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Tag Archives: money supply
The Fed’s Stunning Admission Of What Happens Next
The Fed’s Stunning Admission Of What Happens Next Following an epic global stock rout, one which has wiped out trillions in market capitalization, it has rapidly become a consensus view (even by staunch Fed supporters such as the Nikkei Times) that the Fed committed a gross policy mistake by hiking rates on December 16, so much […]
Falling Interest Causes Falling Profits
FALLING INTEREST CAUSES FALLING PROFITS Most people assume that prices move as a result of changes in the money supply. Instead, let’s look at the effect of changes in interest. To start, consider a hamburger restaurant. Suppose that the average profit in the burger business is ten percent of invested capital. If MacDowell’s is thinking […]
Opinion: The banking system faces an existential threat — and it’s not bitcoin
Opinion: The banking system faces an existential threat — and it’s not bitcoin A movement in Europe would require banks to fully back deposits John Michael WrightIn 1666, King Charles II put control of the money supply into private hands. The privatization of the money-creation process gave birth to the system we use today. Christmas did […]
Central Bank Money Printing—-The Rotten Philosophy Beneath
Central Bank Money Printing—-The Rotten Philosophy Beneath If advocates of freedom were to make up a list of New Year’s resolutions for 2016, one of the most important items should be ending government’s monopoly control over money. In a free society, people in the marketplace should decide what they wish to use as money, not […]
Who Owns the Federal Reserve Bank and Why is It Shrouded in Myths and Mysteries?
Who Owns the Federal Reserve Bank and Why is It Shrouded in Myths and Mysteries? “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” — Henry Ford “Give me control of a Nation’s […]
The Velocity of the American Consumer
The Velocity of the American Consumer I was reading something yesterday by my highly esteemed fellow writer Charles Hugh Smith that had me first puzzled and then thinking ‘I don’t think so’, in the same vein as Mark Twain’s recently over-quoted quote: “It ain’t what you don’t know that gets you into trouble. It’s what […]
Money Velocity Is Crashing–Here’s Why
Money Velocity Is Crashing–Here’s Why The inescapable conclusion is that Fed policies have effectively crashed the velocity of money. That the velocity of money has been crashing while the money supply has been exploding doesn’t seem to bother the mainstream pundits. There is always a fancy-footwork explanation of why whatever is crashing no longer matters. Take […]
What Deflation Quacks Like
What Deflation Quacks Like As yet another day of headlines shows, see the links and details in today’s Debt Rattle at the Automatic Earth, deflation is visible everywhere, from a 98% drop in EM debt issuance to junk bonds reporting the first loss since 2008 to corporate bonds downgrades to plummeting cattle prices in Kansas to […]
US Stock Market – An Accident Waiting to Happen
US Stock Market – An Accident Waiting to Happen Monetary Inflation Becomes Less Supportive of Asset Prices We have recently discussed the sorry state of the junk bond market, as well as the noteworthy decline in the annual growth rate of US money supply aggregates. The latter has finally manifested itself not only in terms of narrow monetary […]
Money Supply Versus Money Demand
Money Supply Versus Money Demand According to popular thinking not every increase in the supply of money will have an effect on economic activity. For instance, if an increase in supply is matched by a corresponding increase in the demand for money then there won’t be any effect on the economy. The increase in the […]
Can the Fed Print Money?
Can the Fed Print Money? Every morning is the dawn of a new error – Anonymous It Can and it Does In light of the upcoming October Fed (non-)decision, we want to briefly revisit a subject that still appears to be causing some confusion. We most recently encountered this confusion again in a quarterly update by […]
Neither Bull nor Bear
Neither Bull nor Bear “Good Economic Management” vs. Larceny “Will you shut up?!” That is what we wanted to say this morning, here in Zurich, Switzerland. At the table next to us, a hedge fund promoter is working hard… “The value proposition… outside of the box… we’re only talking two points… we can dialogue about […]
EU Moloch in a Fresh Bid to Inflate
EU Moloch in a Fresh Bid to Inflate Brussels Alters Capital Requirements to “Spur Lending” Saints preserve us, the central planners in Brussels are giving birth to new inflationist ideas. Apparently the 2008 crisis wasn’t enough of a wake-up call. It should be clear by now even to the densest observers that a fractionally reserved […]
