At the end of the day, inflation is a serious threat to freedom. The majority of the people, suffering badly from inflation, would most likely blame the free market for their plight, rather than blame the central bank for the debasing of the currency.
Let us say that the present aggressive interest rate stance by the Fed fails to prevent the economy from falling into a recession; what kind of action is Bernanke then going to undertake? In some of his writings, he has suggested that, under such circumstances, the Fed should adopt a very aggressive stance and start pushing money on a massive scale, i.e., helicopter money. Needless to say that if this were to happen, Bernanke would run the risk of badly damaging the foundations of the real economy.
Since it's so important, the main point just made needs to be repeated: credit expansion creates an artificial economic inequality by showing up in the stock market and driving up stock prices. Since the stocks are owned mainly by wealthy people, they are the main beneficiaries of the process. The more substantial and the more prolonged the credit expansion is, the larger are the gains enjoyed by wealthy people more than anyone else.
The insufferable Henry Blodget, the disgraced
Although most commentators concede that the free market does a decent job providing regular goods and services day in and day out, for some reason
Markets are ruthlessly efficient, meaning in large part that people will not undertake investment proj
Investments pay you money every month. Homes are just the opposite – money pits.
Mises said that such a monetary policy would ultimately end in the destruction of the exchange value of money.
Inflation, in case we've forgotten, is robbery by another name.
