Five months into the second round of quantitative easing — “ QE2 “ — it is useful to take stock of what it has, and has not, accomplished. In short, the monetary base is way, way up, price inflation is up, long-term interest rates are up, and bank lending is down . QE2 has thus begun to deliver on all the dangers of which the critics warned, but
As Ron Paul’s “End the Fed” movement grows, more and more Fed economists are speaking up on behalf of the central bank. In a recent post , David Andolfatto of the St. Louis Fed argues that the systematic debasement of the currency has had a negligible effect on the average American. As we’ll see, Andolfatto’s evidence is completely irrelevant to
On Monday, Standard and Poor’s (S&P) announced that although the US government would retain its AAA debt rating, the outlook for the United States’ future was being downgraded from “stable” to “negative.” The move is a welcome if tepid acknowledgement of the fiscal train wreck of which Austrians have been warning for years. The S&P Announcement
The big financial news this week was the Federal Reserve’s first press conference. The financial press and bloggers have already parsed Bernanke’s every last syllable, but I’ll make some observations that I haven’t seen elsewhere. Why Do We Care What “The Bernank” Has to Say? At one level, it’s absurd that the entire world is hanging on the words
Politicians often try to empathize with struggling Americans by promising to cut government spending, “just like regular households in tough times.” This simile evokes different reactions depending on one’s economic views. Keynesians think it’s reckless, proponents of Modern Monetary Theory (MMT) think it’s absurd, and Rothbardians think it’s
Last week I testified before a Congressional subcommittee on the Fed’s role in rising gasoline prices. All of the economists on the panel agreed that oil prices were rising (partly) because of the dollar’s fall against other currencies. However, Dean Baker — prominent Keynesian pundit and codirector of the Center for Economic and Policy Research —
Now that the “crisis” over the federal debt ceiling has been averted, we can leisurely explore two of the wackier proposals that emerged during the state of panic. Not surprisingly, the schemes involved the Federal Reserve and its ability to circumvent, not just standard accounting, but also the traditional divisions of political power. It’s worth
Investors the world over are still reeling from last Thursday’s massive plunge in the US equity markets, in which the major indices all gave up more than 4 percent. It was the worst day for the US stock market since December 2008. None of this should surprise those conversant with Austrian economics. The “fundamentals” of the economy have been and
Ever since Ben Bernanke began his massive infusions of money into the financial system, many analysts ( including me ) have been worried about the severe weakening of the dollar if and when the fractional-reserve-banking system magnified the initial injections severalfold. Although the trend could reverse, data from the past two months suggest
Last week the Fed announced “Operation Twist,” in which the central bank will buy $400 billion of longer-dated Treasury securities while selling the same amount of shorter-dated Treasuries. This episode epitomizes everything that is wrong with the modern, statist view of money. The Goofy Name Just the fact that it’s an “operation” is disturbing.
What is the Mises Institute?
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.