by
The Austrian School of economics in the twentieth century was
dominated by Ludwig von Mises. He died in 1973. His followers have
divided into two main camps: the Rothbardians and the Lachmannites. They
have adopted rival philosophies and rival strategies.
The main
strategy of the Lachmannites is to get tenure at a university. The main
strategy of the Rothbardians is to persuade the general public of the
truth of economic liberty.
A college teacher who is granted tenure
need not publish anything ever again. He will be paid for merely
showing up to class. The number of classes that he teaches declines. He
is immune from dismissal. This is the bureaucrat's dream come true.
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Showing posts with label Austrian School. Show all posts
Showing posts with label Austrian School. Show all posts
Friday, March 29, 2013
Should Bernanke Park the Helicopter?
by Frank Shostak
According to Ben Bernanke, pulling back on aggressive policy measures too soon would pose a real risk of damaging a still-fragile recovery.
The Fed chief is of the view that, for the purposes of financial stability, a continuation of the central bank’s aggressive stimulus, conducted through purchases of Treasury and mortgage securities, remains the optimal approach.
In response to the financial crisis and the deep recession of 2007–09, the Fed not only lowered official rates effectively to zero, but also bought more than $2.5 trillion in assets in an effort to keep long-term rates low.
According to Ben Bernanke, pulling back on aggressive policy measures too soon would pose a real risk of damaging a still-fragile recovery.
The Fed chief is of the view that, for the purposes of financial stability, a continuation of the central bank’s aggressive stimulus, conducted through purchases of Treasury and mortgage securities, remains the optimal approach.
In response to the financial crisis and the deep recession of 2007–09, the Fed not only lowered official rates effectively to zero, but also bought more than $2.5 trillion in assets in an effort to keep long-term rates low.
Etichette:
Austrian School,
Ben Bernanke,
FED,
Inflation,
QE3,
QE4,
Quantitative Easing,
US economy
Friday, March 15, 2013
The Stateless Equilibrium
by Predrag Rajsic
The stateless market society—a peaceful social arrangement based on voluntary relations among individuals in which the state is not present—is not a popular idea. Many people believe that this society would lack the capacity to define and enforce property rights, and that this would result in chaos, tyranny of the rich or in a reversal to a state. This belief has led to a widespread dismissal of the stateless society paradigm.
Murray Rothbard is by many considered the champion of the stateless society doctrine. However, even Rothbard conceded that “there can be no absolute guarantee that a purely market society would not fall prey to organized criminality.”
While it is true that absolute guarantees for any social outcome are generally inappropriate, I argue that there are good reasons to believe that outcomes like chaos, tyranny of the rich, or even “organized criminality” in the absence of a state are unlikely.
The stateless market society—a peaceful social arrangement based on voluntary relations among individuals in which the state is not present—is not a popular idea. Many people believe that this society would lack the capacity to define and enforce property rights, and that this would result in chaos, tyranny of the rich or in a reversal to a state. This belief has led to a widespread dismissal of the stateless society paradigm.
Murray Rothbard is by many considered the champion of the stateless society doctrine. However, even Rothbard conceded that “there can be no absolute guarantee that a purely market society would not fall prey to organized criminality.”
While it is true that absolute guarantees for any social outcome are generally inappropriate, I argue that there are good reasons to believe that outcomes like chaos, tyranny of the rich, or even “organized criminality” in the absence of a state are unlikely.
Etichette:
Austrian School,
financial education,
Ludwig von Mises
Sunday, March 10, 2013
The Errors of Keynes's Critics
by Steven Kates
I was intrigued by the review that Philipp Bagus wrote of The Errors of Keynes (Los Errores de la Vieja Economía), a book written in Spanish by Juan Ramón Rallo, part of which deals with Say’s Law.
An important understanding is taking hold, that the road to unwind Keynesian economics travels through Say’s Law. Keynes himself could not have been clearer about the significance of Say’s Law to the entire structure of his argument. Keynes emphasized, over and over again, in The General Theory (TGT) that he was reversing the conclusions of those who believed Say’s Law to be true. Thus, there are two things that need to be done if you are going to refute Keynes. First, you have to know what Say’s Law is. Then you have to show it is valid.
I was intrigued by the review that Philipp Bagus wrote of The Errors of Keynes (Los Errores de la Vieja Economía), a book written in Spanish by Juan Ramón Rallo, part of which deals with Say’s Law.
An important understanding is taking hold, that the road to unwind Keynesian economics travels through Say’s Law. Keynes himself could not have been clearer about the significance of Say’s Law to the entire structure of his argument. Keynes emphasized, over and over again, in The General Theory (TGT) that he was reversing the conclusions of those who believed Say’s Law to be true. Thus, there are two things that need to be done if you are going to refute Keynes. First, you have to know what Say’s Law is. Then you have to show it is valid.
Etichette:
Austrian School,
Federal Reserve,
John Maynard Keynes,
Keynesian Economics,
Ludwig von Mises
Tuesday, March 5, 2013
Jim Rogers On Why He Moved To Asia
by hudsonunionsociety.com
The Hudson Union Society www.hudsonunionsociety.com is where today's leaders come to discuss tomorrow's ideas. If you live not to far from New York, please join us in person. n 1973, Jim Rogers co-founded the The Quantum Fund. During the following 10 years, the portfolio gained 4200% while the S&P advanced about 47%. The Quantum Fund was one of the first truly international funds. From 1990 to 1992, Rogers traveled around the world world on motorcycle, over 100,000 miles across six continents, which was picked up in the Guinness Book of World Records. Between January 1, 1999 and January 5, 2002, Rogers did another Guinness World Record journey through 116 countries, covering 245,000 kilometers with his wife, Paige Parker, in a custom-made Mercedes. The trip began in Iceland, which was about to celebrate the 1000th anniversary of Leif Eriksson's first trip to America. In December 2007, Rogers sold his mansion in New York City for about 16 million USD and moved to Singapore.
Etichette:
Alan Greenspan,
Asia,
Austrian School,
Ben Bernanke,
Investment,
Jim Rogers
The Myth of Fed Independence
by Murray N. Rothbard
By far the most secret and least accountable operation of the federal government is not, as one might expect, the CIA, DIA, or some other super-secret intelligence agency. The CIA and other intelligence operations are under control of the Congress. They are accountable: a Congressional committee supervises these operations, controls their budgets, and is informed of their covert activities. It is true that the committee hearings and activities are closed to the public; but at least the people’s representatives in Congress insure some accountability for these secret agencies.
By far the most secret and least accountable operation of the federal government is not, as one might expect, the CIA, DIA, or some other super-secret intelligence agency. The CIA and other intelligence operations are under control of the Congress. They are accountable: a Congressional committee supervises these operations, controls their budgets, and is informed of their covert activities. It is true that the committee hearings and activities are closed to the public; but at least the people’s representatives in Congress insure some accountability for these secret agencies.
Etichette:
Austrian School,
FED,
Federal Reserve,
Murray N. Rothbard
Saturday, February 23, 2013
The Market and the Distribution of Wealth
by Ludwig M. Lachmann
Everywhere today in the free world we find the opponents of the market economy at a loss for plausible arguments. Of late the "case for central planning" has shed much of its erstwhile luster. We have had too much experience of it. The facts of the last 40 years are too eloquent.
Who can now doubt that, as Professor Mises pointed out 30 years ago, every intervention by a political authority entails a further intervention to prevent the inevitable economic repercussions of the first step from taking place? Who will deny that a command economy requires an atmosphere of inflation to operate at all, and who today does not know the baneful effects of "controlled inflation?" Even though some economists have now invented the eulogistic term "secular inflation" in order to describe the permanent inflation we all know so well, it is unlikely that anyone is deceived. It did not really require the recent German example to demonstrate to us that a market economy will create order out of "administratively controlled" chaos even in the most unfavorable circumstances.
Everywhere today in the free world we find the opponents of the market economy at a loss for plausible arguments. Of late the "case for central planning" has shed much of its erstwhile luster. We have had too much experience of it. The facts of the last 40 years are too eloquent.
Who can now doubt that, as Professor Mises pointed out 30 years ago, every intervention by a political authority entails a further intervention to prevent the inevitable economic repercussions of the first step from taking place? Who will deny that a command economy requires an atmosphere of inflation to operate at all, and who today does not know the baneful effects of "controlled inflation?" Even though some economists have now invented the eulogistic term "secular inflation" in order to describe the permanent inflation we all know so well, it is unlikely that anyone is deceived. It did not really require the recent German example to demonstrate to us that a market economy will create order out of "administratively controlled" chaos even in the most unfavorable circumstances.
Etichette:
Austrian School,
Central Banks European,
Central Planning,
Credit Expansion,
Currency devaluation,
free enterprise,
freedom
Friday, February 22, 2013
The final countdown
By Alasdair Macleod
Governments have refused to accept the necessity of a period of economic re-adjustment following the credit-bubble. The bubble burst about five years ago and economic progress has been effectively suspended ever since. The consequences of this refusal to accept reality are at a minimum to make this adjustment unnecessarily drawn out and needlessly painful, without offering a better eventual outcome.
Reduced to its bare bones, the choice has been either to accept that unviable businesses and over-extended banks must go bust, or to ignore the problem and hope it goes away. We are familiar with this dilemma as investors: a business that refuses to adapt to new realities will eventually fail. Before it does, its investors have the chance either to sell their shares and perhaps reinvest their money more profitably, or to refuse to accept an early loss on their investment. Most of us, being human, take the latter course and usually regret it.
Governments have refused to accept the necessity of a period of economic re-adjustment following the credit-bubble. The bubble burst about five years ago and economic progress has been effectively suspended ever since. The consequences of this refusal to accept reality are at a minimum to make this adjustment unnecessarily drawn out and needlessly painful, without offering a better eventual outcome.
Reduced to its bare bones, the choice has been either to accept that unviable businesses and over-extended banks must go bust, or to ignore the problem and hope it goes away. We are familiar with this dilemma as investors: a business that refuses to adapt to new realities will eventually fail. Before it does, its investors have the chance either to sell their shares and perhaps reinvest their money more profitably, or to refuse to accept an early loss on their investment. Most of us, being human, take the latter course and usually regret it.
Etichette:
Alasdair Macleod,
Austrian School,
banking,
Ben Bernanke,
collapse,
Credit Expansion,
credit-bubble,
Keynesian Economics
The paradox of choice
By Alasdair Macleod
Here is a puzzle for Keynesian and other neo-classical economists.
When a consumer buys something, he must choose; and if he increases his purchase of one product, he must reduce his purchases of other products by the same amount. In other words he cannot buy both. This must be true for whole communities as well. How then can you have economic growth?
It is of course impossible without monetary inflation. This is because any statistical average, in this context GDP, can only grow if people are not forced to choose between alternatives, a condition that can only occur if they are given extra money. Not even a draw-down on savings to spend on consumption creates extra spending, because it is merely reallocates spending on capital goods to consumption goods. This simple point has been ignored by all neo-classical economists. The result is that in their pursuit of so-called economic growth, they have committed themselves to monetary inflation. Their concept of growth is to make that extra money available to consumers, so that they are not limited to what they earn and forced to choose. It has also become the basis for economic modelling, which takes known demand for products and services and from it extrapolates growth for an average of all of them.
Here is a puzzle for Keynesian and other neo-classical economists.
When a consumer buys something, he must choose; and if he increases his purchase of one product, he must reduce his purchases of other products by the same amount. In other words he cannot buy both. This must be true for whole communities as well. How then can you have economic growth?
It is of course impossible without monetary inflation. This is because any statistical average, in this context GDP, can only grow if people are not forced to choose between alternatives, a condition that can only occur if they are given extra money. Not even a draw-down on savings to spend on consumption creates extra spending, because it is merely reallocates spending on capital goods to consumption goods. This simple point has been ignored by all neo-classical economists. The result is that in their pursuit of so-called economic growth, they have committed themselves to monetary inflation. Their concept of growth is to make that extra money available to consumers, so that they are not limited to what they earn and forced to choose. It has also become the basis for economic modelling, which takes known demand for products and services and from it extrapolates growth for an average of all of them.
Etichette:
Austrian School,
GDP,
John Maynard Keynes,
Keynesian Economics
Sunday, January 27, 2013
Taleb On "Skin In The Game" And His Disdain For Public Intellectuals
Nassim Taleb sits down for a quite extensive
interview based around his new book Anti-Fragile. Whether the Black Swan
best-seller is philosopher or trader is up to you but the discussion is
worth the time as Taleb wonders rigorously from the basic tenets of capitalism
- "being more about disincentives that incentives" as failure (he
believes) is critical to its success (and is clearly not allowed in our
current environment) - to his intellectual influences (and total disdain for the likes of Krugman, Stiglitz, and Friedman
- who all espouse grandiose and verbose work with no accountability
whatsoever). His fears of large centralized states (such as the US is
becoming and Europe is become) being prone to fail along with his
libertarianism make for good viewing. However, his fundamental premise
that TBTF banks should be nationalized and the critical importance of 'skin in the game' for a functioning financial system
are all so crucial for the current 'do no harm' regime in which we
live. Grab a beer (or glass of wine, it is Taleb) and watch...
Via Redmond Weissenberger of the Ludwig von Mises Institute Of Canada,
A must see interview with Nassim Taleb
Via Redmond Weissenberger of the Ludwig von Mises Institute Of Canada,
A must see interview with Nassim Taleb
Nassim Nicholas Taleb is a former trader and
hedge fund manager, a best-selling author, and a ground-breaking
theorist on risk and resilience.
Etichette:
Austrian School,
Black Swan,
Capitalism,
Central Bank Policy,
Credit Expansion,
crisis,
financial system,
Nassim Taleb
Government Promises Are Hallucinatory Drugs.
Here is the first political jingle I ever heard.
I have repeatedly returned to the theme that all welfare schemes are paid for in the present. You cannot get something for nothing. There is no such thing as a free lunch. The resources that are used to fund every government program are extracted in the present from asset owners, and then these assets are transferred to new owners. The losses are borne in the present by the people who pay taxes to the government. Their taxes are then used to finance government spending. The losses that are sustained by those from whom the money is taken are offset politically by the benefits gained by the recipients of money sent to them by the government. This transfer of wealth is inescapable. It is inescapably a cost borne in the present.
"They promise you the sky.It was sung by a quartet at the 1952 national convention of the Democratic Party. If you substitute the word "political" for "Republican," you get the right idea.
They promise you the earth.
But what's a Republican promise worth?
Don't let them take it away!"
I have repeatedly returned to the theme that all welfare schemes are paid for in the present. You cannot get something for nothing. There is no such thing as a free lunch. The resources that are used to fund every government program are extracted in the present from asset owners, and then these assets are transferred to new owners. The losses are borne in the present by the people who pay taxes to the government. Their taxes are then used to finance government spending. The losses that are sustained by those from whom the money is taken are offset politically by the benefits gained by the recipients of money sent to them by the government. This transfer of wealth is inescapable. It is inescapably a cost borne in the present.
Etichette:
Austrian School,
Central Bank Policy,
Ponzi scheme
Regime Uncertainty and the Fallacy of Aggregate Demand
In a recent New York Times column, economist Paul Krugman once again took to chastising a claim he has infamously dubbed the “confidence fairy.” According to the Nobel laureate, the “confidence fairy” is the erroneous belief that ambiguity over future government regulation and taxation plays a significant role in how investors choose to put capital to work. To Krugman, the anemic economic recovery in the United States shouldn’t be blamed on this “uncertainty” but rather a “lack of demand for the things workers produce.” Being the most prominent mouthpiece for Keynesian economic policy in modern times, the Princeton professor represents the school’s circular thinking very well. Keynes and his followers saw most economic slumps as being the result of insufficient spending. A slowdown in spending means the animal spirits aren’t so aggressive in their lust for immediate consumables.
Etichette:
aggregate demand,
Austrian School,
Bernanke,
Central Bank Policy,
Central Planning,
collapse,
ECB,
FED,
financial education,
Keynesianism
Tuesday, January 22, 2013
Some Additional Reflections on the Economic Crisis and the Theory of the Cycle
by Jesus Huerta de Soto
The four years that have passed since the world financial crisis and subsequent economic recession hit have provided Austrian economists with a golden opportunity to popularize their theory of the economic cycle and their dynamic analysis of social conditions. In my own case, I could never have imagined at the beginning of 1998, when the first edition of my book Money, Bank Credit, and Economic Cycles appeared, that 12 years later, due undoubtedly to a financial crisis and economic recession unparalleled in the world since the Great Depression of 1929, a crisis and recession which no other economic paradigm managed to predict and adequately explain, my book would be translated into 14 languages and published (so far) in nine countries and several editions (two in the United States and four in Spain). Moreover, in recent years I have been invited to and have participated in many meetings, seminars, and lectures devoted to presenting my book and discussing its content and main assertions. On these occasions, some matters have come up repeatedly, and though most are duly covered in my book, perhaps a brief review of them is called for at this time. Among these matters, we will touch on the following:
Etichette:
Austrian School,
banks,
Books,
Central Bank Policy,
Central Planning,
Credit Expansion,
ECB,
Federal Reserve,
GDP,
Gold and Silver,
gold market,
hyperinflations,
Jesus Huerta de Soto
Why Is There a Euro Crisis?
by Philipp Bagus
Today's banks are not free-market institutions. They live in a symbiosis with governments that they are financing. The banks' survival depends on privileges and government interventions. Such an intervention explains the unusual stock gains. On Wednesday night, an EU summit had limited the losses that European banks will take for financing the irresponsible Greek government to 50 percent. Moreover, the summit showed that the European political elite is willing to keep the game going and continue to bail out the government of Greece and other peripheral countries. Everyone who receives money from the Greek government benefits from the bailout: Greek public employees, pensioners, unemployed, subsidized sectors, Greek banks — but also French and German banks.
Etichette:
Austrian School,
Central Planning,
deflation,
Fractional Reserve Banking,
Inflation,
Philipp Bagus
Tuesday, January 8, 2013
Keynesian Economics vs. Austrian Economics
Keynesian Economics & Monetary Economics vs. Austrian Economics
Featuring Ben Bernanke, Paul Krugman, Peter Schiff, and Ron Paul
Etichette:
Austrian School,
Ben Bernanke,
Dollar Bubble,
ECB,
FED,
hyperinflations,
Inflation,
Keynesian Economics,
Paul Krugman,
Peter Schiff,
Ron Paul
Sunday, January 6, 2013
The Myth of the Failure of Capitalism
[This essay was originally published as "Die Legende von Versagen des Kapitalismus" in Der Internationale Kapitalismus und die Krise, Festschrift für Julius Wolf (1932)]
The nearly universal opinion expressed these days is that the economic crisis of recent years marks the end of capitalism. Capitalism allegedly has failed, has proven itself incapable of solving economic problems, and so mankind has no alternative, if it is to survive, then to make the transition to a planned economy, to socialism.
This is hardly a new idea. The socialists have always maintained that economic crises are the inevitable result of the capitalistic method of production and that there is no other means of eliminating economic crises than the transition to socialism. If these assertions are expressed more forcefully these days and evoke greater public response, it is not because the present crisis is greater or longer than its predecessors, but rather primarily because today public opinion is much more strongly influenced by socialist views than it was in previous decades.
Etichette:
Austrian School,
Capitalism,
crisis,
debt us,
deflation,
ECB,
FED,
GDP,
Inflation,
Ludwig von Mises,
Quantitative Easing,
Socialism
Friday, January 4, 2013
Promises Will be Broken
By Bill Bonner
When wealth was easy to identify and easy to control — that is, when it was mostly land — a few insiders could do a fairly good job of keeping it for themselves. The feudal hierarchy gave everybody a place in the system, with the insiders at the top of the heap.
But come the industrial revolution and suddenly wealth was accumulating outside the feudal structure. Populations were growing too…and growing restless. The old regime tried to tax this new money, but the new ‘bourgeoisie’ resisted.
“No taxation without representation,” was a popular slogan of the time. The outsiders wanted in. And there were advantages to opening the doors.
Rather than a small clique of insiders, the governments of the modern world count on the energy of the entire population. This was the real breakthrough of the French Revolution and its successors. They harnessed the energy of millions of citizens, who were ready to be taxed and to die, if necessary, for the mother country. This was Napoleon’s secret weapon — big battalions, formed of citizen soldiers. These enthusiastic warriors gave him an edge in battle. But they also ushered him to his very own Waterloo.
Napoleon Bonaparte himself was an outsider. He was not French, but Corsican. He didn’t even speak French when he arrived in Toulon as a boy.
When wealth was easy to identify and easy to control — that is, when it was mostly land — a few insiders could do a fairly good job of keeping it for themselves. The feudal hierarchy gave everybody a place in the system, with the insiders at the top of the heap.
But come the industrial revolution and suddenly wealth was accumulating outside the feudal structure. Populations were growing too…and growing restless. The old regime tried to tax this new money, but the new ‘bourgeoisie’ resisted.
“No taxation without representation,” was a popular slogan of the time. The outsiders wanted in. And there were advantages to opening the doors.
Rather than a small clique of insiders, the governments of the modern world count on the energy of the entire population. This was the real breakthrough of the French Revolution and its successors. They harnessed the energy of millions of citizens, who were ready to be taxed and to die, if necessary, for the mother country. This was Napoleon’s secret weapon — big battalions, formed of citizen soldiers. These enthusiastic warriors gave him an edge in battle. But they also ushered him to his very own Waterloo.
Napoleon Bonaparte himself was an outsider. He was not French, but Corsican. He didn’t even speak French when he arrived in Toulon as a boy.
Etichette:
Austrian School,
Bill Bonner,
Central Bank Policy,
deflation,
ECB,
FED,
Fiscal Cliff,
GDP,
Ponzi scheme
Tuesday, January 1, 2013
The year 2012 in perspective
by sibileau.com
“…If you tax a nation to death, destroy its capital markets, nourish its unemployment, condemn it to an expensive currency and give its corporations liquidity at stupidly low costs you can only expect one outcome: Defaults….”
Click here to read this article in pdf format: December 9 2012
Today, I want to summarize what we
covered over the year. During 2012, I sought to address both theory and
market developments. Under an Austrian approach, I discussed many
macroeconomic topics: the effect of zero interest rates, the myth of decoupling (between the US and the Euro zone), collateralized monetary systems (as imposed by the European Central Bank), the technical (but not realistic) possibility of a smooth exit from the Euro zone, the destruction of the capital markets by financial repression, the link between the futures, repo and gold markets and consumer prices (I don’t like the word “consumer prices”, but it is better than speaking of a “price level”), insider trading, circular reasoning in mainstream economics, high-frequency trading, what can precipitate the end game to this crisis, the technicalities of a transition to a gold standard, the conditions for a successful implementation of the gold standard, and the flawed logic behind the Chicago plan, as proposed by Benes & Kumhof.
Let’s now briefly follow up on each of the market themes I covered in 2012:
1.-There has been no decoupling: The Euro zone is coupled to the US dollar zone
At the end of 2011, when the collapse of
the banking system in the Euro zone (courtesy of M. Trichet) was
dragging the rest of the world, the Swiss National Bank established a
peg on the Franc to the Euro and the Federal Reserve extended and
cheapened its currency swaps with the European Central Bank. These two
measures –indirectly- coupled the fate of the assets in the balance
sheets of the Euro zone banks to the balance sheets of the central banks
of Switzerland and the US.
Etichette:
Austrian School,
Central Bank Policy,
European Union,
FED,
Gold and Silver,
gold market,
Gold Standard
What causes hyperinflations and why we have not seen one yet: A forensic examination of dead currencies
by mises.ca
As anticipated in my previous letter, today I want to discuss the topic of high or hyperinflation: What triggers it? Is there a common feature in hyperinflations that would allow us to see one when it’s coming? If so, can we make an educated guess as to when to expect it? The analysis will be inductive (breaking with the Austrian method) and in the process, I will seek to help Peter Schiff find an easy answer to give the media whenever he’s questioned about hyperinflation. If my thesis is correct, three additional conclusions should hold: a) High inflation and high nominal interest rates are not incompatible but go together: There cannot be hyperinflation without high nominal interest rates, b) The folks at the Gold Anti-Trust Action Committee will eventually be out of a job, and c) Jim Rogers will have been proved wrong on his recommendation to buy farmland.
(Before we deal with these questions, a quick note related to my last letter: A friend pointed me to this article in Zerohedge.com, where the problem on liquidity being diverted back to shareholders in the form of share buybacks and dividends was exposed, before I would bring it up, on my letter of March 4th. )
A forensic analysis on dead currencies
When I think of hyperinflation, I think of dead currencies. They are the best evidence. There is a common pattern to be found in every one of them and no, I am not talking of six-to-eight-figure denomination bills or shortages of goods. These are just symptoms. Behind the death of every currency in modern times, there has been a quasi-fiscal deficit causing it. Thus, briefly, when someone asks: What causes hyperinflations? The answer is: Quasi-fiscal deficits! Why have we not seen hyperinflation yet? Because we have not had quasi-fiscal deficits!What is a quasi-fiscal deficit?
A quasi-fiscal deficit is the deficit of a central bank. From Germany to Argentina to Zimbabwe, the hyper or high inflationary processes have always been fueled by such deficits. Monetized fiscal deficits produce inflation. Quasi-fiscal deficits (by definition, they are monetized) produce hyperinflation. Remember that capital losses due to the mark down of assets do not affect central banks: They simply don’t need to mark to market. They mark to model.
Etichette:
Austrian School,
Central Bank Policy,
ECB,
Euro,
FED,
Gold and Silver,
hyperinflations,
Inflation,
Jim Rogers
Friday, December 28, 2012
"fraud. why the great recession" (official documentary)
Free markets are not to be blamed for the Great Recession. On the contrary, its origins rest upon the deep government and central bank intervention in the economy. Through fraudulent mechanisms, this causes recurrent boom and bust cycles: bad policies create phases of irrational exuberance, which are then followed by economic recessions, a result that every citizen ends up suffering from.
Etichette:
Austrian School,
Central Bank Policy,
collapse,
Commodities,
crisis,
debt us,
deflation,
Documentaries,
FED,
Gold and Silver,
Jesús Huerta de Soto,
Ludwig von Mises
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