Despite assurances from politicians and the media, the Federal Reserve System is not a collection of geniuses who stand guard against inflation and recession. Instead, think of the Fed policy makers as the Keystone Cops of central banking.
The "experts" solemnly tell us that deflation is even worse than inflation, and that deflation always will lead an economy into recession. The truth turns such "wisdom" upside down.
Despite assurances from politicians and the media, the Federal Reserve System is not a collection of geniuses who stand guard against inflation and recession. Instead, think of the Fed policy makers as the Keystone Cops of central banking.
The Fed's unprecedented monetary expansion has created damage that it cannot undo by switching directions.
Central banks, and especially the Federal Reserve System, continue to churn up inflation and the boom-and-bust cycles—in the name of "stabilizing" the economy.
While the usual characters praise central banks for supposedly bringing economic stability, Dr. Shostak explains that their presence makes things unstable because they break the relationship between saving and lending.
Jeff and Bob discuss the dynamics of the housing market in the context of a recent talk by Alex Pollock.
Keynesian orthodoxy claims government can successfully counter recession through "expansionary" policies. To the contrary, these policies increase the danger to the economy.
The success of Japan after WWII was due entirely to low taxes, an appreciating currency, and a very high personal savings rate. That all changed when the bubble was born in the late 1980s.
For nearly a hundred years, economists have been groping for an explanation for the business cycle, writes Murray Rothbard, while overlooking the Austrian explanation.
