It has been interesting to read reactions to the recent speech ( Deflation: Making Sure “It” Doesn’t Happen Here ) given by Fed Governor Ben S. Bernanke before the National Economists Club in Washington, D.C., on November 21, 2002. Most commentators have focused, with merit, on Bernanke’s alarmingly sanguine approach to monetary inflation as a
[Book Review: Ethics of Money Production . By Jörg Guido Hülsmann. Ludwig von Mises Institute (2008). 280 pages.] Not long ago, the lecture topic in my undergraduate course on corporate finance was ratio analysis. We were using the financial statements of a publicly traded company that day, so I began the class by demonstrating how students
With JP Morgan’s acquisition of Bank One, America can claim to be the home of two banks with assets in excess of $1 trillion each (the other being Citigroup). On a list traditionally dominated by foreign banks, US banks will now claim two of the top three spots. The US banking system is also becoming more concentrated, according to Minneapolis Fed
Athanasios Orphanides’ recent Fed paper touches on aspects of Japan’s extended economic slump (his basic thesis: the BOJ should have done more). This paper served as a reminder of the inadequacies and limitations of mainstream analysis in explaining Japan’s long economic winter. Fortunately, though long unrecognized and unappreciated by the
For the enemies of freedom in general , and of the economy in particular, the recent crash has been the occasion to re-assert that markets in general, and financial ones in particular, are inherently unstable — and thus dangerous — because they are driven by irrational behaviors such as the “mimetic effect,” which, according to many experts and
What constitutes stable money? Most people today would likely say that money is stable if the price level of a given basket of consumer goods and services remains constant over time, or at least rises no more than around 2% on an annual basis. Such an interpretation would echo what central banks — today’s monopoly suppliers of government paper
For governments in general and the US government in particular, Ludwig von Mises had a policy recommendation: do not increase the stock of money any further. He made this point in “Monetary Reconstruction” (written in 1952 and published in 1953): “The first step must be a radical and unconditional abandonment of any further inflation. The total
Preventing the Free Market from Doing Its Job Economically speaking, the so-called credit market crisis is, first and foremost, a reallocation of property rights . Overstretched borrowers default on their obligations. Lenders, who have made unwise credit decisions, run up losses if they fail to collect interest and principal payments on credit
[An MP3 audio version of this article, read by Floy Lilley, is available for free download .] In the postwar hyperinflation, banknotes were so worthless that they were discarded like trash. (Hungary 1946) Increasing “Excess Reserves” The demise of fiat-money regimes around the world has become unmistakable. They can only be kept alive by central
[An MP3 audio version of this article, read by Floy Lilley, is available as a free download .] In an attempt to fight the international credit market turmoil and its effects on economic activity and overall prices, the US Federal Reserve (Fed) keeps increasing the supply of base money — which is cash in circulation and commercial banks’ money
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The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.