The Fed

Given the monetary dark arts being practiced around the world, I would much prefer my money in the hands of Gringotts goblin, than at the mercy of our Federal Reserve Chairman Who-Must-Not-Be-Named.

If helicopter money is implemented, those who first gain the use of the new money may benefit by increasing consumption before prices rise, while others will see prices rise before they are able or willing to use the money. But the end result will be higher prices but no overall increase in welfare. 

The Fed says it's scaling back its Quantitative Easing programs, but it still maintains a huge balance sheet. Unfortunately, the Fed has no plan to really unwind its massive QE programs, and has backed itself into a corner.

Analogies involving cars and firepower are not appropriate for monetary policy. They propagate the idea that the Fed can carefully "steer" the economy or that they have some large, heterogeneous set of policy tools, when the Fed can really only do one thing: artificial credit expansion.

Speculation is swirling as to what the Federal Reserve might do next. None of the likely next steps are terribly promising.

Central banks are in the business of price controls through monetary policy. But, when monetary policy fails, as it is doing now, central banks may look toward more broad forms of price controls as well.

Recessions are good for an economy because they involve a resolution process, but a big recession for this boom town could be great for the world economy.

The recent FOMC decision on Fed policy going forward was not unanimous. Let's take a look at who voted against the rest of the committee.

Jeff Deist discusses Austrian economics and the bizarre world of negative interest rates.

Listening to even a small portion of Simple Janet's incoherent babble makes very clear that the nation's central bank is well and truly impaled on its own petard.