Booms and Busts

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We're Headed toward Stagnation—Unless the Fed Reins In Its Money Printing

Booms and BustsInflationThe Fed

Blog09/08/2020

Eventually, loose monetary policy will damage real savings to the point that the economy can no longer sustain sufficient economic growth. At that point, it will become clear that money printing can't create economic growth.

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Bankruptcies Rise Despite Trillions in New Liquidity

Booms and BustsInflationFinancial Markets

Blog09/07/2020

Liquidity only disguises risk; it does not resolve solvency issues driven by collapsing cash flows while costs remain elevated.

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The Fed's Latest Lie: It Can Make Everything Go Back to Normal

Booms and BustsInflationThe Fed

Blog09/03/2020

The mother of all monetary stimuli could turn out to be worse than a dud—a catalyst to a slide into further recession just as the supply shock of pandemic recedes.

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Monetary and Fiscal Sorcery Make Home Price Magic

Booms and BustsFinancial Markets

Blog09/03/2020

Just how is this magic created? The spurring of demand in the midst of a covid-created depression. The wizards at the Fed and Treasury have created an intoxicating frothy brew for stock and home buyers alike.

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Massive Stimulus Won't Prevent a Eurozone Slowdown

Booms and BustsCronyism and CorporatismMoney and Banks

Blog08/28/2020

Europe's path to long-term stagnation should serve as a reminder for the United States, again, of why it is not advisable to follow the eurozone policies. The results are invariably disastrous.

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How the CARES Act Is Still Kicking the Can

Booms and BustsMoney and Banks

Blog08/27/2020

Despite double-digit unemployment rates, banks are keeping loan-loss provisions low, no doubt assuming Uncle Sam will keep everyone’s boat afloat. But all good things come to an end.

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A Poor Understanding of Monetary Theory Leads to Disastrous Government Policies

Booms and BustsInflationTaxes and Spending

Blog08/22/2020

Since government creates nothing itself, all interventions are nothing more than transfers of wealth for the benefit of some and the destruction of wealth for everyone else.

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As the Bubble Slowly Pops, the Economic Chain Reaction Is Now in Progress

Booms and BustsFinancial MarketsPrice Controls

Blog08/18/2020

Our high levels of malinvestment mean that negative interest rates will not have the steroidal effect that's hoped for. But they will deliver another few years of subpar debt-fueled economic activity.

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Throwing Printed Money at This Problem Won't Make It Go Away

Booms and BustsFinancial MarketsU.S. History

Blog08/10/2020

The crisis we faced in 2008 has not gone away, as we failed to heed its warning to change course and reduce debt levels. Instead, it has become bigger and more dangerous.

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Say's Law and the Effects of a Growing Money Supply

Booms and BustsMoney and Banks

Blog07/31/2020

Economic growth results from increasing production, and the money supply is always sufficient to foster exchange. The boom-bust cycle only occurs when production is distorted by a growing money supply.

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