Monetary Policy

The chalkboard is the test. When Nigerian traders start painting their prices again, the reform will have worked, and no statistical release will be needed to confirm it.

While the government tells us that inflation is down because the CPI says so, there is another metric that tells a different story: measurement by gold prices.

With an election just six weeks away, we can count on the Federal Reserve to open the money spigots to bolster the economy. We will pay later—but we will pay.

Since fiat currencies, per se, are not redeemable for anything other than themselves, their very existence depends upon confidence.

The US economy these days seems to have a distinctive “K” shape, with asset owners riding the upward slope and everyone else the downward slope. But, while true, the reason for this situation is not what the ruling classes are claiming. The Austrians have the better explanation.

As the Federal Reserve desperately tries to force down interest rates of long-term US bonds, we should remember that the only way for those rates to effectively drop is for American savers to lower their time preferences.

Monetary authorities are wanting to remove currency and coin from the economy altogether and just have electronic transfers. That would be a mistake that would damage the free market.

Because of Keynesian inflationary bias, economists, politicians, and journalists celebrated the huge financial moves that Ben Bernanke made in 2008 and beyond to deal with the financial meltdown and its aftermath. But Bernanke’s moves didn’t help the economy; they made things worse.

Federal Reserve policy has been to expand credit out of nothing without regard for the real damage it does to the economy.

While mainstream economists add an “inflation premium” to interest rates, Murray Rothbard looked at the complete picture, knowing that the real rate of interest dealt with many factors within the structure of production.