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My letter to the NY Times re: Not really a favorable market reaction

Saturday, January 24th, 2015 by posted in Banking, Economics.

Re: Stimulus for Eurozone, but it may be too little or too late Dear Sirs: Your analysis of the likely effect of the European Central Bank’s proposed massive quantitative easing program is full of economic fallacies that, unfortunately, masquerade as

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PhD-Standard Monetary Crack Up

Saturday, January 24th, 2015 by posted in Banking, Economics, History.

The hills are alive with the panic of central bankers. First there was the fallout from the Swiss National Bank’s decision to unshackle the Franc from the Euro. Then, how much Q Mario Draghi put with his E. It turns

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Get ready for negative interest rates in the US

Saturday, January 24th, 2015 by posted in Banking, Economics.

Re: Dollar rise puts Fed under pressure I predict that the Fed will start charging negative interest rates on bank reserve accounts, which will ripple through the markets and result in negative interest rates on savings at banks. I make

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China’s Unsustainable Growth

Friday, January 23rd, 2015 by posted in Banking, Capitalism, Economics.
central-bank-china-1

In November 2014, China’s central bank declared it will lower the interest by 0.4%. The modification is not large enough to imply a change of policy direction, however; it is still an effort to sour on the financial market and

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Switzerland Leaves the European Monetary Union

Friday, January 16th, 2015 by posted in Banking, Economics, Politics.

Oh. You didn’t know that Switzerland was part of the European Monetary Union? You thought that the Swiss used their own currency, the Swiss franc? In a definitional sense only, you are correct. Within its monopolized currency area, the political

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Will the ECB Soon Fire Up the Printing Presses?

Friday, January 16th, 2015 by posted in Banking, Economics, Regulation.
ecb_image

There is growing anticipation that the European Central Bank will pull the QE (quantitative easing) trigger at its upcoming meeting on January 22nd. Never mind that such an action explicitly violates article 104 of the Maastricht treaty (article 123 of

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The Myth of Fed Independence

Friday, January 9th, 2015 by posted in Banking, Capitalism, Economics.
yellen19_teaser

Excerpted from The Case Against The Fed. Reprinted from Mises.org By far the most secret and least accountable operation of the federal government is not, as one might expect, the CIA, DIA, or some other super-secret intelligence agency. The CIA

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Currency Wars

Monday, January 5th, 2015 by posted in Banking, Capitalism, Economics.
currency_wars_teaser

The current Japanese monetary printing orgy and European Central Bank threats of massive QE are both aimed at primarily boosting exports to kick start their moribund economies. The yen has dropped nearly 12% against the dollar since the Japanese announcement

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A statement full of Keynesian fallacies

Friday, January 2nd, 2015 by posted in Banking, Economics.

From today’s Open Europe news summary: Draghi: ECB ready to initiate QE to counter low inflation In an interview with Handelsblatt, ECB President Mario Draghi warned that persistently low inflation in the Eurozone meant that “the risk that we do not

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Oil’s Swoon Undoes the Fed

Friday, January 2nd, 2015 by posted in Banking, Capitalism, Economics.
gas-prices-going-down_teaser

Reprinted from Casey Research While we’re taught in school and reminded by many that central banks are in the inflation-fighting business, history proves the opposite. Economist Murray Rothbard compared central bankers who talked about suppressing inflation to arsonists who would

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Epic Fail: 100 Years of the Fed

Thursday, January 1st, 2015 by posted in Banking, Capitalism, Economics.
Federal Reserve teaser

Reprinted from The Freeman The most surprising monetary innovation of our time is bitcoin, a privately produced digital currency and payment system. It is a global system that provides a dramatic alternative to central banking and monetary nationalism as we

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The Banking System Can’t Lend Out Reserves, But a Bank Can

Saturday, December 27th, 2014 by posted in Banking, Economics.
bank-teller

This post will seem simple to some, but I want to correct a slight confusion I’ve seen over the last several years in the economics blogosphere. (I was motivated to write because of an exchange with Nick Freiling, who loves

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The Role of the Leverage Effect in the Austrian Business Cycle heory

Friday, December 26th, 2014 by posted in Banking, Capitalism, Economics.
economist-warns-that-chinas-bear-stearns-moment-may-strike-any-time_teaes

The process through which lax credit conditions cause malinvestments (the nub of the Austrian Business Cycle Theory) is commonly passed over without much ado. In sections 22.2.1 to 22.2.3 of my recent book, Finance Behind the Veil of Money, I

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Hold the Frankincense and Myrrh

Monday, December 22nd, 2014 by posted in Banking, Capitalism, Economics.
camels_teaser

As we approach the end of the calendar year, it is useful to look back at recent events to give us a sense of what the year ahead may hold. Looking back at the past couple of months, two events

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An Unorthodox Solution to the World’s Economic Problems

Wednesday, December 17th, 2014 by posted in Banking, Capitalism, Economics.
Federal_Reserve teaser

We currently face a monumental dilemma. How do we extract ourselves from all this excessive debt without crashing the world economy? There is a solution which is totally counterintuitive: print even more money. In other words, to get out of

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Krugman’s Uncertainty

Thursday, December 11th, 2014 by posted in Banking, Capitalism.
Paul_Krugman

Attending the “Managing the Economy: Main Street, Wall Street and the Federal Reserve” on 9th December 2014, I was able to hear Dr Paul Krugman speak on issues of monetary policy and fiscal policy. Fiscal policy was deemed irrelevant early

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Are these two events linked?

Friday, December 5th, 2014 by posted in Banking, Economics.

From today’s Open Europe news summary: According to documents seen by Reuters, Eurozone finance ministers are considering extending Greece’s bail-out programme, due to end this year, by six months to the middle of 2015. However, a Greek government official insisted that

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Money and the Law

Wednesday, December 3rd, 2014 by posted in Banking, Capitalism, Economics, History.
oil249L_teaser

(Original Italian publication: Movimento Libertario, L’Indipendenza) The modern (or totalitarian) State is founded on two frauds: the fraud of law and the fraud of money. The wielders of political power have replaced the law and money with things they called

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The Politics of Monetary Policy

Monday, December 1st, 2014 by posted in Banking, Capitalism, Economics.
monetary_teaser

This article is excerpted from chapter 3 of Politically Impossible? Suppose an economist is convinced that the most appropriate international monetary system in a civilized age is one in which the measuring rod of money in every country has a

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On the Swiss Gold Referendum

Sunday, November 30th, 2014 by posted in Banking, Capitalism, Economics.

The Swiss gold initiative has come and gone. It can be summarized as much ado about nothing. Even if it had passed, the initiative would have had no real impact on the Swiss National Bank’s ability to print money or

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