Financial Markets

Thanks to the Fed's balance sheet and the Fed's policy on reverse repurchase agreements, it's hard to tell whether the Fed is being hawkish or dovish. 

For nearly 30 years, the Fed has pursued an easy-money policy that has made the economy increasingly dependent upon the next round of “stimulus.” Reversing that policy will mean, at least in the short run, a stiff recession before the economy rebounds, which is a non-starter today.

As the Federal Reserve engineers one financial bubble after another, we are reminded that the Austrian Business Cycle Theory explains what is happening and how there is a better way. 

The First World War was critical to boosting the influence of that child of progressivism and Wall Street corporatism: the Federal Reserve System. 

Commercial real estate in the US faces major problems despite efforts by the Federal Reserve System to prop it up. Bonds used to finance commercial real estate markets are being hit especially hard, and there is no relief in sight.

John Maynard Keynes is the best-known economist from the 20th Century, that not being a good thing. At least he was more famous for his success in promoting his views than for his lack of success as an investor. His failures were an extension of his lack of economic understanding.

Contra Marx, the laws of economics are immutable and are the same no matter what historical epoch exists. Economies cannot flourish unless market prices, private property rights, and profits and losses are unhampered.

Ryan and Tho talk about what Donald Trump must do if he wants to actually fix our mounting economic problems of stagnation, debt, and inflation. 

For nearly 30 years, the Fed has pursued an easy-money policy that has made the economy increasingly dependent upon the next round of “stimulus.” Reversing that policy will mean, at least in the short run, a stiff recession before the economy rebounds, which is a non-starter today.

As the Federal Reserve engineers one financial bubble after another, we are reminded that the Austrian Business Cycle Theory explains what is happening and how there is a better way.