All Posts Tagged With: "speculation"

Alchemists of Loss: How Modern Finance and Government Intervention Crashed the Financial System

The subprime crisis and financial meltdown have spawned dozens of books, some aimed at re-enshrining John Maynard Keynes, others at laying him to rest once more; some aimed at praising the Federal Reserve for staving off another Great Depression, others at blaming it for treating the economy to another cyclical episode. In Kevin Dowd and [...]

26Oct2011 | Roger W. Garrison | 0 comments | Continued

Oil Prices Are Rigged? It Just Ain’t So!

In reality, all prices are determined by supply and demand, properly defined. Outside investors with lots of money can certainly influence prices, but there are always risks. Funds that had large “long” bets on commodities took a bath as oil fell from its July 2008 high of $145 down to well below $50 a few months later. Futures markets allow producers and consumers to hedge against needless risk by locking in prices, and they allow speculators with superior foresight to improve the allocation of resources over time. Our Time authors think they’ve shown that the oil market is rigged, but it just ain’t so!

21May2009 | Robert P. Murphy | 2 comments | Continued

Poker and the Free Market

Good poker players are like entrepreneurs: You need greater skill than average to anticipate the future. As Mises so cogently puts it in Human Action, “What distinguishes the successful entrepreneur and promoter from other people is precisely the fact that he does not let himself be guided by what was and is, but arranges his affairs on the ground of his opinion about the future. He sees the past and the present as other people do; but he judges the future in a different way.”

20Jan2009 | Robert Stewart | 2 comments | Continued

The Recurring Crisis

Recently the governor of the Bank of England announced that the “nice” times had come to an end. (In the Bank’s lexicon, NICE = “Non-Inflationary Constant Expansion”). This news will not come as any shock to the many Americans who have had their homes repossessed recently, but it does appear to have startled many of [...]

1Jul2008 | Stephen Davies | 0 comments | Continued

Business Under German Inflation

Paper money inflation and credit expansion never fall upon a people like an act of God. They are always the outcome of a deliberate policy. The governments and the parties in power take recourse to inflation because they consider it as a blessing or at least a minor evil when compared with the effects either [...]

1Nov2003 | Ludwig von Mises | 0 comments | Continued

Speculation and Risk

Last month I showed that speculators are best thought of as conservationists. They are constantly looking to the future and conserving resources they believe are becoming more valuable. Since no one can predict the future with full confidence, speculators necessarily take risks. And when a speculator misjudges the future, he moves resources from periods when [...]

1Sep1999 | Dwight R. Lee | 4 comments | Continued

Conservation and Speculation

I often ask my students, “How many of you are in favor of conservation?” Except for those who are asleep, every hand goes up. I then ask, “How many of you are in favor of speculators?” and almost no one raises his hand. The students see conservation as a noble activity that prevents people from [...]

1Aug1999 | Dwight R. Lee | 0 comments | Continued

Asia Needs Capital Controls?

Citing the East Asian financial crisis, the well-known trade economist Jagdish Bhagwati has recently given support to retaining capital controls in developing countries. In essays in Foreign Affairs and more recently, the Wall Street Journal (“Yes to Free Trade, Maybe to Capital Controls”), Bhagwati cautions that the “overwhelmingly powerful” case for free trade does not [...]

1Mar1999 | Lawrence H. White | 0 comments | Continued

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