Money and Banks

The Central Bank of Canada Warns of Housing Bubble

If cryptocurrencies like bitcoin are being used as money, and if Carl Menger correctly tells us that money must have some kind of antecedent value, then as economists it becomes our job to discover what exactly is that antecedent value. A fresh reading of Menger's Regression Theorem provides several insights.

Ludwig von Mises understood that the unpopularity of taxes tended to limit the extent that governments could spend. But, if governments are freed from needing to raise taxes for revenue, as central banks allow them to do, they are unleashed.

The US dollar’s days as a global reserve currency are numbered, but there is no high-quality replacement available. If there were an ideal reserve currency for the world, this is what it would look like.

Fed management of the economy and the business cycle has only gotten much worse as it has grown more powerful and destructive. As the Federal Reserve has become more powerful, job losses have generally more severe and the duration of the recovery process has gotten progressively longer.

Many economists still believe that wealth can be created by simply convincing people to buy more stuff through loose monetary policy. What is really needed, though, is wealth creation, and then there is never a shortage of demand. 

Interest rates are like prices, and the state should not regulate interest rates any more than it should regulate the price of soda. Regulation will lead to overuse of resources, shortages, and distorted markets.

The Economist recently opined that interest rates don’t affect investment.

The  Swiss gold initiative has failed, and although it was portrayed as a very radical bill by supporters of fiat money, it was a very mild effort that would not have done much to limit the Swiss central bank.