Paul Krugman can’t figure out why everybody is so bummed about the economy. From his perspective, we should all be jumping for joy, praising Joe Biden, and publicly signing fifty-year commitments to vote Democrat. Official statistics show that “unemployment is still near a 50-year low, yet inflation has been falling fast.” But the ignorant masses simply won’t get with the picture. Krugman admits “surveys of consumer sentiment and political polls continue to show that Americans have a very negative view of the Biden economy.”
He concludes that it is partisanship and media bias driving a wedge between consumer sentiment and economic reality. He found a study that shows that 30 percent of the disparity can be explained by Republicans who are doing fine economically

As war rages in the Middle East, we are reminded of what Mises wrote in 1949 on warfare and its awful effects.
Original Article: Mises on the History of Warfare

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Recorded at the Mises Circle in Fort Myers, Florida, 4 November 2023. Includes audience question and answer period. 
Special thanks to Murray and Florence M. Sabrin for making this event possible.

The Radical Uncertainty of a Polymorphic Fed | Jonathan Newman

Video of The Radical Uncertainty of a Polymorphic Fed | Jonathan Newman

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“The market economy involves peaceful cooperation. It bursts asunder when the citizens turn into warriors and, instead of exchanging commodities and services, fight one another.”
So Ludwig von Mises begins a short chapter in Human Action called “The Economics of War.”
While brief, the eleven pages (pages 817–28 in the scholar’s edition) are densely packed with Mises’s take on the history of warfare, what leads to total war, how wars are won, the costs of war, and the ideological conditions for war and peace. As is his modus operandi, Mises frequently contrasts war with the peaceful cooperation of the international division of labor.
The History of Warfare
In his short history of warfare, Mises describes the wars of primitive times as total wars, in which both

When Silicon Valley Bank and other banks failed earlier this year, the debate over the sustainability of fractional reserve banking resurfaced. Under fractional reserve banking, banks keep only a fraction of customers’ deposits in reserve. The difference is bank credit, such as government debt, mortgages, business loans, and many other kinds of loans. This practice leaves the bank open to a run, in which panicky depositors attempt to withdraw their funds from the bank en masse but the bank doesn’t have the cash on hand. The following FRED graph gives an idea of the extent of the mismatch between deposits and reserves.
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But we shouldn’t worry about bank runs because the government is here to help. In the US, the Federal Deposit Insurance

Recorded in Nashville, Tennessee, on September 23, 2023.

Limitless Money and the Limitless Fed | Jonathan Newman

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Many people believe that the board game Monopoly, developed during the Great Depression, mimics a real-world capitalist economy. Monopoly is a game, not real life.
Original Article: "Is the Monopoly Board Game Like Real Markets?"

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U.S. presidential candidate Vivek Ramaswamy took aim at the Federal Reserve recently:
The reality is, if the dollar is volatile, it’s as bad as if the number of minutes in an hour fluctuated. None of us would be here at the same time. […] When the number of dollars [in relation] to a unit of gold or an agricultural commodity is wildly fluctuating, money doesn’t go to the right projects. It’s just wild—it doesn’t make any sense. That’s been an impediment to economic growth…
So, what we need to do as the next-step—of course I’d like to end it [the Fed]—is at least get rid of the dual mandate. We’re done managing inflation and unemployment. It’s like trying to hit two targets with one arrow, dramatically missing on both. And restore a single mandate: stabilize the US

While the government promotes CBDCs as tools for "inclusion," it is more likely that they will be another vehicle for federal intrusion.

Original Article: "CBDCs: The Ultimate Tool of Financial Intrusion"

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Government statistics on inflation in the food sector have failed to account for skimpflation and shrinkflation.

Original Article: "Shrinkflation and Skimpflation Are Eating Our Lunch"

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Why have central banks settled on a 2 percent price inflation target? Project Syndicate asked four economists about this target and whether it is still appropriate. I’ll summarize their answers and then consider Mises’s position on “stabilization policy.”
Four Economists’ Answers to “Is 2 Percent Really the Right Inflation Target for Central Banks?”
Michael Boskin, Stanford University professor, Hoover Institution senior fellow, and former chair of the Council of Economic Advisers to George H.W. Bush, concludes that 2 percent is probably about right, mainly due to the negative consequences of a higher target. He considers whether a higher target could be maintained in a stable way as it comes with more variations in the returns to capital, less credibility

Recorded in Birmingham, Alabama on April 22, 2023.
From the Mises Institute’s recent event in Birmingham, Alabama dedicated to the global threat of "The Great Reset".

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Suppose an addict had the ability to magically create, ex nihilo, his own stimulating drug, as fractional reserve banks can do with money and credit. Would you expect moderation?

Original Article: "Why Fractional Reserve Banking Is behind Bank Failures"
This Audio Mises Wire is generously sponsored by Christopher Condon. 

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Drug addicts suffer major withdrawal symptoms when they go cold turkey. In the case of high-tech startups and their banks (like Silicon Valley Bank), the super-low-interest-rate stimulant has been taken away by the drug dealer (the Fed) via interest rate hikes. With cheap credit drying up, firms switched to pulling cash out of SVB, all while the same interest rate increases caused the value of SVB’s assets to fall. SVB’s balance sheet couldn’t handle the fast withdrawals, which became a classic, self-propagating, panicky bank run, and the simultaneous fall in value of its liquid assets.
When banks practice this kind of maturity mismatch—potentially immediate-term liabilities (deposits) backed by long-term assets (loans and Treasury securities), it is called

“Every change in the money relation alters … the conditions of the individual members of society. Some become richer, some poorer.” – Mises, Human Action, p. 414.
New money enters the economy at a particular point. It does not enter in the form of a proportional and simultaneous increase in everybody’s incomes. This means that there are uneven effects of monetary expansion, including exacerbated income and wealth inequality. When we trace the consequences of monetary expansion, we notice that it creates winners and losers as resources are shifted toward the first receivers and spenders of new money.
This idea is an old one. It goes back to Richard Cantillon, who in the mid-eighteenth century outlined the step-by-step process that new money works its way into an