Financial Markets

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Dan Sanchez

When interest rates drop, entrepreneurs have no reliable way to tell whether, and to what extent, the drop is caused by (A) true increases in the ongoing flow of investable resources or by (B) what amounts to a temporary series of one-time transfers of wealth into the loan market. With such Fed-imposed blindness to the true data of the market, businesses across the whole economy are bound to make malinvestments.

Frank Shostak

We suggest that the threat of future crises will disappear once the Fed stops tampering with interest rates and the money supply. Furthermore we suggest that the act of money creation out of thin air is going to disappear once the present paper standard is replaced with a gold standard. If we allow a market-chosen money to fulfill the role of the medium of exchange, the issue of inflation will also disappear.