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Tag Archives: Monetary Policy

Peter Schiff: The One Promise the Fed Is Going to Keep

Since the beginning of the pandemic, government debt and money printing are off the chart. This is creating inflationary pressure. Prices are on the rise. And this is by design. In fact, the Fed has been promising more inflation for years. As Peter Schiff explains, it looks like this is one promise the Fed is going to keep. The US government blew up the national debt by over $5 trillion in just 18 months. To support all of his borrowing and spending, the Fed turned the printing press up...

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At Some Point You Gotta Pay the Piper: SchiffGold Friday Gold Wrap March 26, 2021

Every time the economy gets into trouble, governments and central banks react the same way. They slash interest rates and loosen monetary policy.  This gooses the economy — temporarily. But when the next crisis comes, it takes an even bigger dose of extraordinary monetary policy to revive the economy. The Fed has pushed things into the future several times, but as Friday Gold Wrap host Mike Maharrey explains, at some point you’ve got to pay the piper. In this episode, he also discusses...

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Ludwig von Mises on the “Barbarous Relic”

An article I read for yesterday’s Monetary Theory and Policy Class referenced a section of Ludwig von Mises‘s magnus opus, Human Action. I had read the whole thing cover to cover in 1970-71, the year I took off to study economics on my own, but had read only small parts since. But, as happens when I read one small part of Human Action, I start noticing other parts that are interesting. I liked Mises’s take on Keynes’s famous statement that gold is a “barbarous...

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Government and Central Bank Medicine Makes the Economy Sicker

Every time the economy gets into trouble, governments and central banks react the same way – they cut interest rates and loosen monetary policy to stimulate borrowing and spending. The idea is that the “stimulus” will increase demand and pull the economy out of trouble. But there is a dark side to this policy – debt. And debt is slowly poisoning the economy.We’ve seen this clearly during the coronavirus crisis. The Fed immediately cut rates to zero and launched quantitative easing....

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Peter Schiff: When Paul Krugman Talks, Nobody Should Listen

The latest Biden/Democrat stimulus bill is just the beginning. There is more government spending coming down the pike. That means more money printing. But Paul Krugman says not to worry. It didn’t cause a big jump in CPI last time and it won’t this time either. Peter Schiff talked about it in his podcast. He said when Krugman talks – nobody should listen.With the ink barely dry on a $1.9 trillion stimulus bill, reports are circulating that the Biden administration is about to unveil...

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Proactive and reactive COVID policies

New York magazine has a good article on Covid-19: “Basically, going back to January, they’d be like, ‘China’s not going to control it; 80 percent of the population is going to get it; all efforts to contain it are going to fail; we have to learn to live with this virus; contact tracing and testing make no sense; this is going to be everywhere; right now we need to build up hospitals’ — which they didn’t even do. But they really didn’t think it was stoppable,” she...

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The professor vs. the markets

Turkey’s authoritarian leader sacked the central bank head just months after appointing him to the position: When Turkey raised interest rates more than market expectations last week, Naci Agbal was cheered by investors who viewed the move as more evidence that the central bank governor was willing and able to pursue a conventional monetary policy. Two days later, he was out of a job — the third governor President Recep Tayyip Erdogan has sacked in less than two years...

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The Factors in the Drastic Money Supply Drop from 1929 to 1933

In Jeff Hummel’s Monetary Theory and Policy class recently, he assigned an interesting computational problem that shed light on the main factors driving the drop in the U.S. money supply between 1929 and 1933. He used a problem from Greg Mankiw’s Intermediate Macro text. The problem didn’t give magnitudes but I assume everything was in billions of dollars. The money supply was $26.5 billion in 1929 and $19.0 billion in 1933. That’s a drop of 28 percent. Here was the...

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Some Non-Covid Links

George Will writes about an upcoming U.S. Supreme Court case on the takings clause. Here are his concluding paragraphs: Ratification of the Bill of Rights, including the takings clause, was effective Dec. 15, 1791. Three months later, in a newspaper article on property, James Madison quoted, as the Founders were wont to do, the English jurist William Blackstone, who said the property right means the“dominion which one man claims and exercises over the external things of the world, in...

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Will the Fed follow its rhetoric or its rule?

In recent years, the Fed has increasingly adopted the rhetoric of 1960s Keynesianism.  Go for growth.  Don’t worry about a bit more inflation.  Jobs are much more important.  Given that 1960s Keynesianism gave us the Great Inflation, should we be worried about today’s rhetoric? Oddly, at roughly the same time that they adopted all this expansionary rhetoric, the Fed switched to average inflation targeting, which makes 1960s-style expansionary monetary policy totally...

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