Money and Banks

Last year, Powell was full of confidence. Now what we have from the Fed and FOMC are increasingly vague statements about "soft landings" and inflation. 

While much attention has been directed toward Ben Bernanke's Nobel, the banking theories of Nobel winners Douglas Diamond and Philip Dybvig also need a second look.

Why is an inversion of the yield curve is indicative of a recession? It stems in part from the fact that both recessions and yield curve inversion follow sizable slowing in monetary inflation. 

Insurance protects individuals from events that cannot be foreseen. As Murray Rothbard noted, however, deposit insurance exists to "protect" a system that is inherently bankrupt.

While we speak of a desire for honest money, the larger problem is that the Federal Reserve System cannot coexist with an honest money regime.

The only lesson for the United Kingdom is to remember that if you follow Greece’s economic policies, you get Greek debt, unemployment, and growth.

The control of money is extremely convenient to governments, especially to have their own central bank to buy their debt when they are out of money.

We can't count on the Fed regulating itself or that some especially hawkish chairman will appear to save us from the worst excesses of fiat money.

Insurance protects individuals from events that cannot be foreseen. As Murray Rothbard noted, however, deposit insurance exists to "protect" a system that is inherently bankrupt.

What happens when banks lend money? It depends on the lending process itself. If lending comes about because of an expansion of credit, then it creates problems.