Why “The Fed Can’t Save Us”: The Simple Explanation From Austrian Business Cycle Theory

By Robert P. Murphy of Mises Institute The Fed Can’t Save Us In December, the Fed hiked its target for the federal funds rate, which is the interest rate banks charge each other for overnight loans of reserves. Since 2008 the Fed’s target for the Fed Funds Rate had been a range of 0 percent – 0.25 percent (or what is referred to as zero to 25 “basis points”). But last month they moved that target range up to 0.25 – 0.50 percent. Ending a seven-year period of effectively zero percent interest rates. From our vantage point, we already see carnage in the financial markets, with the worst opening week in US history. This of course lines up neatly with standard Austrian business cycle theory, which says that the central bank can give an appearance of prosperity for a while with cheap credit, but that this only sets the […] Read More

Hillary’s Scary New Cash Tax

Submitted by Brian Hunt via InternationalMan.com, Have you heard of “negative interest rates”? It’s become a phenomenon with economists and the media. There’s a good chance you’ve read an article about it. We’ve covered it many times in the Dispatch. I’m writing to tell you something about negative interest rates you haven’t heard. You certainly won’t hear about it in the mainstream press. What’s coming at you is a historic event. It’s something our grandchildren will hear stories about…much like the Great Depression or the Cold War. What’s coming could send the price of gold much higher in the coming years…and hand gold stock owners 500%+ gains. If you know what’s coming, it could mean the difference between having lots of free cash in retirement or barely getting by. To understand the gravity of this moment, let’s cover one of the most bizarre ideas in the world… negative interest […] Read More

“Cornering The Earth” – How The Rothschilds “Controlled At Least One Third Of Global Wealth” Over 100 Years Ago

One week ago we presented the prophetic work of Alfred Owen Crozier who in 1912 penned “U.S. Money vs Corporation Currency” in which, together with 30 illustrations that captured Wall Street precisely as it would turn out some 103 later year, he explained why the the “Aldrich Plan” proposal, infamously crafted in secrecy by a small group of bankers and their bought politicians on Jekyll Island to establish a National Reserve Association, a money printing-predecessor to the Federal Reserve, would lead to untold pain, suffering ans war. The Aldrich Plan was defeated only to bring the Federal Reserve Act of 1913, and the most deadly 30-year period of warfare in human history. And while we urge everyone to read the Crozier’s book for its profound insight, and its painful reminder that even in the “New Normal” there is absolutely nothing new, as everything that has happened was foretold over […] Read More

Keynesian Shangri-La From Myth To Reality

Authored by Mark St.Cyr, In less than the time it takes for a chrysalis to release one of life’s remarkable transformations, many once called “capitalists” woke to find the world they once new changed into something only dreamed or told in folklore. Where business models resembling unicorns abounded along with rainbows in their resembling equivalent of over-arching ETF’s. All available in a multitude of hues and proportions so plentiful: It was hard for one not to well up when contemplating. For in this new fairytale land there must certainly be a pot of gold at the end of every “rainbow.” However, one would be mistaken. For one must remember this is a “Keynesian Shangri-la” and gold here is useless. (insert choir music here) Today, at the end of these self propagated rainbows lies a Central Bank ready and willing to print as much money as one needs to see […] Read More

The Experiment that Will Blow Up the World

Submitted by Pater Tenebrarum via Acting-Man blog, The BoJ Goes Even Crazier It has been clear for a while now that the lunatics are running the asylum in Japan, so perhaps one shouldn’t be too surprised by what happened overnight. Bloomberg informs us that “Kuroda Jolts Markets With Assault on Deflation Mindset”. The policy hasn’t worked so far, in fact, it demonstrably hasn’t worked in Japan in a quarter of a century. Therefore, according to the Keynesian mindset, we need more of it. Mr. Kuroda therefore delivered a surprise spiking of the punchbowl that immediately impoverished Japan’s consumers further by causing a sharp decline in the yen: “Today’s decision to expand Japan’s monetary stimulus may be regarded as shock treatment in the central bank’s effort to affect confidence levels. Bank of Japan Governor Haruhiko Kuroda’s remedy to reflate the world’s third-largest economy through influencing expectations saw the yen sliding and […] Read More

When Money Dies: Germany and Paper Money After 1910

Submitted by Marcia Christoff-Kurapovna via The Ludwig von Mises Institute, The story of the destruction of the German mark during the hyper-inflation of Weimar Germany from 1919 to its horrific peak in November 1923 is usually dismissed as a bizarre anomaly in the economic history of the twentieth century. But no episode better illustrates the dire consequences of unsound money or makes a more devastating, real-life case against fiat-currency: where there is no restraint, monetary death will follow.  “It matters little that the causes of the Weimar inflation are in many ways unrepeatable; that political conditions are different, or that it is almost inconceivable that financial chaos would ever again be allowed to develop so far,” wrote British historian and MP Adam Fergusson in his 1975 classic, When Money Dies. “The question to be asked — the danger to be recognized — is how inflation, however caused, affects a […] Read More

Gold And What The High Priests Of Funny Money Don’t Want You To Know

Steve Forbes has had enough of the Federal Reserve and its “sinning” policies to undermine the dollar. In this brief interview with Birch Gold Group, the publisher and CEO of Forbes, Inc. exposes the damage that the central bank has created, “Bernanke was a disaster…has totally mucked up the credit markets.” Blasting Janet Yellen “who needs to go to re-education camp,” Forbes explains why he believes so strongly in the gold standard, and the one single scenario under which he would ever sell his gold.     Rachel Mills for Birch Gold Group (BGG): I am so glad to be talking with Steve Forbes, here at FreedomFest. My name is Rachel with Birch Gold Group. Can you talk a little bit about the Federal Reserve printing money these days. And the Federal Reserve recently announced that they have decided to stop printing money by October. Do you think that […] Read More

“There Is No Honest Pricing Left” – The Epochal Error Of Modern Central Banking

Submitted by David Stockman of Contra Corner blog, David Stockman, Director of the Office of Management and Budget under Reagan, former Congressman, and author of the bestseller The Great Deformation: The Corruption of Capitalism in America, discusses his book, the gold standard, bailouts, and the problems the American economy faces today. Mises Institute: In the book, you oppose Bernanke’s view of the Great Depression, which you point out relies heavily on the views of Milton Friedman. David Stockman: Bernanke has cultivated this idea that he is a brilliant scholar of The Great Depression, but that’s not true at all. What Bernanke did was basically copy Milton Friedman’s misguided and very damaging theory that the Federal Reserve didn’t expand its balance sheet fast enough by massive open market purchases of government debt during the Great Depression. Bernanke therefore claimed that monetary stringency deepened and lengthened the depression, but in fact interest […] Read More

Are The Swiss Going Crazy? $25 Minimum Wage Referendum In May

Submitted by Pater Tenebrarum of Acting-Man blog, Most of our readers probably know what we think of minimum wages, but let us briefly recapitulate: there is neither a sensible economic, nor a sensible ethical argument supporting the idea. Let us look at the economic side of things first: for one thing, the law of supply and demand is not magically suspended when it comes to the price of labor. Price it too high, and not the entire supply will be taken up. Rising unemployment inevitably results. However, there is also a different way of formulating the argument: the price of labor must not exceed what the market can bear. In order to understand what this actually means, imagine just for the sake of argument a world without money. Such a world is not realistic of course, as without money prices the modern economy could not exist. However, what we […] Read More

2007: How Far Will the Crash Go and What Do we Do Now?

The Crash of 2007-8??? is underway By Richard C. Cook Global Research, August 18, 2007 The immediate triggers are being described quite well: the collapse of the U.S. subprime mortgage market; the vulnerability of the rest of the economy to the subprime undertow, due to the efficiency??? of the markets in spreading risk; the worldwide overextension of cheap credit; the failure of large institutional investors and Wall Street brokerages to behave responsibly; and the long-term effects of the U.S. trade and fiscal deficits which are now coming home to roost. Amazingly, some commentators have been asking if the monetary crisis will affect the producing economy,??? and whether a recession lies ahead. In reality, the U.S. producing economy has been in a recession for the last year. This is shown most clearly by the decline in M1, the portion of the money supply immediately available to people for making purchases. […] Read More