Milton Friedman and the Monetarists believed that fluctuations in the money supply caused the boom-and-bust business cycles. Their solution—keeping money growth slow and steady—would still lead to business cycles.
A long-enduring myth about money is that we need a flexible or "elastic" currency for the economy to grow. Economist Jonathan Newman joins us to talk about why this has never been true.
According to mainstream economists, inflation aids economic growth while deflation impairs growth. Austrian economists, however, point out that in much of US history, economic growth was accompanied by deflation.
Through its coercive monopoly over money creation, government constantly engages in silent theft through inflation, all done in the name of “stimulating” the economy.
According to mainstream economists, inflation aids economic growth while deflation impairs growth. Austrian economists, however, point out that in much of US history, economic growth was accompanied by deflation.
The political establishment is trying to stoke panic that Trump is “politicizing” the Federal Reserve. But it’s already political. The real danger, from their perspective, is not that Trump is changing the Fed; it’s that he’s making its true nature harder to hide.
Mainstream economists have justified the creation of the Federal Reserve because they claim that a growing economy—especially the banking system—needs an “elastic” currency. In other words, the economy “needs” at least some inflation. Austrian economists know better.
Lower interest rates can help promote economic growth—as long as those rates are determined by the market and not by political edict.
Bob explains why blaming private equity for America’s housing woes misses the deeper economic forces at play, from speculation to Federal Reserve intervention.
The gold price is off and running this week. But, money creation isn’t listed as a cause.
