Money and Banks

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Banks Create Money out of Thin Air. What Could Possibly Go Wrong?

Booms and BustsThe FedInflationMoney and BanksMoney and Banking

Blog06/22/2023

How can a bank “create money out of thin air”? We must enter the magical kingdom of “fractional-reserve banking,” where deposits are turned into loans, loans are turned into money, and so on, to find out.

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Powell Sends Mixed Messages as He Chickens Out on Rate Hikes

Money and Banks

Blog06/21/2023

What happens next will depend heavily on what the regime will feel is necessary to buoy public support for the regime and its current ruling party. 

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After the Debt Ceiling Deal: Look for Liquidity Problems in the Markets

The FedMonetary PolicyMoney and BanksU.S. Economy

Blog06/21/2023

As Washington cheers the so-called budget deal, the real problems loom. Liquidity issues are next.

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More Federal Debt Means More Taxes, Less Growth, and Weaker Real Wages

Money and BanksTaxes and Spending

Blog06/19/2023

2022 was a warning sign that debunked the myth of eternal monetization of debt with low inflation. It is time to be serious. High deficit spending is not a tool for growth, but a tool for cronyism and a burden on the future.

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Is the Banking Crisis Being Orchestrated?

Bureaucracy and RegulationEconomic PolicyThe FedMoney and BanksU.S. Economy

Blog06/17/2023

With each iteration of the banking crisis, the Federal Reserve System and federal regulators gain in power and authority. Maybe the banking crisis isn’t an accident.

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Sound Money Is Required for Real Budget Discipline

Big GovernmentThe FedInflationMoney and BanksPolitics

Blog06/15/2023

The usual suspects are "relieved" that Congress gave President Biden what he wanted on the so-called budget deal. Without sound money, however, the borrowing and spending regime will collapse sooner or later.

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Wall Street to the Fed: Inflation Is Over. Give Us More Easy Money!

Money and Banks

Blog06/14/2023

The problem here not that the central bank is "setting" the "wrong" interest rate. The problem is the Fed has long been relentlessly forcing down interest rates to satisfy various politically determined "needs."

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Is the US Banking Crisis Over? It Has Barely Begun

Booms and BustsThe FedMoney and BanksU.S. Economy

Blog06/02/2023

Fractional reserve banking by itself undermines both the banking system and the economy. No action by the Federal Reserve can eliminate the threats.

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As Interest Rates Rise, the Era of "Deficits Don't Matter" Is Over

Money and Banks

Blog05/27/2023

The world is changing, and in the coming five years we'll see how accelerating debt, declining demand for dollars, and rising price inflation will show how deficits do matter, after all. 

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Three Lies They're Telling You about the Debt Ceiling

Money and Banks

Blog05/23/2023

One: the Republicans want big cuts and austerity. Two: The US has never defaulted before. Three: Default is the end of the world. 

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