Monetary Policy

Thanks to government elites, the only thing that matters is money, as the Federal Reserve has been creating it in ruinous amounts, pretending it is being responsible.

The traditional explanation of the Panic of 1837 recognizes that excessive bank credit expansion generates inflation, speculation, and economic instability. Yet, the same mainstream explanation wrongly presupposes a national bank was the solution to those problems.

The demise of American coinage is the story of US money in a nutshell. Coins were made of gold and silver. Today, even coins of base metals have face values less than the value of the metal itself.

On September 16, twelve people voted. The vote was 12 to 0. The Federal Open Market Committee raised the federal funds rate a quarter point, to 3.75 to 4 percent—the first hike since 2023.

One of the most popular ideas in the Keynesian lexicon is the belief that through monetary manipulation and government outlays, an economy can spend it self rich, thanks to the “multiplier.” It is dangerous nonsense, like so much else of what Keynesians preach.

MMT proponents, in the words of Ludwig von Mises, see "something miraculous in the issuance of fiat money"—they see in the government a power that surpasses "the art of sorcerers, witches, and conjurors."

According to Milton Friedman, the Great Depression happened because the Federal Reserve followed a “tight” monetary policy. The truth is that the Fed's loose monetary policy during the 1920s created the conditions for a crash and subsequent depression.

Fed Chairman Kevin Warsh has raised the Fed’s discount rate—to the chagrin of President Trump—but it is doubtful Warsh’s actions will be effective against inflation.

Mainstream economics does a disservice when students are taught that money is a medium of exchange, a store of value, and a unit of account without explaining why and how money came to function in those categories.

Mainstream economics does a disservice when students are taught that money is a medium of exchange, a store of value, and a unit of account without explaining why and how money came to function in those categories.