Inflation

Nicolaus Copernicus is best known for his observation that the sun was at the center of our solar system, but he also made a number of astute observations about economics. 

Long before there was Alan Greenspan to turn the Federal Reserve into Casino Central, there was John Law, France's minister of finance.

As monetary authorities continue to inflate the money supply, they inflict more and more damage upon the currency. Unfortunately, as the economy falters under the inflationary regime, the “solution” always is to ramp up inflation. 

What if we could have eavesdropped on a conversation between Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen? It might have gone as follows....

Home prices continue to rise as the government tries to further intervene into the housing markets, all in the name of the “American Dream.” However, remember that these massive increases in housing prices began when the government decided to make housing more “affordable.”

A common belief among economists is that the central bank determines what interest rates should be. But is that accurate? Indeed, there is more to the story.

The more things change, the more they remain the same. In our present age of inflation, we are reminded of how Diocletian and other Roman authorities ordered price controls and other measures to hold down prices. None of these edicts were successful in bringing down prices.

What if we could have eavesdropped on a conversation between Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen? It might have gone as follows....

Home prices continue to rise as the government tries to further intervene into the housing markets, all in the name of the “American Dream.” However, remember that these massive increases in housing prices began when the government decided to make housing more “affordable.”

As monetary authorities continue to inflate the money supply, they inflict more and more damage upon the currency. Unfortunately, as the economy falters under the inflationary regime, the “solution” always is to ramp up inflation.