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Tag Archives: Monetary Policy

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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Does Anybody Really Believe the Fed? SchiffGold Friday Gold Wrap March 19, 2021

The Federal Reserve held its March FOMC meeting this week. There were no changes in monetary policy, but there was plenty of talk. The question is does anybody really believe what the Fed is saying? SchiffGold Friday Gold Wrap podcast says the mainstream doesn’t seem to believe the Fed. And he doesn’t either. But for very different reasons.The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You...

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The Fed’s Game of Chicken

The Federal Reserve wrapped up its March FOMC meeting yesterday. As expected, there were no policy changes. Interest rates remain at zero. Quantitative easing carries on as it has been. Peter talked about the Fed meeting and Fed Chair Jerome Powell’s messaging in his podcast. He said the Fed is playing a game of chicken with interest rates and inflation.While the Fed remained dovish in its policy, the FOMC did up its growth outlook and sang a much more optimistic tune about an economic...

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Peter Schiff: We’re Adrift in a Sea of Inflation

We’ve gotten quite a bit of economic data this week. Federal Reserve Chairman Jerome Powell insists inflation is anchored at 2%. But his assurances notwithstanding, a lot of the data signals inflation. In his podcast, Peter went over some of the numbers and concluded that inflation isn’t anchored at all. It’s anchors aweigh. We are adrift in a sea of inflation.Bond yields have continued to tick up this week. In fact, the yield on the 10-year Treasury topped 1.65% early Wednesday, hitting...

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Peter Schiff: This Is the Worst We’ve Ever Done on Trade

What is the ballooning trade deficit telling us about the US economy? Peter Schiff recently appeared on NTD News to talk about it. He said the US has never been worse on trade and it is a sign that we don’t have a recovering economy. In fact, we have a phony economy in danger of collapse.As Peter put it, the trade numbers for January “were a disaster.” The annual trade deficit for goods came in at an all-time high, increasing $3.4 billion to a record $221.1 billion. This broke the...

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Peter Schiff: The Fed Will Wave the White Flag at Inflation

Peter Schiff recently appeared on RT to talk about inflation, the Fed and gold. He said a lot of people still think the Fed will soon tighten monetary policy to deal with rising inflation pressure. But they’re wrong. Ultimately, the Fed is going to surrender to inflation without a fight. When the markets realize this, the dollar is going to crash through the floor and gold is going through the roof.Gold had a little bit of a rebound late last week before giving back some of those gains...

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Suggestions for the Reserve Bank of New Zealand?

The government of New Zealand recently added housing prices to their central bank’s mandate. (I put the mandate at the bottom of this post).  Previously, the RBNZ mandate was pretty similar to that of the Fed, 2% CPI inflation and maximum sustainable employment.  Not surprisingly, I don’t believe adding housing is a good idea. Nonetheless, it is possible to address the government’s request in a way that would actually improve monetary policy. I’ve never understood why...

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Stimulus, Inflation and More Inflation: SchiffGold Friday Gold Wrap Podcast March 12, 2021

Do you feel stimulated? Congress got the deal done on a $1.9 trillion stimulus package this week. But the markets continue to behave as if there is no inflation threat with all this borrowing, spending and money printing. On this week’s Friday Gold Wrap, host Mike Maharrey breaks down the stimulus bill. He tells you what’s in it and who will pay for it. He also talks about rising prices the mainstream can’t seem to find.The SchiffGold Friday Gold Wrap podcast combines a succinct summary...

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