Tag Archives: 6b) Mises.org

In the early 1920s, Ludwig von Mises became a witness to hyperinflation in Austria and Germany — monetary developments that caused irreparable and (in the German case) cataclysmic damage to civilization. Mises’s policy advice was instrumental in helping to stop hyperinflation in Austria in 1922. In his Memoirs, however, he expressed the view that his instruction — halting the printing press — was heeded too late: Austria’s currency did not collapse — as did Germany’s...

Japan has not recovered fully from the lost decade of the 1990s. The Asian financial crisis was exacerbated by the dot-com crash and then a few years later the global economic collapse. Tokyo has tried everything to combat anemic growth and deflation, and resolve the zombification of the Japanese economy through an immense buildup of government debt and a dramatic loosening of monetary policy, including subzero interest rates. This has become known as...

Boris Johnson’s Conservatives won an outright majority in yesterday’s general election, pushing the Tories to an 80-strong Commons majority in what the Daily Mail called a “staggering election landslide.” Given that the Conservatives employed an election slogan of “Get Brexit Done,” it appears the election was largely a referendum on Brexit. The Conservative victory suggests Johnson will now move forward much more quickly on putting a UK-EU agreement in place for UK...

In the United States, law courts routinely hand out court order mandating payments to victims. And then do little to enforce them. For example, according to the U.S. Census Bureau, in 2015 only 43.5 percent of custodial parents received the full amount of court-ordered child support payments. 25.8 percent received partial payment while 30.7 percent — a figure which is trending higher — received no payments. I live in Canada, where the situation is equally, if not...

Mainstream thinking considers the central bank a key factor in the determination of interest rates. By setting short-term interest rates, the central bank, it is argued, can influence the entire interest rate structure by creating expectations about the future course of its interest rate policy. In this way of thinking, the long-term rate is an average of current and expected short-term interest rates. If today’s one-year rate is 4 percent and the next year’s...

Christine Lagarde, the new president of the European Central Bank (ECB), has added a new green dimension to monetary policymaking. The charming Frenchwoman signaled that the ECB could buy green bonds, possibly as part of the reanimated bond purchase program (a form of QE). This could reduce the financing costs of green investment projects. If interest rates were negative, the green bond purchases would even amount to a subsidy for climate-friendly investment. This...

The Austrian business cycle theory offers a sound explanation of what happens with the economy if and when the central banks, in close cooperation with commercial banks, create new money balances through credit expansion. Said credit expansion causes the market interest rate to drop below its “natural level,” tempting people to save less and consume more. Credit expansion also drives firms to increase investment spending. The economy enters into a boom phase....

Not every square inch of the planet earth is suitable for a housing development. Flood plains are not great places to build homes. A grove of trees adjacent to a tinder-dry national forest is not ideal for a dream home. And California’s chaparral ecosystems are risky places for neighborhoods. This is nothing new. While people many Americans who live back East may imagine that something must be deeply wrong when they hear about fires out West, the fact is things are...

It has now become commonplace for politicians and media pundits to casually assert that "everyone" — to use Alexandria Ocasio-Cortez's term — is now working more and more hours — and perhaps two or three jobs — just to attain the most basic, near-subsistence standard of living. This is repeated time and time again, usually without context or supporting evidence. Never mind, for example, that the Bureau of Labor Statistics reports only around 5 percent...

Negative interest rates are now entrenched reality in Europe, and not just for buyers of sovereign or corporate debt – even retail savings accounts are affected. What does this mean for real people trying to save for retirement? And more broadly, what does it mean for Europe culturally? Not to mention America, since Alan Greenspan tells us negative rates are coming here soon? Our guest Rahim Taghizadegan from the independent Viennese...