Monetary Policy

Each economic crisis brought on by loose money brings on a “solution” of...looser money. This pattern is not just a threat to the economy but to our very freedom itself.

While most economists believe that central banks set interest rates, in reality, they are set by time preferences of individual actors in the economy. Central bank influences on interest rates ultimately result in setting off boom-and-bust cycles.

Even Milton Friedman—who never supported gold as money—admitted that a monetary system based on gold  would “take care of itself.” Instead, our money is created and manipulated by the politicized hand of government and is based on theft.

Modern economists attempt to define money by correlating it with economic activity. As Austrian economists know, money is defined by its function as a medium of exchange.

The Lane Kiffin saga has dominated sports headlines this past week, highlighting the sea changes that have come over college sports—an especially college football—in the past decade. Much of this change is being driven by the easy money regime of the Federal Reserve.

The Fed’s money printing creates bubbles everywhere. Now even college football is seeing its own easy-money fueled malinvestments.

By making paper money legal tender, the government shut the door on sound money. Repealing legal tender laws is the first step back to liberty.

While the Fed continues its “two percent” charade, the central bank has been inflating the US economy into ruin. The latest Fed capers will not end well.

While it wouldn’t solve everything, a gold audit would be a step towards sound money.

Dr. Hülsmann offers his concluding thoughts on his debate with Philipp Bagus regarding the monetary consequences of closing the central bank of Argentina.