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More Bubble Trouble

Friday, July 18th, 2014 by posted in Banking, Economics.

With stocks at all-time highs, it’s hard not to think that we are in the midst of a bubble. According to one analyst, not only are we in a bubble, but it’s one of the biggest of all time. Stocks

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The Treaty That Wall Street Wrote

Wednesday, July 16th, 2014 by posted in Banking, Capitalism, History, Politics.
Ship-At-Panama-Canal-1 teaser

[From Inquiry (1977); reprinted in Wall Street, Banks, and American Foreign Policy (1995).] Reprinted from Mises.org The Panama Canal question has already established itself as the hottest political issue for the coming year. Ronald Reagan, who almost rode to the Republican nomination last year on

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First Derivatives Are a Tough Knut for Krugman to Crack

Friday, July 11th, 2014 by posted in Banking, Economics.
Wicksell

In a recent blog post, Paul Krugman tries to invoke the legacy of Knut Wicksell to prove that asset markets aren’t in a massive bubble. This is ironic, since Ludwig von Mises’ own theory of the business cycle drew on

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Central Planning by Central Bankers

Monday, July 7th, 2014 by posted in Banking, Capitalism, Economics.
federalresrve teaser

Reprinted from GaryNorth.com One of the problems that anyone who is critical of the Federal Reserve System faces is the fact that he is regarded as someone without any expertise in the area of money and banking. In a 2009

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Whiskey: For Drinking or Hoarding?

Thursday, July 3rd, 2014 by posted in Banking, Capitalism, Economics.
whiskey teaser

Reprinted from Casey Research A comedian quipped a few years ago, “You might be a redneck if your 401(k) is invested in NASCAR decanters.” When cheap money creates bubbles, suddenly the absurd become investment strategies. Whiskey, for instance, isn’t just

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Asset Bubbles Aren’t Yellen’s Problem

Thursday, July 3rd, 2014 by posted in Banking, Economics.

Speaking at an IMF sponsored event, Fed Chairwoman Janet Yellen warned of growing risk factors in several asset classes. Unfortunately, she doesn’t see the most aggressive monetary policy in American history as the cause. Analysts said Yellen was pushing back

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Deposit Insurance is a Gamble

Tuesday, July 1st, 2014 by posted in Banking, Economics.

In a letter to the Economist on May 3rd, Mark Neale, Chief Executive of the UK’s Financial Services Compensation Scheme (the country’s deposit insurance provider), chastised the magazine for its view of deposit insurance as a “corrosive trend” in the

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Bubbles Worry Central Bankers

Monday, June 30th, 2014 by posted in Banking, Economics.

After years of QE and other loose monetary policies, central banks are starting to get jitters about the effects of their policies. An organization representing the world’s main central banks warned Sunday that dangerous new asset bubbles were forming even

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Bank Deposits are Not Idle Reserves

Tuesday, June 24th, 2014 by posted in Banking, Capitalism, Economics.
bank vault teaser

What role do bank deposits serve? If you asked this to a run-of-the-mill bank customer they would likely tell you that they are looking for some safety reserve to cover expenses. Ask a banker and the answer could well be

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My letter to the Philadelphia Inquirer re: Wanting to jail the wrong bankers

Monday, June 23rd, 2014 by posted in Banking, Economics.

Dear Sirs: Mr. Joseph N. Distefano’s column “Should some bankers be in jail?” targets the wrong the bankers.  Sure, private sector banks made what ultimately came to be revealed as bad loans, but why would they do this?  There is

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Negative Interest Rates– Only The Start?

Friday, June 20th, 2014 by posted in Banking, Capitalism, Economics.
eurobanknote teaser

Reprinted from Circle Bastiat As Ryan McMaken noted on June 5,  the European Central Bank has instituted negative interest rates for member banks. This could soon spread to the US and also to consumer accounts. If so, you would find money

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My letter to the Financial Times, London re: Fed oversight will not prevent shadow bank losses

Wednesday, June 18th, 2014 by posted in Banking, Economics, Regulation.

Dear Sirs: In his June 17th essay titled “Make shadow banks safe and private money sound” Mr. Paul McCulley displays a good understanding of the functional mechanics of commercial bank credit creation, shadow bank credit creation, and the powers of

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Inequality Did Start Around 1970

Wednesday, June 18th, 2014 by posted in Banking, Economics.

In this post by Bob Murphy, some commenters disagree with the use of the early 1970s as the point when income and wealth inequality started to become a problem. Thomas Piketty has recently gained some fame for pointing this out.

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The Fed Won’t Let the Economy Heal

Tuesday, June 17th, 2014 by posted in Banking, Capitalism, Economics.
janetyellen teaser

Reprinted from Mises.org Most commentators are of the view that the massive monetary pumping of the Fed during 2008 prevented a major economic disaster. The yearly rate of growth of the Fed’s balance sheet jumped from 3.9 percent in January

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How Inflation Picks Your Pocket

Friday, June 13th, 2014 by posted in Banking, Capitalism, Economics.
money-printing-1024x768 teaser

Reprinted from Mises.org In the denouement of the film There Will Be Blood, the antihero Daniel Plainview dramatically reveals to his nemesis that he has secretly siphoned away all of the latter’s underground oil. “Drainage!” he bellows, as only Daniel Day-Lewis can,

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Canada’s Housing Problem

Friday, June 13th, 2014 by posted in Banking, Economics.

Stephen Poloz, Governor of the Bank of Canada, thinks Canada may have a housing problem on its hands: On the home front… high house prices and record household debt remain the most important “vulnerabilities” in the Canadian financial system –

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The Impossibility of Negative Interest Rates

Tuesday, June 10th, 2014 by posted in Banking, Capitalism, Economics.
ecb

Central bankers must be getting desperate. After the futile effort to boost the global economy via synchronized money printing en masse, they are doubling down on the same failed policy. Now it’s no longer enough to produce endless supplies of

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End Central Banking, End “Unearned” Wealth Inequality

Friday, June 6th, 2014 by posted in Banking, Capitalism, Economics.

With all the brouhaha going around regarding income and wealth inequality, the question that is rarely asked is why inequality is something to abhor. As I wrote last November, whether inequality is a bad thing is not the right question

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Down with Legal Tender

Friday, June 6th, 2014 by posted in Banking, Capitalism, Economics, Regulation.
canadiancurrency teaser

[This article is excerpted from chapters 4, 5, and 6 of Denationalisation of Money: the Argument Refined.] Reprinted from Mises.org When one studies the history of money, one cannot help wondering why people should have put up for so long with

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Crony Capitalism has Government Approval

Tuesday, June 3rd, 2014 by posted in Banking, Capitalism, Regulation.
capitalism teaser

Reprinted from Canadian Electronics Magazine When Judge Richard Posner, the prolific conservative intellectual, released his book “A Failure of Capitalism: The Crisis of ‘08 and the Descent Into Depression” last year, you might have thought the final verdict was in:

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