Australian Austrian economics writer Gerard Jackson skewers the fallacy that home extracting equity by borrowing against higher home prices then spending the money is good for the economy. Borrowing, argues Jackson (considering for a moment the case of an economy without fractional reserve banking), is the postponement of a consumption
Michael R. Sesit, writing in the Wall Street Journal ($) , poses the question ”In a World of Bubbles, Which Will Pop Next?”. After reviewing a succession of bubles in paper assets and housing that have been inflating and popping in several countries over the last few years, he writes (sounding very Austrian): Will the cycle of bubbles forming
Financial columnist Bill Bonner, a frequent critic of the world fiat money system, whacks recent efforts by the US government to get China to allow its currency to float. As Bonner has frequently opined, the dollar standard allows Americans to consume without producing and to spend without saving, by living at the expense of the rest of the
Floyd Norris, writing in the New York Times, explains that Foreigners May Not Have Liked the War, but They Financed It . This is one of the many perversities of the world wide dollar reserve system. The US imports more goods than it exports, which must be balanced by exporting more financial assets than it imports. Firms in foreign countries
This summer’s City Journal exposes Union U , the latest bogus discipline masquerading as a university department, as if appending the word “studies” to a political advocacy program makes it an subject worthy of academic study. These programs, funded either by state universities or labor unions, give students credit for union organizing and teach
The two housing GSEs (government-sponsored enterprises) Fannie Mae and Freddie Mac, dominate the mortgage finance sector. They operate on tremendous amounts of leverage and they exposed to swings in their asset and liabilitiy values if interest rates move. They claim to have hedged their interest rate risk through derivatives, but even if that
In an effort to keep their currencies from rising against the dollar, mercantilist governments in Asia are continuing to purchase vast amounts of dollars. The situation is unsustainable in the opinion of Chris Wood of CSLA (part of an Austrian-oriented group of market strategists at that firm). So reports the Asia Times . “So long as America
Fox News reviews “a terrific new book by Washington Post reporter Cindy Skrzycki ( search ) called The Regulators: Anonymous Power Brokers in American Politics , ( Rowman & Littlefield, 2003.)”. According to the review the book makes the point that there are a lot of regulations and that they are difficult for businesses to comply with. The
The GSEs, Fannie Mae and Freddie Mac, are quasi-public entities that purchase home mortgages from banks and either hold them or package them and re-sell them as mortgage-backed securities. Their profits accrue to their shareholders and well-compensated executives, while they enjoy low borrowing costs due to the implied backing of the US
On page 1 of today’s Wall Street Journal (available on their subscriber site), there is a story about the lack of any congressional action in light of the recent accounting scandal at Freddie which led to the forced resignation of its top management. Fannie and Freddie are quasi-”privatized” corporations that enjoy a substantial government
What is the Mises Institute?
The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.