In the same year that the Bank of England was created – 1694 – John Law became a fugitive. He killed a man in a duel, was thrown in prison awaiting execution, and escaped to Europe. After some years of gambling his way through the European courts and writing surprisingly prescient texts on monetary economics he landed in France. One of history’s first grand experiments with unbacked paper money was about to begin.
The money supply growth rate fell in August, dropping to a 150-month low. To find a lower growth rate, we need to go back to August 2007, when the rate was 1.59 percent.
During August, year-over-year growth in the money supply was at 1.87 percent. That down from July’s rate of 2.19 percent, and was well down from August 2018’s rate of 4.48 percent.
The Fed met market expectations by cutting its target for the fed funds rate by 25 basis points, down to the range of 1.75 - 2.00 percent. In this post I want to demonstrate just how boxed in the Fed has now become, with the help of 3 charts.
First, let’s review just how low interest rates have been (and still are), in a long-term historical context:
Every economics undergraduate is taught that economics is a positive science. Introductory textbooks always take the space to emphasize that the economist qua economist can never establish ethical judgments. In his capacity as a social scientist investigating economic problems, he can only describe and explain the world as it is, never as it ought to be.
Do central bankers really think negative interest rates are rational?
Listen to the Radio Rothbard version of this article.
One of the central problems of aggregate measures of national income and well-being is the fact so much of it relies on incomes, wealth, production, and consumption measured in terms of dollars.
Today would have been Joey Rothbard’s 91st birthday. She was Murray Rothbard’s “indispensable framework.” She was a scholar in her own right, but she devoted her life to helping Murray. She was a wonderful friend, and I miss her very much.
Housing is one of the main drivers in the cost of living. Government increases this cost through zoning regulations, complicated impact fees, and permitting delays. This is a fact that was even acknowledged by the Obama administration when it stated:
“Barriers to housing development are exacerbating the housing affordability crisis, particularly in regions with high job growth and few rental vacancies.”
