Financial Markets

It shouldn't come as a surprise if it eventually turns out that the real danger is, like so often in the past, inflation rather than default.

Recorded at Jekyll Island, Georgia; 27 February 2010.

"There is no such thing as a nonspeculative investment.… In a changing economy action always involves speculation. Investments may be good or bad, but they are always speculative."

Finally, the most interesting aspect of the giant credit-card industry is the simple fact that it works.

Therefore, whether it is disproportionally hurting African-American teen workers with minimum-wage laws or further endangering already-endangered species, the state is no match for market mechanisms. It remains a slave to unforeseen consequences.

Victims of micro-level Ponzi schemes are only greedy; they don't infringe upon others' freedom. The same can't be said of those who demand that we all participate in these macro-level Ponzi schemes.

When pietists shift to the Republican party, they form the progressive movement of 1900-1920. Rockefeller- McKinley forms alliances with power brokers like Kuhn, Loeb & Co., and Harriman (versus the Morgans).

When interest rates drop, entrepreneurs have no reliable way to tell whether, and to what extent, the drop is caused by (A) true increases in the ongoing flow of investable resources or by (B) what amounts to a temporary series of one-time transfers of wealth into the loan market. With such Fed-imposed blindness to the true data of the market, businesses across the whole economy are bound to make malinvestments.

Thus, Mankiw's solution for dealing with unprecedented excess reserves is for the Fed to create even more reserves in order to pay bankers not to make new loans. Does that sound like a good long-term plan for the economy?