Contrary to Fed assumptions, we are not presently facing a problem of liquidity vis-à-vis Great Recession; we are confronted, instead, with a serious shortage of quality collateral.
Over eighty years ago, Keynes condemned the rentier and welcomed his future disappearance. Following in his footsteps, politicians and central bankers today are ever closer to effectively bringing this about.
Bernie Sanders wants a tax on financial transactions so that every trade brings a penalty. While this most directly affects big traders, regular people will not be immune to the effects.
Printing up paper money—which is the Fed's solution to nearly everything—will not bring about a miraculous replacement of the lost goods and services or repair broken supply chains.
By announcing that it is willing to throw up to $1.5 trillion in electronically created money in order to give three-month loans to those institutions that bought Treasury debt earlier, the Fed is bailing out not only the holders of Treasury debt, but also the Treasury itself.
A relatively new challenge to the Austrian framework comes from the “market monetarists” and their endorsement of a central bank policy of “level targeting” of nominal gross domestic product.
Although consensus building surely is an important and noble pursuit, one would think that it wouldn't really fall within the purview of a central bank president. It’s been clear for a long time that allowing politics to influence monetary policy carries significant and numerous risks.
Today's rate cut of 50 basis points is the largest rate cut since December 2008, in the midst of the aftermath of the financial crisis. But Chairman Powell insists the US economy is "strong."
