Georges Bush’s recent speech in defense of his bailout plan was quite a tour de force . Indeed, it managed to explain the pending recession of the US economy by a previous situation of “easy credit” without mentioning the monstrously inflationist policy of the Federal Reserve — which reached its climax in 2003 and 2004, when it lent dollars at a
The Role of the Crisis The so-called “credit crisis” is gaining momentum. Investors increasingly question the solidity of the banking system, as evidenced by banks’ tumbling stock prices and rising funding costs. With bank credit supply expected to tighten, the profit outlook for the corporate sector, which has benefited greatly from “easy credit”
To Austrian economists, the so-called international credit market crisis is a prima facie case of the inherent destructive tendency of government-controlled paper money: it is the consequence of an excessive expansion of credit and money, which encourages uneconomic investment and leads to unsustainable debt burdens. The inflation-provoked cluster
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
Mainstream economists and so-called experts have filled the minds of most Americans with many economic myths that are constantly reinforced by the media and repeated on the streets. These myths are erroneous at best, sometimes based on half truths. The majority of them are just false. We read and hear them every day: “inflation” is caused by
[An audio version of this article, read by Ron Jennings, is available as a free MP3 download .] A debate has been raging for some time among those in the finance industry about whether the United States is currently experiencing inflation, deflation, stagflation, reflation, hyperinflation, or maybe even some other sort of “-flation” that only Dr.
Recent posts on the Becker-Posner blog consider possible silver linings to depressions. In particular, Richard Posner claims that there are positive aspects to depressions. At first glance, the idea that depressions have a good side might seem to entail the broken-window fallacy. It would therefore seem that Judge Posner has fallen into error.
Katsushika Hokusai “The Great Wave at Kanagawa” c.1829 The Federal Reserve Bank has now undertaken unprecedented measures intended to “stimulate the economy.” The federal funds rate is now set at 0.0 to 0.25%. This move by Federal Reserve Chairman Bernanke should be considered alarming for several reasons. First, this interest-rate reduction
It costs money to make money. This fact is not only true for businessmen, investors, and entrepreneurs, but also for the moneymakers themselves — the Department of the Treasury. To print bills or mint coins, the United States Mint and Bureau of Engraving and Printing must purchase all sorts of resources, including paper, ink, equipment, and
French assignat , 1795 First printed in 1896 and as unfortunately pertinent today as it was then, Dr. Andrew Dickson White’s Fiat Money Inflation in France chronicles the national suicide of an imposing empire that choked to death on one of mankind’s more foolish delusions — the stubborn belief that money does grow on trees. Dr. White’s style
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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.