Monetary Policy

Markets, Not Janet Yellen, Should Set Interest Rates

by Richard M. Ebeling May 26, 2015

Financial markets in the United States and around the world are all waiting with “bated breath” for when the Federal Reserve modifies its “easy money” policy and starts to raise interest rates. No one, however, asks a simple question: Why is the American central bank in the interest rate setting business? In May 20th, the minutes were released of the ...

Europe’s Move in the Direction of More Monetary Mischief

by Richard M. Ebeling January 27, 2015

The European Central Bank has announced its intention to create out of thin air over one trillion new Euros from March 2015 to September 2016. The rationale, the monetary central planners say, is to prevent price deflation and “stimulate” the European economy into prosperity. The only problem with their plan is that their concern about “deflation” is a misguided fear, ...

The False Promises of Two Percent Price Inflation

by Richard M. Ebeling December 16, 2014

A specter is haunting the world, the specter of two percent inflationism. Whether pronounced by the U.S. Federal Reserve or the European Central Bank, or from the Bank of Japan, many monetary central planners have declared their determination to impose a certain minimum of rising prices on their societies and economies. One of the ...

The Case for Monetary Freedom and Free Banking

by Richard M. Ebeling December 11, 2014

There has been no greater threat to life, liberty, and property throughout the ages than government. Even the most violent and brutal private individuals have been able to inflict only a mere fraction of the harm and destruction that have been caused by the use of power by political authorities. The pursuit of legal plunder, to use Frédéric Bastiat’s well-chosen ...

Don’t Believe Government about Price Inflation

by Richard M. Ebeling September 2, 2014

It is an old adage that there are lies, damn lies and then there are statistics. Nowhere is this truer that in the government’s monthly Consumer Price Index (CPI) that tracks the prices for a selected “basket” of goods to determine changes in people’s cost-of-living and, therefore, the degree of price inflation in the American economy. On August 19th, the ...

Fed Follies: Central Bank Continues to Force Economy in Wrong Direction

by Richard M. Ebeling August 26, 2014

For more than a decade, now, Federal Reserve policy has been guided by the fear of one economic bogyman: the presumed danger of “price deflation.” The fear is unfounded and the inflationary “solution” only leads to disaster. During Alan Greenspan’s and Ben Bernanke’s watches at the helm of America’s central bank and now under Janet Yellen, the claim has been ...

Federal Reserve Policies Cause Booms and Busts

by Richard M. Ebeling August 20, 2014

Since the economic crisis of 2008-2009, the Federal Reserve – America’s central bank – has expanded the money supply in the banking system by over $4 trillion, and has manipulated key interest rates to keep them so artificially low that when adjusted for price inflation, several of them have been actually negative. We should not be surprised if this ...

The U.S. Embrace of Monetary Tyranny, Part 3

by Jacob G. Hornberger July 1, 2014

Part 1 | Part 2 | Part 3 In 1933, in one of the most shocking events in the history of the United States, Franklin Roosevelt issued a series of executive orders, backed by Congress, that required the American people, on pain of fine and imprisonment, to surrender their gold coins to the federal government, for ...

The U.S. Embrace of Monetary Tyranny, Part 2

by Jacob G. Hornberger June 1, 2014

Part 1 | Part 2 | Part 3 In the midst of the Civil War in 1862, Abraham Lincoln secured passage of the first legal-tender law in the history of the United States. It was a law that planted the seeds of monetary debauchery that would culminate more than 70 years later during the presidential regime ...

The U.S. Embrace of Monetary Tyranny, Part 1

by Jacob G. Hornberger May 1, 2014

Part 1 | Part 2 | Part 3 The rise of Bitcoin as an alternative currency raises some important questions about America’s monetary system. Why does the United States have a fiat-money system — that is, a system of irredeemable paper currency? Why aren’t Americans free to use any money they want? What is the role ...

The Business Cycle Explained

by George Leef March 11, 2014

It Didn’t Have to Be This Way: Why Boom and Bust Is Unnecessary — and How the Austrian School of Economics Breaks the Cycle by Harry C. Veryser (Intercollegiate Studies Institute 2012), 318 pages. This is one instance where a book’s subtitle tells the reader much more about its content than the title does. You know at once ...

Money and the Constitution

by George Leef March 1, 2014

Constitutional Money: A Review of the Supreme Court’s Monetary Decisions by Richard H. Timberlake (Cambridge University Press and Cato Institute 2013), 257 pages. Most Americans would be surprised to learn that the Federal Reserve Notes in their wallets and the balances in their various accounts are not constitutional money. Yes, what they have is money, but not the kind ...