All Posts Tagged With: "interest rates"
Destroying Value
In Cleveland and other American cities homes are being demolished because five years after the housing bust there is nothing better to do with them. Therein lies a lesson in Austrian business cycle theory. In a world of uncertainty, waste—the destruction of value—is inevitable. Human action, which aims to replace inferior circumstances with superior circumstances, [...]
4Jan2012 | Sheldon Richman | 2 comments | ContinuedQuantitative Easing Forever?
Despite assertions that it has ended its policy of quantitative easing (QE), the Fed is unlikely to be able to do so until it also ends its zero-interest-rate policy (ZIRP). This deadly policy duo has had terrible consequences for the American economy and every country using U.S. dollars. It is as though the Fed were [...]
26Oct2011 | Christopher Lingle | 1 comment | ContinuedContradicting Keynes: Bernanke’s Debt Default Scare
Federal Reserve Chairman Ben Bernanke’s remarks last summer about the debt limit and risk of default amounted to a stunning contradiction of Keynes and Keynesian economics. But few seem to have noticed. In response to questions by U.S. Senator Jack Reed (D-RI), Bernanke joined in the chorus of those predicting skyrocketing interest rates in the [...]
21Sep2011 | James C. W. Ahiakpor | 1 comment | ContinuedA Simple Solution
There is always an easy solution to every human problem – neat, plausible, and wrong. —H. L. Mencken I have devised a simple plan for improving Americans’ health by drastically reducing everyone’s weight, thereby significantly increasing longevity and reducing medical costs. All we need to do is revalue the pound. Instead of a pound being [...]
24Aug2011 | Richard W. Fulmer | 1 comment | ContinuedWhat’s Up with Inflation?
Inflation as measured by the Consumer Price Index (CPI) has been almost nonexistent for several years, though it started creeping higher in the first half of 2011. Yet many prices have been rising at double-digit percentage rates. Are official figures trustworthy? And what of expectations? There is a great deal of buzz right now about inflation [...]
22Jun2011 | Warren C. Gibson | 14 comments | ContinuedQuantitative Uneasiness
In their recent paper, “Has the Fed Been a Failure?,” George A. Selgin, William D. Lastrapes, and Lawrence H. White conclude that over nearly 100 years the Federal Reserve’s performance has been mostly awful. Unfortunately, the Fed is currently engaged in a policy that will likely make a nice addition to their article. This policy, [...]
21Apr2011 | Ivan Pongracic Jr. | 36 comments | ContinuedA Simple Solution
By overriding market money prices we deny ourselves important data about the country’s fiscal health.
11Apr2011 | Richard W. Fulmer | 3 comments | ContinuedCentral Banking Beats Free Banking?
In “More Bits on Whether We Need a Fed,” a November 21 Marginal Revolution blog post, George Mason University economics professor Tyler Cowen questions “why free banking would offer an advantage over post-WWII central banking (combined with FDIC and paper money).” He adds, “That’s long been the weak spot of the anti-Fed case.” Free banking [...]
23Mar2011 | Fred E. Foldvary | 3 comments | ContinuedAnd the Slump Goes On
Official economic statistics and the underlying economic reality sometimes differ starkly. Such discrepancies may be almost inevitable when a small group of macroeconomic experts sets the official dates for peaks and troughs of aggregate economic activity. The Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) recently “determined that a trough in [...]
24Feb2011 | Angel Martín Oro | 13 comments | ContinuedGetting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis and The Housing Boom and Bust
These two books are must-reads for anyone wanting to have a working understanding of the economic and financial crisis. They complement each other and together form a civics lesson for an informed electorate. Economists are prone to write turgid prose and employ a jargon-filled style. Not these two gems. Each author is a deservedly well-regarded [...]
22Sep2010 | Gerald P. O'Driscoll, Jr. | 2 comments | ContinuedFinancial Fiasco: How America’s Infatuation with Homeownership and Easy Money Created the Economic Crisis
Free-market greed stands accused of undermining the world financial system, but that is a mistaken analysis, writes Johan Norberg. The Swedish author made famous by his book In Defence of Global Capitalism is back to provide an explanation for the current financial crisis. Many factors led to the global financial fiasco, Norberg writes, including a [...]
20May2010 | Waldemar Ingdahl | 20 comments | ContinuedComparing the Great Depression to the Great Recession
President Obama has often remarked that the Great Recession (2008–10) is the greatest economic crisis since the Great Depression. It’s interesting to study the many parallels between the Great Recession and the Great Depression. Causation. The main causes of both crises lie in actions of the federal government. In the case of the Great Depression, [...]
20May2010 | Burton W. Folsom Jr. | 47 comments | ContinuedEnd the Fed
Of all the blunders in American history, perhaps the greatest was the decision to put control of money and banking in the hands of a cabal of big bankers operating under the highfalutin title “Federal Reserve System.” Unfortunately, few among us know anything about the Fed, much less have any inkling of how badly it [...]
24Mar2010 | George C. Leef | 3 comments | ContinuedFederal Reserve to Leave Interest Rates Near Zero
“The Federal Reserve said Wednesday that it will shut down some of the emergency triage measures it put in place at the height of the financial crisis but will leave interest rates near zero out of continuing concern about the weak U.S. economy.” Never underestimate government’s willingness to delay the inevitable. FEE Timely Classic: “Economics [...]
17Dec2009 | Mike Van Winkle | 0 comments | ContinuedSaving Is Killing the Economy?
In the midst of the current recession, many of the oldest fallacies in economics are making a comeback. In a column titled “Why Saving is Killing the Economy,” senior writer Chris Isidore repeats one of the oldest: that the key to economic recovery or growth is consumption and that saving retards that process. Isidore states [...]
19Aug2009 | Steven Horwitz | 6 comments | ContinuedGovernment Sets Us Up for the Next Bust
If an athlete injures himself and suffers great pain, we recognize the shortsightedness of giving him painkillers to keep him going. The pain might be masked, but at the risk of greater injury later. That’s a good analogy for the inflationary policies now pursued by Washington. These policies may temporarily “stimulate the economy,” but they [...]
2Mar2009 | John Stossel | 32 comments | ContinuedGreenspan Should Be Shocked by Risky Lending?
Toward the end of his tenure as Fed chairman in early 2006, Alan Greenspan was the object of praise edging at times into adulation. It came from some unlikely sources. Milton Friedman penned an encomium for Greenspan in the pages of the Wall Street Journal titled, “The Greenspan Story: He Has Set a Standard.” After [...]
2Mar2009 | Gerald P. O'Driscoll, Jr. | 0 comments | Continued-
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