U.S. Economy

One of the biggest and most pervasive myths in modern-day economics is the myth of the omnipotence of the Federal Reserve.

Advocates of unbacked paper money claim that theirs is the “civilized” choice, as opposed to gold, or what Keynes called “that barbarous relic.” These inflationists, however, are the ones wrecking civilization as we have known it.

Data on employed persons, wages, and other measures point to trouble ahead in an economy already strained by growing bankruptcies, mounting debts, and disappearing savings. 

The new problem we now face arises from the fact that huge deficits are only manageable so long as interest rates remain very, very low. 

Because borrowing from the Fed continues to reach new highs, inflation is unlikely to drop as fast as M2 would indicate, and excess money growth continues to generate problems in the economy with few improvements as it just keeps zombie financial entities alive.

Mark looks at the implications of famed investor Jim Chanos shutting down his hedge fund which specialized in shorting stocks.

America is draining its economy by federal debt in a way similar to how American farms and cities are emptying the nation's aquifers. We cannot sustain these losses much longer.

As the federal government continues its Ponzi scheme of issuing debt to pay for past debts, interest rates will increase to the point where this no longer is a tenable strategy—if it ever was.

Mark reports on Pimco's former financial guru Mohamed El-Erian's new views on the Federal Reserve.

On this episode of Radio Rothbard, Ryan and Tho are joined by Peter St. Onge, an economic fellow with the Heritage Foundation and frequent Mises Wire author.