In the blurry world of conflicting economic indicators and forecasts and policy surprises, activist policymakers at the Fed do not know exactly what the “right” monetary policy is today. Neither do their activist critics.
People do not save and accumulate capital because there is interest. Interest is neither the impetus to saving nor the reward or the compensation granted for abstaining from immediate consumption. It is the ratio in the mutual valuation of present goods as against future goods.
Real GDP does not measure the real strength of an economy, but reflects monetary turnover. Thus, the more money is pumped, the stronger the economy appears to be.
The tactics used by central banks don't just create bubbles or drive up prices. They actively destroy value and act as a tax on real producers in the economy.
The slowdown of the European economy is a disaster considering the enormous stimulus we are immersed in.
Would it be possible for the boom-bust cycle to emerge in the free market economy where the central bank does not exist and where gold is money?
Loose monetary policy can appear to work so long as real wealth is expanding. But money expansion weakens wealth creation over time, eventually leading to slower growth, lost wealth, and economic busts.
The introduction of money does not alter the fact that individuals still have to produce something useful in order to secure some other useful goods for themselves.
Joe Weisenthal is questioning whether people should be able to deposit their money in a checking account and be paid interest on it — Rothbardians have been saying that for decades.
The Keynesian obsession with avoiding deflation and pushing consumer spending has led to a serious decline in savings and capital accumulation.
