Go for Gold

Why, after years of the market’s neglect of gold, is the paper money price of gold now on the rise? Would it be too far-fetched to assume that it could reflect market agents’ growing concern about a forthcoming great inflation of government controlled paper money? Tensions in credit markets might indeed provoke fears that central banks could, by way of lowering interest rates, pump even more credit and money into the economies, in an attempt to fend off a credit crisis and potential losses in output and employment.

Embracing Creative Destruction

Creative destruction (Joseph Schumpeter’s phrase) occurs when innovations — new technologies or business models — demolish the capital structures of well-established industries, industries that have lost the ability to satisfy the urgent wants of consumers. This process can happen almost over night, such as when the vinyl record industry collapsed in the wake of digital music. Or, the process can slowly run its course, similar to the decades-long crumbling of a building’s foundation. Here the process is akin to the way moss attaches to surface imperfections and degrades — over decades — the strength and resilience of concrete.

Greenspan Absolves Himself

Now that Alan Greenspan is no longer the Fed chairman, some financial commentators are daring to suggest that perhaps the present financial crisis is the result of the extremely low interest rate policy of Greenspan’s Fed between December 2000 to June 2004 that fueled the housing bubble. Greenspan denies it on grounds that the Fed has no control over long-term interest rates. While Greenspan is correct that the Fed does not directly manage long-term rates, writes Frank Shostak, it remains true that a main influence on long-term rates is the quantity of money and credit in the economy, a variable that the Fed can directly control through its management of short-term rates. To say otherwise is like claiming that the bathroom flood isn’t your fault, since you only control the faucet, not the height of the water in the tub.

The Postwar Renaissance II: Politics and Foreign Policy

Murray Rothbard discusses the critical turning point in Republican politics: 1946-1950. In the realm of direct politics, it seemed clear that there was only one place for those of us not totally disillusioned with political action: the “extreme right wing” of the Republican Party. It was solidly isolationist and opposed to foreign wars and interventions, and roughly free-market and libertarian in domestic affairs.

Last Knight Live Blog 12 Kraus

We write the year 1919. The lost war and the hardships that followed only intensified the process of political and economic disintegrations of the once mighty Austria-Hungarian Empire. Hopeless economic conditions contributed to greater, not less, tensions between nationalities, culminating in a total politico-territorial break-up, with entire nations seceding and building their own new states and cultural identities.

Misesian Economics in Truly Private Schools

State interference in education usurps the child’s rights and displaces the custodial role of the parents in exercising those rights. That the state would seize the custodial rights from the parents demonstrates that it has its own interests in mind. The state must resort to force because neither the child nor the parents want the natural arrangement to be overturned. Because the state rests on compulsion its activity extinguishes the very basis for the development of the personalities of children, which is freedom.

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