Where Is The Inflation Today?

People often ask today: if the Fed has created so much new money, why hasn’t it produced more inflation?

When the Fed creates masses of new money, it initially flows to Wall Street, which profits from it in a variety of imaginative ways, but from there its path is unpredictable.

The Fed inserted into the TARP bill in 2008 the authority to pay interest on bank reserves. Of course this interest is paid by creating even more new money, but it provides an incentive for banks to leave reserves idle.

Interested in Managerial Econ? You Will Not Get This Kind of Education Anywhere Else

The syllabus to Peter Klein’s upcoming online course Austrian Economics for Managers: Lecture 1: Introduction Part 1: Review of Austrian microeconomics, introduction of key concepts
  • Thomas C. Taylor, An Introduction to Austrian Economics (Washington, DC: Cato Institute, 1980), pp. 7-51.
  • Ludwig von Mises, “Profit Management,” in Mises, Bureaucracy (New Haven: Yale University Press, 1944), chapter 3.
  • H.

Today at The Street, Dana Blankenhorn writes that you shouldn’t let the Austrians at the Mises Institute harsh your buzz. Blankenhorn implores his readers to “Ignore The Doomsday Chorus” and observes:
What most of today’s Doomsday Chorus has in common is a devotion to libertarianism and to Austrian Economics, which holds that there are absolute rules about economic behavior that can be deduced logically, and that government is powerless against these rules. Rob