Tag Archives: 6b) Mises.org

There is a grand economic fable that has been unfolding over the past two decades, one filled with mythical creatures and great fantasy. The main character of this fable is the grand wizard of the markets, the Federal Reserve.Like all great fables, it starts with magic. Over the last twenty years, the grand wizard of the markets magically created over $7 trillion dollars by cheating time through the spell of negative real interest rates. This magic fueled the...

The main central banks have been deliberating on the concept of introducing a digital currency. However, many citizens fail to grasp the rationale behind it when the majority of transactions in major global currencies are carried out electronically. Nevertheless, a central bank digital currency is much more than electronic money. I will explain why.Central banks are raising interest rates and enacting restrictive monetary policies as quickly as governmental...

As Austrian Business Cycle Theory explains, big-ticket capital expenditures are heaving influenced by interest rates, as we discussed here.Since housing is a big-ticket capital expenditure, demand for housing is strongly influenced by interest rates, which makes it an excellent leading indicator of the business cycle. The weakness we are seeing in housing now is one key reason I expect a major recession to likely start this year.The Fed Caused Housing Bubble 1.0The...

The Federal Reserve Board is responsible for formulating macro stabilization policy. More specifically, the Federal Reserve Board seeks tradeoffs between inflation and unemployment rates. Fed officials need meaningful data to formulate useful policies. Data on the unemployment rate that coincides with zero inflation provides a starting point for policy formulation. Fed officials also need data on the rate at which inflation reduces unemployment rates. Finally, data...

Among the most persistent of myths in the sphere of economics is of the supposed benefits of government spending in the economy. Apologists will include government spending in gross domestic product measures, as if government production is truly “productive.” A common argument in favor of government spending is national defense spending.US senator Tommy Tuberville (R-AL) declared on Twitter that he would be voting against a defense package that would send further...

In 2024 the Australian senate is establishing an inquiry into Coles and Woolworths, the two biggest grocery retailers in the country. These two retailers hold a market share of two-thirds of the retail grocery market in Australia.This follows sharp rises in government spending, inflation, consumer prices, and lending rates following the Covid crisis. Instead of addressing inflation-fueled spending, governments have chosen grocery retailers as the bad guy to blame for...

Market participants started the year with aggressive expectations of rapid and large rate cuts. However, after the latest inflation, growth, and job figures, the probability of a rate cut in March has fallen from 39 to 24%. Unfortunately for many, headline figures will support a hawkish Federal Reserve, and the latest comments from Jerome Powell suggest rate cuts may not come as fast as bond investors would like.For the Federal Reserve, the headline macro figures...

Moderate Conservatism: Reclaiming the Centerby John KekesOxford University Press, 2022; 256 pp.John Kekes, who taught for many years at the State University of New York at Albany, does not agree with the protagonist of Henrik Ibsen’s Brand that “the devil is compromise,” at least where politics is concerned. The thesis of Moderate Conservatism can be seen as an extended commentary on that disagreement. Kekes is a value pluralist who values many different things,...

Can a Black man communicate inconvenient truths? One did and a reporter for The Root, a Black on-line magazine, labeled them foolishness. What has he said? Among others, reportedly this: It was Africans who fought wars against Africans and then enslaved the losers. It was victorious African warriors who sold defeated African warriors to European slave traders in exchange for cloth, guns, and money. . . It was Africans who watched as Africans were sailed away in the...

[A selection from Liberalism.]All those in positions of political power, all governments, all kings, and all republican authorities have always looked askance at private property. There is an inherent tendency in all governmental power to recognize no restraints on its operation and to extend the sphere of its dominion as much as possible. To control everything, to leave no room for anything to happen of its own accord without the interference of the authorities—this...