement operations with a minimum bid rate of 0.25 percent and with an aggregate operation limit of $500 billion; the aggregate operation limit can be temporarily increased at the discretion of the Chair.

What does this mean?

Most commentators’ regard savings as harmful to economic growth on the ground that savings are associated with fewer outlays. These commentators portray economic activity as a circular flow of money. Spending by one individual becomes part of the earnings of another individual, and spending by another individual becomes part of the first individual’s earnings.

Exchange Creates Value

Different from Adam Smith who presumed in his Wealth of Nations that the division of labor was caused by the “propensity to truck, barter, and exchange” as a part of human nature, Carl Menger explains the practice of exchanging goods as the result of its usefulness for human well-being. There must be more to it than pleasure when humans exchange goods.

I have three goals. First, I want to clarify the nature and function of private property. Second, I want to clarify the distinction between “common” goods and property and “public” goods and property, and explain the construction error inherent in the institution of public goods and property. Third, I want to explain the rationale and principle of privatization.

The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else. —Frédéric Bastiat

The General Concept of Value

The value of a good results from the knowledge that each partial attainment of that good is linked with a satisfaction of wants. A good is valued with the knowledge that its use serves to satisfy our desires.

The United States economy recovered at a 6.5 percent annualized rate in the second quarter of 2021, and gross domestic product (GDP) is now above the prepandemic level. This should be viewed as good news until we put it in the context of the largest fiscal and monetary stimulus in recent history.

Sixteen months ago, in March 2020, we argued for an end to government-imposed shutdowns of businesses, schools, churches, restaurants, and events due to the covid virus: