Perhaps it is worth considering that the monetary system is not based on anything substantial or tangible, and has not been since 1913. Before then the value of the dollar was pretty stable, not so much since. Finally, with a system that is built around monetary manipulation, it only makes sense that those closest to those manipulations will be the…

Monetarism and the Failure of Central Banking

Monetarism is an economic theory which arose in the 1970s, mainly because of the problem of inflation. It was the “House Theory” of the early Reagan Administration, and is widely credited with helping to end the post-Vietnam era of high inflation and…

TIME FOR MONETARY POLICY SHOCK

Many economists are beginning to question the relevance of monetary policy for economic growth. As the global recession lingered between 2007 and 2009, many central banks were forced to cut interest rates to really low levels — or, in economics parlance, zero lower bound…

A Rant Replying to Those Who Say “Asset Prices Are Distorted by Central Banks”

You claim asset prices are “distorted” by central banks and QE? I disagree. Asset prices, always and everywhere, are set by the marginal buyer. Always and everywhere, governments buy financial…

A New Goal: The Federal Reserve, Interest Rates, & a 3% Inflation Target

During the December meeting, Yellen, as expected, announced that interest rates would go up and will likely increase rates again in the near future. While this may seem inconsequential to those unfamiliar with the subject, the significance is not lost…