The Fed

Both the Federal Reserve and the European Central Bank are owners of the printing press. They produce base money.

In his speech at Jackson Hole, Wyoming, the Fed chairman disappointed most pundits. He did not promise another massive infusion of fake money, i.e., QE3. I suspect that a strengthening in bank lending is an important factor behind the Fed's decision to postpone it.

Although the trend could reverse, data from the past two months suggest that the inflationary big one may be upon us.  All of those pundits who hedged their predictions may need to go back to the drawing board. Recent releases from the Fed show that the excess reserves are starting to leak out.

Increases in money aren't sprinkled from the sky or distributed randomly throughout the population. They occur through the commercial banking system and the Federal Reserve. Those who receive the money first benefit at the expense of those receiving the money last.

These riots are fueled by the yob society generated out of the paper-money welfare state.

The "fundamentals" of the economy have been and remain awful, because the government and Federal Reserve are consistently doing the wrong things. The apparent recovery, fueled by Bernanke's sheer money creation, has been bogus all along.

Now that the debt "crisis" is over, we can explore two of the wackier proposals that emerged during the panic. 

After three-plus years of floundering around, a consensus has finally arrived that we are back in recession. Growth is not happening. The meager statistical growth of the past few years — no one dared claim it amounted to full recovery — was probably illusory.

Recorded at Mises University 2011. Includes an introduction by Mark Thornton.

Any student of money and banking recognizes the sophistry in saying that "the Fed does not pay with paper money."