Is deleveraging bad for the economy?
Take for instance company X, which has equity of $200. The company borrows $800 and buys an asset worth $1000. In this example we…
The gold standard and boom-bust cycles
According to some commentators on the gold standard, an increase in the supply of gold generates similar distortions that printing money out of “thin…
Why easy fiscal and monetary policies make things worse
Most experts are of the view that still-subdued economic activity requires a more aggressive stance from policy makers in order to revive the economy….
Does the trade account provide useful information?
Let us take an American individual who earns his money by exchanging something useful for it — he produces consumer goods. He then decides…
Where is the US stock market heading?
A report from America, previously published at Mises.org On Monday, August 8, the S&P 500 stock-price index fell 6.7 percent to close at 1,119.46….
Money out of “thin air”
By fulfilling the role of an intermediary, banks are an important factor in the process of real wealth formation. Banks facilitate the flow of…
What is behind the predictive power of the yield curve?
After rising to 3.33% in March, the differential between the 10-year US Treasury Note and the federal funds rate eased to 3.07% at the…
Unemployment and economic recovery
At the International Monetary Conference in Atlanta June 7, 2011 the Fed Chairman Ben Bernanke said, As is often the case, the ability and…
Is raising the debt limit good for the US economy?
U.S. Treasury Secretary Geithner said in a letter to Senator Michael Bennet, a Colorado Democrat, that a default arising from failing to raise the…
Fractional reserve banking and boom-bust cycles
In his various writings, the famous Austrian economist Murray Rothbard argued that in a free market economy that operates on a gold standard the…