Now, more than ever, we're in uncharted waters when it comes to central banks and monetary policy. Economist Brendan Brown takes a look at where we are and what the future might hold for central banks' race to the bottom.
Central banks have decided that one of their main missions is to prevent deflation. But this only ends up causing the malinvestments that lead to economic busts.
After 2018, the US economy was already headed toward a recession. But bailouts and lockdowns have made things even worse.
The EU has now become essentially a makeshift, lawless regime designed to prop up bankrupt states. So much so, in fact, that even the German supreme court has become alarmed.
Rather than spurring real economic gains, the Federal Reserve’s unorthodox QE program has supported and extended the debt grid and generated asset exuberance. But this can only go on as long as there's capacity for more debt.
Why would an investor buy a bond that pays a negative interest rate? The answer lies in understanding how central banks manipulate the economy.
Why would an investor buy a bond that pays a negative interest rate? The answer lies in understanding how central banks manipulate the economy.
No matter what levers are pulled by the fiscal and monetary authorities, stones will not be turned into bread.
More money creation doesn't necessarily mean higher consumer prices. But, if production is falling while consumers use their stimulus checks to buy food and clothing, we could see noticeable price inflation.
Join the Mises Institute and economist Daniel Lacalle for a special live seminar on the COVID-19 crisis and what it means for your economic future.
