Money and Banks

It was government policies that kick-started the engine of financial innovation, wrongly blamed by many in the press and left-leaning academia for this increased economic instability.

Years of bubbles and malinvestment have a downside: the destruction of the productive, wealth-building parts of the economy. And that could mean higher interest rates.

The velocity of money does not have a life of its own. It is not an independent variable and it cannot cause anything, let alone offset the effect of increases in money supply on the prices of goods.

Policy normalization—defined as closing down the nonconventional toolbox and restoring a well-functioning price-signaling mechanism to the bond market—is difficult but possible.

We wrap up our look at Murray Rothbard's sprawling two volume An Austrian Perspective on the History of Economic Thought with Dr. Joe Salerno, Rothbard's friend and colleague. 

It is not possible to replace productive credit by means of the easy monetary policies of the central bank. If this could have been done, then the world would have already ended poverty. 

It was government policies that kick-started the engine of financial innovation, wrongly blamed by many in the press and left-leaning academia for this increased economic instability.

Why do individuals desire to have money, which cannot be consumed and produces nothing? To provide an answer to this one must go back in time to establish how money emerged.

Years of bubbles and malinvestment have a downside: the destruction of the productive, wealth-building parts of the economy. And that could mean higher interest rates.

Deficit spending—which begets inflationary monetary policy—has been a boon for the financial sector and its billionaires. Naturally, bank CEOs would love to get rid of the debt ceiling.