The Fed

The Fed is always claiming to come up with new ways to make monetary policy less damaging to the economy. But Frank Shostak argues that this isn't possible.

Deflation was the great threat that never materialized, writes Gardner Goldsmith. The dollar still sinks in value.

Recorded in Houston, Texas; October 27, 1984.

Christopher Mayer explains why an Austrian analysis starts by examining the preceding boom phase of the business cycle.

Industry concentration is not usually a problem in the free market, writes Christopher Mayer. But the banking industry is hardly free.

So Greenspan says that Freddie Mac and Fannie Mae are so big and so out of control that they represent a threat to the whole financial system. Well, asks Frank Shostak, just how does Greenspan think they got to be that way? Might it have something to do with a central bank that guarantees the life of not only these two institutions but every bank in the US?

Boom, Bust, and the Future (28:31) January 18-19, 2002

Recorded at the Mises Institute, May 1994.

In a recent testimony, Greenspan argued that we must be grateful to the Fed for its loose interest rate policy since January 2001. Without this policy, he suggested, we would probably be suffering a terrible economic slump by now. Shostak's analysis, however, shows that instead of strengthening in financial conditions, the Fed's policy produce the exact opposite. The data show an unsustainable recovery and deteriorating underlying conditions.

Federal Reserve Chairman Alan Greenspan testified before the House Financial Services Committee on Wednesday and the Senate Finance Committee on Thursday. As usual, Wall Street and financial journalists were all in a tizzy. The Dow reached highs not seen since 2001, and the S&P 500 reached recovery highs. Bonds and the dollar scurried off in opposite directions.