Money and Banks

Popular opinion seems to be that falling prices—or even stable prices—are bad for the economy, but I’ve never seen any good arguments about why.

The recent de-peg of the Swiss franc from the euro illustrates the importance of currency competition, and the damage that state monopolies over money can do. We Americans should embrace currency competition here at home as well.

If given a choice, people will avoid paper money that is declining in value, thus putting a restraint on inflationary bank notes. To shield banks from this, they turned to a monopolist central bank that issues legal tender and helps private banks inflate.

The Swiss franc was pegged to the euro in 2011, but after years of easy money in the eurozone, the Swiss have bailed in an effort to save the franc from even more inflation that's expected from the Europen Central Bank.

The lesson is clear. If Switzerland can retake control of its money, so can any eurozone nation.

The homeownership rate is now back where it was forty years ago. So what did all that federally-subsidized homebuying over the past decade accomplish? There was a lot of malinvestment, and a lot of politically-favored interest groups that got richer.

The homeownership rate is now back where it was forty years ago.

Jeff Deist and Martin Armstrong discuss Armstrong's story—both as an economic forecaster and as a thorn in the side of federal prosecutors.

The Fed would have us believe that it has am impressive record of success in preventing recessions and improving the economy. The actual historical record suggests otherwise.

Zimbabwe, in the aftermath of years of hyperinflation, today has nine different currencies that are officially legal tender. The emerging system of multiple currencies offers a chance to make some interesting observations.