A counterfactual experiment helps us realize the enormity of the present situation.

What Could Have Happened

Suppose the COVID-19 pandemic had hit the globe under sound money, say a gold standard regime. In that counterfactual there would be no overhang of virulent asset price inflation, no Federal Reserve at the ready to embark on endless (and limitless) QE (quantitative easing) and zero rates, and no megaprogram feasible for guaranteeing corporate debt issues as determined by the realpolitik of crony capitalism.

Listen to the Audio Mises Wire version of this article.

Listen to the Audio Mises Wire version of this article.

As we watch in real-time how governments respond to the novel coronavirus pandemic, some of the most predictable forms of state overreach—from restrictions on the freedom of assembly to the suppression of regular commerce—have been rolled out.

With election season well underway and political tensions heating up, everyone’s attention will be glued to the TV or their favorite political website for the next few months. Political ads will inundate TV and internet media as political action committees (PACs) and official campaigns beg for votes and donations while trumpeting their preferred candidates and exposing their rivals’ political misdeeds. It’s the same game every election cycle, but now it’s got a digital flavor to it just to keep up with the times.

Austrians and Libertarians are well-established critics of central banking in general, and emergency monetary stimulus in particular.

Yesterday I went looking to buy hand soap—not hand sanitizer, but regular old hand soap—in 7.5 ounce pump dispensers.  As you can see from the photo below, I found the shelves at my local Winn-Dixie supermarket completely bare. In lieu of the soap, I encountered a large sign that read, in part: “Please BE KIND to one another and limit yourself only to what you really need at this time.”  Alas, the sign did not work and never really had a chance.  For it was in direct conflict with the more powerful smaller signs advertising the&nbs

China and Russia are open for business and working at close to capacity as America shutters most all business and industry in states such as Pennsylvania, New York, California, New Jersey, and Connecticut. In many cases only select manufacturing companies are allowed to operate, which means that most manufacturers will be short of parts and services necessary to produce goods.

Abstract: This paper offers a synthetic and comparative assessment of the most basic Austrian macroeconomic models, i.e. the models that analyze the static forces determining the equilibrium interest rate and structure of production (monetary disequilibria and business cycles are not part of this investigation). The three models presented here are those of Böhm-Bawerk ([1889] 1959), Hayek (1936, 1941), and Garrison (2001).

The Fed came out with a series of unprecedented measures on March 22, 2020. They announced the Fed will buy an unlimited amount of Treasurys and mortgage-backed securities (MBS), or as Peter Schiff refers to it, “QE infinity.” This has been very positively welcomed by many in the mainstream media and by businesses. Yet, what many are ignoring is that the Fed has to do this to keep the bubbles that it has created going.