Austerity works. We know what it is and don’t like it, but it works. It usually means cutting your consumption and spending, paying down your debts, pawning assets, and working more hours to restore your economic situation.

You might invoke “austerity” because you lost your job, your house burned down, or you have an unexpected child on the way. You might take similar actions if the economy was in crisis. It’s essentially the same thing as cutting expenses to save for a down payment on a house, paying for a child’s education, or accumulating a fund for retirement.

In my research into Leonard Read’s writing, I recently came across his “Look to the Miracle!” in the May 1963 Notes from FEE. It struck me that what he had to say almost half a century ago about how his Foundation for Economic Education worked to advance liberty and how it resisted pigeon-holing in traditional ways is at least as relevant today.

Read first pinpoints the source of the pigeon-holing problem.

There are many mistakes in the G7 agreement to put a cap on Russian oil. The first one is that it does not hurt Russia at all. The agreed cap, at $60 a barrel, is higher than the current Urals price, above the five-year average of the quoted price and higher than Rosneft’s average netback price.

While many market participants are concerned about rate increases, they appear to be ignoring the largest risk: the potential for a massive liquidity drain in 2023.

Even though December is here, central banks’ balance sheets have hardly, if at all, decreased. Rather than real sales, a weaker currency and the price of the accumulated bonds account for the majority of the fall in the balance sheets of the major central banks.

Mises Institute Senior Fellow Alex Pollock was at the American Enterprise Institute yesterday to discuss his new book Surprised Again!―The COVID Crisis and the New Market Bubble.

Perhaps of special interest are his comments on the manias, and the social effects of easy money, beginning around the 57-minute mark. 

This article was originally published by Law&Liberty. 

The Swiss National Bank’s (SNB) financial statements for the nine months ending September 30, 2022, show a bottom-line loss of US$150 billion.1  A number to get your attention!