Monetary Policy

Deflation, Liquidation, and Necessary Revisionism

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During his ill-fated 1932 reelection campaign Herbert Hoover delivered a speech in which he said, In the midst of this hurricane the Republican administration kept a cool head, and it rejected every counsel of weakness and cowardice. Some of the reactionary economists urged that we should allow the liquidation to take its course until it had found its own bottom. ... [click for more]

QE Forever and John Q. Public

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The Federal Reserve’s Open Market Committee (FOMC) has voted to launch a third round of quantitative easing (QE3), this time focused on purchasing as much as $40 billion a month in mortgage-backed securities. This decision to provide liquidity ad infinitum could add nearly half a trillion to the Fed’s balance sheet annually and hold the federal-funds rate near zero ... [click for more]

The GOP’s Gold Plank

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The 2012 Republican Party platform contains a plank concerning a possible return to the gold or other metallic standard. The US dollar has been a fiat currency since President Richard Nixon suspended its convertibility to gold on August 15, 1971. The plank reads, Determined to crush the double-digit inflation that was part of the Carter Administration’s economic legacy, President Reagan, shortly ... [click for more]

The Roots of America’s Financial Crises

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Inflated: How Money and Debt Built the American Dream by R. Christopher Whalen (Hoboken, New Jersey: Wiley, 2010); 393 pages. It is obvious by now that the massive U.S. debt cannot be sustained. Last year’s downgrading by Standard and Poor’s of the U.S. government’s credit rating is but the latest signal that the Obama administration’s policy of an ever-expanding ... [click for more]

The Prospects for Sound Money

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A silver lining of the global economic crisis is that millions of people have been awakened to the importance of sound money to a modern economy. The housing bubble and subsequent bust, excessive leveraging, reckless speculation, and the sovereign-debt crisis afflicting Europe and the United States would all have been averted had money been commodity-based (e.g., gold and silver) ... [click for more]

The Debt Crisis and Fiat Money

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The European Union (EU) has a sovereign-debt problem. Greek government bonds have been downgraded to junk status, and there is talk of default. Italy, Spain, and Portugal appear to be next, as they face skyrocketing interest rates just when their governments must borrow more to service their debt. Should these countries default, some of Europe's largest banks which are heavily ... [click for more]

Central Planning at the Federal Reserve

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While it is understandable that inflation hawks keep a close watch on the Federal Reserve’s money-creation activities, an equally worrisome Fed activity is taking place right under their noses. Whether or not the Fed is expanding the money supply, it has undoubtedly moved into a new activity under cover of addressing the financial crisis and recession: central planner of ... [click for more]

Ron Paul’s De-Stimulus Plan

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Congressman Ron Paul has put forth an economic plan that calls for serious cuts in the size, budget, and power of the federal government. He has also proposed policies that would end the Fed-driven inflation responsible for the global economic meltdown. This is truly a de-stimulus plan. Paul’s plan would immediately cut $1 trillion from the federal budget by closing ... [click for more]

Censoring Cash

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If “money talks,” then a global campaign is being waged to silence it or, at least, to let cash speak only with permission. The Economic Collapse blog states, “All over the world, governments are either placing stringent reporting requirements on large cash transactions or they are banning them altogether. We are being told that such measures are needed to ... [click for more]

A Historic Fiscal Solution, If We Overcome Convention Fears

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If you haven’t noticed, the major problems at the federal level are bipartisan. The debt-ceiling charade, in particular, demonstrated that leaders of both major parties have no desire to balance their books. Sure, they’ll propose minor cuts to spending projections, but the status quo of deficits suits them just fine. The status quo does not, however, suit taxpayers, ... [click for more]

Federal Reserve Grabs New Powers

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While inflation hawks understandably keep a close watch on the Federal Reserve’s money-creation activities, an equally worrisome Fed activity is taking place right under their noses. Under cover of addressing the financial crisis and recession, the Fed has become the central allocator of credit. As San Jose State University economics professor Jeffrey Rogers Hummel points out in The Independent Review ... [click for more]
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