The Disaster of Negative Interest Policy
byThose who had hoped that things could not get worse with the monetary policy of the European Central Bank (ECB) have been proven wrong….
Economics
Do banks require savings to accommodate demand for lending?
byThere is an emerging view held by many commentators that it is banks and not the central bank that are key for the expansion…
The Ghost of Failed Banks Returns
byLast week’s failure in the US repo market might have had something to do with Deutsche Bank’s disposal of its prime brokerage to BNP,…
How fractional reserve banking contributes to increases in money supply
bySome commentators consider fractional reserve banking as a major vehicle for the expansion in the money supply growth rate. What is the nature…
How Is Negative Interest Possible?
byGermany has recently joined Switzerland in the dubious All Negative Club. The interest rate on every government bond, from short to 30 years, is…
Can boom-bust cycles emerge in a free market economy where gold is money?
byFollowing the Austrian Business Cycle Theory (ABCT), the boom-bust cycle emerges in response to a deviation in the market interest rate from the…
The shape of the yield curve and the state of the economy
byOn Wednesday August 14 2019, participants in financial markets were shocked by the news that the differential between the yield on the 10-year…
Inflationary financing and GDP
byThis article demonstrates that only government borrowing in the US and UK drives GDP growth. This surprising conclusion is confirmed by long-run statistics. GDP…
Take Shelter 2.0
by“The most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’” Ronald Reagan. “When Nobel Prize-winner…
Inflationary financing and GDP
byThis article demonstrates that only government borrowing in the US and UK drives GDP growth. This surprising conclusion is confirmed by long-run statistics. GDP…