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Does the World Need a World Bank?

Tuesday, September 2nd, 2014 by posted in Banking, Capitalism, Economics.
worldbank-tea

[Ludwig von Mises on Money and Inflation (2010)] As a medium of exchange, the situation of money is different from that of other commodities. If there is an increase in the quantity of other commodities, this always means an improvement of

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The Perfect Banking System

Wednesday, August 27th, 2014 by posted in Banking, Capitalism, Economics.
casino teaser

Reprinted from the Carl Menger Center for the Study of Money and Banking he perfect banking system, like the perfect monetary system, is one which serves the needs of consumers and savers, and not the needs of the government. It

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IMF: Risk of Another Housing Crash

Wednesday, August 27th, 2014 by posted in Banking, Capitalism, Economics.

The International Monetary Fund is warning that the world is at risk of “another devastating housing crash.” This is true for instance for Australia, Belgium, Canada, Norway and Sweden,” he said. In the wake of the global recession central bankers

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World Reserve Currencies: What Happened During Transition?

Tuesday, August 26th, 2014 by posted in Banking, Capitalism, Economics.
dollar-bills_0 teaser

Reprinted from EconomicReason.com The decline of the US dollar hegemony is ever so clear today and this article aims to provide the reader with what exactly happened during past periods of reserve currency transitions. Historically, when a reserve currency transitioned

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Banks Can Perform Their Two Functions With 100% Reserves

Thursday, August 21st, 2014 by posted in Banking, Economics.
teller

In a recent post at Forbes, John Tamny made some very strong claims against the Austrian School. In the present post, I want to push back on just one of his points (though I think there are several problems with

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Gold versus Fractional Reserves

Thursday, August 21st, 2014 by posted in Banking, Capitalism, Economics.
goldt

[This article originally appeared in The Freeman, May 1979.] The present worldwide inflation has done, and will continue to do, immense harm. But it may eventually lead to one great achievement. It may make it possible to restore (or perhaps it

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Low Interest Rates Harm Everyone

Monday, August 18th, 2014 by posted in Banking, Capitalism, Economics.

It’s not just poor pensioners who are harmed by central banks’ ultra-low interest rate targets. Governments are now also getting squeezed. Pension plans like social security rely on, historically, fixed-income investments to provide returns for the future payouts. With interest

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Fed Fueled M & A Destroys Capital

Monday, August 11th, 2014 by posted in Banking, Economics.

The world’s central bankers have given companies the urge to merge. Merger and Acquisition (M&A) activity has already reached $2.2 trillion this year according to Thomson Reuters Deals Intelligence, up 70% from this time a year ago. The deals are

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Money Doesn’t Really “Go Into” Other Financial Assets

Thursday, August 7th, 2014 by posted in Banking, Economics.
Printing Press

One of the interesting features of the U.S. economy since 2008 is that despite the tremendous increase in what’s called “the monetary base”—the quantity of dollars that the Federal Reserve directly controls—we haven’t seen a corresponding increase in consumer prices.

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How the Surge of Hot Money Pushes San Francisco to the Brink

Thursday, August 7th, 2014 by posted in Banking, Capitalism.
DowntownSF teaser

Reprinted from Wolf Street The median home price in my beloved and crazy San Francisco – that’s for a no-view two-bedroom apartment in an older building in a so-so area – after rising 13.3% from a year ago, hit an ultra-cool,

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London’s press jumps on QE bandwagon

Friday, August 1st, 2014 by posted in Banking, Capitalism, Economics.

First the Financial Times and now the Economist have jumped on the quantitative easing (QE) bandwagon and called for the European Central Bank to embark on a policy of buying assets in the open market at above market prices–with printed money, of course.  What

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Life Insurance: Seceding from the System?

Thursday, July 31st, 2014 by posted in Banking, Economics.
life-insurance teaser

Reprinted from FEE.org Most Americans implicitly assume that the financial system has always worked the way it does now. Although they may have a vague knowledge that the U.S. dollar used to be tied to gold, they can’t really imagine

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Easy Money Blood Thinners

Monday, July 28th, 2014 by posted in Banking, Capitalism, Economics.
Lehman Brothers fascia goes on sale at Christie's

Reprinted from the Pembroke Observer Since the collapse of Lehman Brothers investment bank in 2008, central banks around the world have created trillions of additional dollars, yen, euros and renminbi. In the immediate aftermath of Lehman’s bankruptcy other banks, unsure

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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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