The “yield curve” refers to a graph showing the relationship between the maturity length of bonds—such as one month, three months, one year, five years, twenty years, etc.—plotted on the x axis, and the yield (or interest rate) plotted on the y axis.1 In the postwar era, a “normal” yield curve has been upward sloping, meaning that investors typically receive a higher rate of return if they are willing to put their funds into longer-dated bonds. A so-called inverted yield curve occurs when this typical relationship flips, and short-dated bonds have a higher rate of return than long-dated ones.

Investors and financial analysts are very interested in this phenomenon, because an inverted yield curve (defined in a particular way) has been a perfect leading indicator

Bob critiques the economic views of Yuval Harari, who predicts “useless people” because of technological advances. Bob then showcases similar thinking from right-wingers. He ends by addressing a common critique of the Christian God.

Mentioned in the Episode and Other Links of Interest:
Part 1, Part 2, Part 3, Part 4, and Part 5 of the BMS series on Klaus Schwab and the Great Reset
Bob’s book with Silas Barta on Understanding Bitcoin
Source for NWO compilation
Source for World Government Summit panel on blockchain
Source for Harari audio
Tim Pool episode featuring Michael Malice discussing NPCs (around 1:04:30)
Schwab’s books The Fourth Industrial Revolution and Covid-19 and the Great Reset
​For more information, see BobMurphyShow.com. The Bob Murphy Show is

In a recent episode of “The Problem With Jon Stewart,” the former Daily Show host asks former president of the Kansas City Fed Thomas Hoenig why the Fed couldn’t have bailed out homeowners, or just “quantitative ease” away the Treasury’s debt. Hoenig gives muddy answers, so Bob tries to clarify.

Mentioned in the Episode and Other Links of Interest:
Jon Stewart’s full interview with Thomas Hoenig
Jon Stewart skewers Paul Krugman
Jon Stewart interviews Kelton and Gray on MMT
Bob’s book Understanding Money Mechanics
​For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on Apple Podcasts, Google Podcasts, Stitcher, Spotify, and via RSS.

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The government’s latest report puts the twelve-month official consumer price inflation rate at 8.5 percent, the highest since December 1981:
As economists debate the causes of, and cure for, this price inflation, it’s worth recounting which schools of thought saw it coming. Although individuals can be nuanced, generally speaking the Austrians have been warning that the Fed’s reckless policies threaten the dollar. In contrast, as I will document in this article, two of the leaders of the Keynesian and market monetarist schools didn’t see this coming at all.

.
My Worst Professional Mistake
Before diving into it, I need to address a problem: my hands-down worst professional mistake occurred during the early years of the Fed’s “QE” (quantitative easing) programs,

Bob continues his series on Klaus Schwab and the Great Reset, highlighting an interesting remark in Biden’s SOTU, Strobe Talbott’s open support for global government, and the introduction to Schwab’s book on Covid-19 and the Great Reset.

Mentioned in the Episode and Other Links of Interest:
Part 1 and Part 2 of this series
The WEF’s bio for its founder, Klaus Schwab
Schwab’s books The Fourth Industrial Revolution and Covid-19 and the Great Reset
Bob’s first co-hosted Human Action podcast with Jeff Deist
Forbes’ article on Schwab the power broker
​For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on Apple Podcasts, Google Podcasts, Stitcher, Spotify, and via RSS.

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Bob continues his series on Klaus Schwab, explaining the WEF’s plans for redesigning the world, and providing quotes from Schwab’s book on the fourth industrial revolution.

Mentioned in the Episode and Other Links of Interest:
Part 1 of this series
The WEF’s bio for its founder, Klaus Schwab
Schwab’s books The Fourth Industrial Revolution and Covid-19 and the Great Reset
The WEF’s Global Redesign Summit and the Global Redesign Initiative
Nick Buxton’s article on Davos and the danger to democracy
Forbes’ article on Schwab the power broker
FEE article on the socialist roots of fascism
1983 article in Harper’s on the Bank of International Settlements (BIS)
​For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on Apple Podcasts, Google

Bob starts a series looking into Klaus Schwab, founder of the World Economic Forum and, along with Prince Charles, proponent of the “Great Reset.”

Mentioned in the Episode and Other Links of Interest:
Klaus Schwab and Prince Charles promoting the “Great Reset”
The World Economic Forum’s page on the Great Reset
An example of a session from the WEF’s Davos Agenda 2021 conference
The WEF’s bio for its founder, Klaus Schwab
Schwab’s books The Fourth Industrial Revolution and Covid-19 and the Great Reset
The video of Schwab explaining his connection to Kissinger
The “red pill” documentary Wake Up Call
Murphy’s new book from the Mises Institute, Understanding Money Mechanics
​For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on Apple

Bob reviews Mark Spitznagel’s latest book, Safe Haven: Investing for Financial Storms, on which he was a consultant. Bob explains that Spitznagel rejects the alleged dichotomy between risk and return, and then gives a numerical example to illustrate the two schools of thought.

Mentioned in the Episode and Other Links of Interest:
Bob’s appearance on Jordan Peterson‘s podcast
Bob’s surprisingly high ranking among influential economists
His episode with Winston Ewert (who helped design the AI that produced the ranking)
Mark Spitznagel’s new book Safe Haven: Investing for Financial Storms and his previous book, The Dao of Capital
​For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on Apple Podcasts, Google Podcasts, Stitcher,

Bob reviews Mark Spitznagel’s latest book, Safe Haven: Investing for Financial Storms, on which he was a consultant. Bob explains that Spitznagel rejects the alleged dichotomy between risk and return, and then gives a numerical example to illustrate the two schools of thought.

Mentioned in the Episode and Other Links of Interest:
Bob’s appearance on Jordan Peterson‘s podcast
Bob’s surprisingly high ranking among influential economists
His episode with Winston Ewert (who helped design the AI that produced the ranking)
Mark Spitznagel’s new book Safe Haven: Investing for Financial Storms and his previous book, The Dao of Capital
​For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on Apple Podcasts, Google Podcasts, Stitcher,

Bob unveils a new recurring series, in which he gives the context of infamous quotations. In this episode, he covers two allegedly shocking quotes from John Lennon, John Maynard Keynes’ “in the long run we’re all dead,” Trump on Nazis being very fine people, Dan Quayle misspelling potato, Obama’s “you didn’t build that,” and Bohm-Bawerk on Karl Marx.

Mentioned in the Episode and Other Links of Interest:
Wikipedia entry on John Lennon’s “more popular than Jesus” comment. Lyrics to “Revolution.”
Bob and the Music City Friends of Liberty cover “Come Together.”
Video for Trump’s “very fine people” remark. Video of Obama’s “you didn’t build that.”
Nancy Pelosi on “We have to pass the bill to find out what’s in it.”
Bohm-Bawerk’s Karl Marx and the Close of His

[This article is part of the Understanding Money Mechanics series, by Robert P. Murphy. The series will be published as a book in 2021.]
In chapter 7 we summarized some of the major changes in how central banks have operated since the 2008 financial crisis. In the present chapter, we detail some of the even more recent changes in Federal Reserve operations since the onset of the coronavirus panic in March 2020.

Size of the Fed’s Balance Sheet
The most obvious change in Fed policy has been the dramatic expansion of its balance sheet since March 2020.
As figure 1 indicates, the explosion in Fed asset purchases since March 2020 dwarfs even the three rounds of QE (quantitative easing) following the 2008 financial crisis. Indeed, from March 4, 2020, through March 3,

Since the deep freeze in February caused millions of Texas homes to lose their power, partisans have been fighting over the blame. The governor blamed wind turbines and the green agenda, whereas Paul Krugman said the fault was with natural gas. Bob shows the numbers; natural gas was to blame only in the sense that nobody expected wind to be useful during a winter crisis.

Mentioned in the Episode and Other Links of Interest:
Bob’s article at Mises.org, which gives links to all the relevant sources
The Foundations of IBC
​For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on Apple Podcasts, Stitcher, Spotify, and via RSS.

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Weekly SNB Sight

Bob discusses three separate items all related to nonviolence: (1) Gene Sharp’s work, (2) Bob’s old dream of how to topple a tyrant, and (3) the winners of the Louis CK contest.

Mentioned in the Episode and Other Links of Interest:
Gene Sharp’s book, From Dictatorship to Democracy
The trailer for the documentary “How to Start a Revolution”
Sharp’s list of 198 methods of nonviolent action
The original Louis CK clip that inspired Bob’s contest
For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on Apple Podcasts, Stitcher, Spotify, and via RSS.

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Weekly SNB Sight Deposits and Speculative Positions: SNB selling euros and dollars
2021-03-08

Bob unveils a new series in which he explains and then evaluates apparent contradictions in the way free-market libertarians handle certain issues.

Mentioned in the Episode and Other Links of Interest:
Bastiat’s “Petition of the Candlemakers”
Bob’s article on price gouging
For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.

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Dusty Wunderlich on FinTech Financing: Entrepreneurs Helping Entrepreneurs
Key Takeaways and Actionable Insights. Consider these findings from a 2017 report from the G20 Global Partnership For Financial Inclusion, titled Alternative Data: Transforming SME Finance.

Police

Bob offers his commentary on the movies “The Hunt” and “The Purge”—both produced by Blumhouse Productions—and focuses on whether The Purge storyline offers a challenge to Rothbard’s depiction of anarcho-capitalism.

For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.

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The “Old” vs. the “New” Liberalism
It is not disputed that the popular meaning of liberal has changed drastically over time. It is a well-known story how, around 1900, in English-speaking countries and elsewhere, the term was captured by writers who were essentially social democrats.

A Rothbardian Analysis of the Constitutional

[This selection is adapted from “The Labor Theory of Value: A Critique of Carson’s Studies in Mutualist Political Economy,” Journal of Libertarian Studies 20, no. 1 (2006). Please see original for full references and footnotes.]
Before proceeding, we should be clear on what an economic theory of value is supposed to do: its task is simply to explain the exchange value of particular goods and services. That is, an economic theory of value must explain why someone selling good X can receive x berries in exchange for it, whereas someone selling good Y will only find someone willing to give up y berries in exchange for his good (where y< x).
In the context of a money economy, of course, an economic theory of value must explain the money prices of various goods and

Bob reads from an article recently tweeted out by the NEA, which calls for an end to schooling as we know it in order to promote anti-racism. He then discusses what the Fed has been up to since the coronavirus panic began.

Mentioned in the Episode and Other Links of Interest:
The YouTube version of this episode (with lots of visuals).
Karlyn Borysenko’s YouTube episode on the NEA tweet.
Jamilah Pitts’ article on school transformation.
Fed article talking about dividend payments to member banks.
Total assets of the Federal Reserve System.
For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.

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The “Old” vs. the “New”

The most famous Austrian economist is 1974 Nobel laureate Friedrich Hayek. Because of his moderate views excusing state interventions in various circumstances, hardcore Rothbardians tend to regard Hayek as less than pure in many areas.
However, one area where Hayek is certainly more radical (though perhaps not correct!) than even Murray Rothbard is monetary institutions, as detailed in his fascinating (1978) pamphlet The Denationalisation of Money.
When it comes to the free market’s handling of money, the typical Austrian argument is over fractional reserve banking (FRB). Some think FRB is perfectly legitimate (so long as the banks do not receive special privileges from the government), while others consider it inherently fraudulent. But both groups agree that

The good news is that Stephanie Kelton has written a book on MMT that is very readable and will strike many readers as persuasive and clever. The bad news is that Stephanie Kelton has written a book on MMT that is very readable and will strike many readers as persuasive and clever.

Narrated by the author.
Original Article: “A Review of Stephanie Kelton’s The Deficit Myth“.

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Some Conservatives Want Americans to Abandon Classical Liberalism. Don’t Listen to Them.
Donald Trump’s economic populism, and his break with the established post-war conservative movement, has created an opening for new types of conservatism. Among these is the anti-market wing of the movement characterized by a

[Review of Stephanie Kelton, The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy (New York: PublicAffairs, 2020).]
I’ve got good news and bad news. The good news is that Stephanie Kelton—economics professor at Stony Brook and advisor to the 2016 Bernie Sanders campaign—has written a book on modern monetary theory (MMT) that is very readable and will strike many readers as persuasive and clever. The bad news is that Stephanie Kelton has written a book on MMT that is very readable and will strike many readers as persuasive and clever.
To illustrate the flavor of the book, we can review Kelton’s reminiscences of serving as chief economist for the Democratic staff on the US Senate Budget Committee. When she was first selected, journalists

[This article is part of the Understanding Money Mechanics series, by Robert P. Murphy. The series will be published as a book in late 2020.]
In chapter 8 we presented Ludwig von Mises’s explanation of how bank credit expansion causes the boom-bust cycle, what is now known as Austrian business cycle theory. However, the reigning view today in both academia and the popular media is the Keynesian explanation, derived from John Maynard Keynes’s famous 1936 book The General Theory.
In contrast to the Austrians, Keynes viewed depressions as something that could naturally plague market economies when total spending (“aggregate demand”) was insufficient to support full employment. Keynes argued that markets didn’t possess a self-correcting mechanism and that left to

Editor’s Note: We keep hearing from the Fed’s defenders that the current spate of new stimulus and bailouts from the central bank are really not a big deal and are all very prudent and moderate. I asked Senior Fellow Bob Murphy to provide some much needed perspective.
Ryan McMaken: We’re in a very odd situation right now in terms of evaluating the state of the economy. We can see that there is rising unemployment, and there is likely to be a wave of missed mortgage and rent payments. Is this all just due to the government-mandated “shutdowns” or are there deeper economic issues here?
Robert P. Murphy: In economics there are no controlled experiments, so partisans on a policy dispute can both continue to claim that the evidence is on their side. That’s why

Listen to the Audio Mises Wire version of this article.
People often ask me, “How are the Austrians different from the Chicago School economists? Aren’t you all free market guys who oppose big-government Keynesians?”
In the present article I’ll outline some of the main differences. Although it’s true that Austrians agree with Chicago economists on many policy issues, nevertheless their approach to economic science can be quite different. It’s important to occasionally explain these differences, if only to rebut the common complaint that Austrian economics is simply a religion serving to justify libertarian policy conclusions.
Before jumping in, let me give a few obvious disclaimers: I do not speak for all Austrian economists, and in this article I will be

[This article is part of the Understanding Money Mechanics series, by Robert P. Murphy. The series will be published as a book in late 2020.]
Starting with Carl Menger’s undisputed role in the “marginal revolution,” which ushered in subjective value theory, the Austrian school has made important contributions that have been absorbed into standard economic theory. However, the Austrian theory of the business cycle is still something unique to the school, differing not only from the Keynesian (see Chapter 14) but also the market monetarist (see chapter 15) explanations.
Indeed, if someone asks, “Why study Austrian economics?,” the present author answers that only the Austrian approach—with its emphasis on the economy’s intricate capital structure and an appreciation

Government restrictions on production are driving prices up as unemployment drives them down. It’s impossible to say now whether price inflation or price deflation will be the predominant factor in the crisis’s next phase.

This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.
Original Article: “Why the Current Unemployment Is Worse Than the Great Depression “

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What Is Entrepreneurship?
We shall concentrate on the capitalist-entrepreneurs, economically the more important type of entrepreneur. These are the men who invest in "capital" (land and/or capital goods) used in the productive process….

Danish State Plans to Pay

Oren Cass is the executive director of American Compass (AmericanCompass.org), a conservative think tank that stresses the importance of family and domestic industry, in opposition to a singleminded devotion to economic efficiency. Cass was previously a senior fellow at the Manhattan Institute for Policy Research, and was the domestic policy director for Mitt Romney’s 2012 presidential campaign. Bob and Oren have a friendly discussion about their disagreements on economic policy.

For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.

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In Spain You Can’t Use Your Own Back Yard. Police Make Sure of It.
The last

There’s a lot to be said regarding the Fed’s surprise announcements—including its Sunday surprise of $700 billion in renewed QE and the complete elimination of all reserve requirements for banks—but here let me just focus on one element: the tendency for Fed officials and all the pundits to treat injections of “liquidity” as if they don’t count as much when distorting the economy. I’ve seen some analysts literally call the Fed’s repo operations “free” as opposed to fiscal policy, which they agree actually costs something.
These distinctions are phony. The Fed’s $1.5 trillion was a “handout” in the same way that a Pentagon fighter jet contract is a handout to a defense contractor. However, the defenders of the Fed are correct that financial institutions per se

[This article is part of the Understanding Money Mechanics series, by Robert P. Murphy. The series will be published as a book in late 2020.]
In addition to the Keynesian perspective (covered in chapter 14), a relatively new challenge to the Austrian framework comes from the “market monetarists” and their endorsement of a central bank policy of “level targeting” of nominal gross domestic product (sometimes abbreviated as NGDPLT1). Although not as widespread as the Keynesian paradigm, market monetarism is arguably a more serious competitor to the Austrian school when it comes to monetary theory and business cycle analysis, because many of the leaders of the new approach are self-described libertarians with positions at free market organizations.
The most obvious

This article is part of the Understanding Money Mechanics series, by Robert P. Murphy. The series will be published as a book in late 2020.
In chapter 5 we reviewed the textbook analysis of how a central bank buys government debt in “open market operations” to add reserves to the banking system, with which commercial banks can then advance loans to their own customers. However, in the wake of the financial crisis of 2008, the Federal Reserve and other central banks around the world adopted new “tools” (the term often used) to influence economic activity.
In this chapter we will first elaborate on conventional monetary policy, and then explain why it had apparently “lost traction” after the fall of 2008. We will then summarize some of the major changes to the

Bob Murphy first explains a standard progressive viewpoint when it comes to dealing with issues like virus outbreaks, underage drinking, and prostitution. Yet, when it comes to dealing with people whose views they abhor, the progressives suddenly are “zero tolerance” and ignore the mechanisms they point to for the other issues.

For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.

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