Money and Banks

The Chinese debt is overwhelming not simply because of the volume, but because the figure has quadrupled in seven years.

While government spending re-allocates and distorts resources, it is not necessarily inflationary. Inflation really just stems from money creation and fractional-reserve lending carryied out by central banks and private banks — thus creating money "out of thin air."

Since we don't know the future, all investment is a type of speculation, and this doesn't mean banks are behaving nefariously when investing other people's money.

Keynesian economics is the economics of debt-addicted, lower-class spendthrifts: modern governments.

As flaws in the system of fractional-reserve free banking began to appear, private central bank-like institutions known as clearinghouses sprang up, and they helped pave the way for the Fed.

Like taxation, government spending diverts resources from real wealth-generating ventures. Borrowed funds for continued spending must also be repaid, so current spending translates to future taxation.

Among the fallacies Mises debunked in his first book were those of the chartalists - the predecessors of Modern Monetary Theory.

Regardless of expectations, tampering with the economy by means of monetary policies will always undermine the foundations of the real economy.

One of the easiest ways of asserting control over the private sector is to manage the money supply with a central bank. Naturally, Marx was rather fond of the idea.

Italy’s problems are yet to descend into a Greek-style crisis, but that is the direction of travel. And Italy is far more serious than Greece because of its sheer size.