Monetary Theory

The Fed was created for the benefit of the banking class, and while it remains under the control of that class it will not pursue a policy that would lead to a breakdown in the monetary system from which the banking class profits.

Since the outbreak of the so-called international-credit-market crisis, euphemisms have risen to great prominence. This holds true in particular for monetary-policy experts, who are at great pains to disguise what they are doing.

At the root of the current crisis in Europe are the actions of the European Central Bank. As Philipp Bagus explains in his new book, only a realization of the true costs the euro has imposed on the continent in the past can shed light on the path to future recovery.

One would think that being on the inside of many decades of careening one step ahead of monetary chaos might induce a sober, even cynical, spirit — that it might lead the insider to call for keeping one's metaphorical air-raid shelter well stocked and at the ready.

As a developer, I do not hire an employee before I have conceived of a construction activity that will earn me a decent return. I hire an employee when I have a productive need for his services.

Fiat money — or, to be more precise, its production — is already a violation of the free-market principle; and fractional-reserve banking amounts to leveraging the economic consequences of fiat money. Austrians favor a money that is freely chosen and operates by market principles.

Bernanke assured the national audience that the Fed was not printing money; however, he didn't explain where the Fed was going to get the funds to buy $600 billion worth of treasuries.

The economist should not allow his readers to accept the current myth that inflation is a scourge that governments try, with varying success, to keep in check. This myth is one of the consequences of economists generally failing to make explicit their assumptions.

I have not been persuaded by Mish's alternate framework. To be clear, I'm not arguing that Mish's fans should abandon their hero. Rather, I will simply point out that Mish's "calls" have not been nearly as prescient as he so often claims.

It is the seeking of profits that is the key to increased living standards for everyone. But high profits do not necessarily correspond to real economic growth and can come about due to adverse circumstances.