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Can Constant Money Growth Rule Prevent Boom-Bust Cycles?
CAN CONSTANT MONEY GROWTH RULE PREVENT BOOM-BUST CYCLES? According to the Nobel Laureate in Economics, Milton Friedman, the key cause of the business cycles is the fluctuations in the growth rate of money supply. Friedman held that what is required for the elimination of these cycles is for central bank policy makers to aim at […]
What Does It Mean to Have Predicted an Economic Event?
What Does It Mean to Have Predicted an Economic Event? Consider the never-ending argument about whether certain economists did or did not predict the financial crisis in 2007-8. It raises all kinds of methodological questions in economics reaching back much further than Milton Friedman’s famous 1966 paper conceiving of economics as a predictive science. Here’s the fundamental conundrum: […]
The Pseudo-Psychology Behind Monetary Policy
The Pseudo-Psychology Behind Monetary Policy In his various writings, the champion of the monetarist school, Milton Friedman, argued that there is a variable time lag between changes in money supply and its effect on real output and prices. Friedman holds that in the short run changes in money supply will be followed by changes in […]
Is an Increase in Demand Key for Economic Growth?
IS AN INCREASE IN DEMAND KEY FOR ECONOMIC GROWTH? Whenever the so-called economy shows signs of weakness most experts are of the view that what is required to prevent the economy sliding into recession is to boost the overall demand for goods and services. If the private sector fails to increase its demand then it […]
The Fed’s Mandate To Pick Your Pocket – The Real Price Of Inflation
The Fed’s Mandate To Pick Your Pocket – The Real Price Of Inflation “Inflation is everywhere and always a monetary phenomenon.” – Milton Friedman This oft-cited quote from the renowned American economist Milton Friedman suggests something important about inflation. What he implies is that inflation is a function of money, but what exactly does that […]
Does it Matter Whether Assumptions in Economics are Arbitrary?
DOES IT MATTER WHETHER ASSUMPTIONS IN ECONOMICS ARE ARBITRARY? Various assumptions employed by mainstream economists appear to be of an arbitrary nature. The assumptions seem to be detached from the real world. For example, in order to explain the economic crisis in Japan, the famous mainstream economist Paul Krugman employed a model that assumes that […]
An Inflation Indicator to Watch, Part 1
An Inflation Indicator to Watch, Part 1 “Inflation is always and everywhere a monetary phenomenon.” —Milton Friedman Have you ever questioned Milton Friedman’s famous claim about inflation? Ever heard anyone else question it? Unless you read obscure stuff written for the academic community, you’re probably not used to Friedman’s quote being challenged. And that’s despite […]
The Deep State: Use an Existing Crisis, or Create One
The Deep State: Use an Existing Crisis, or Create One Rahm Emmanuel was/is (in)famous for his alleged attribution of the quote “Never allow a good crisis to go to waste.” Nevertheless, in the manner that Chaucer’s “Canterbury Tales” is an “English echo” of “The Decameron” by Giovanni Boccaccio, the quote assigned to Emmanuel is a […]
Can We Ascertain the Facts of Reality in Economics by Means of Mathematics?
CAN WE ASCERTAIN THE FACTS OF REALITY IN ECONOMICS BY MEANS OF MATHEMATICS? It is generally held that by means of statistical and mathematical methods one can organize historical data into a useful body of information, which in turn can serve as the basis for the assessments of the state of the economy. It is […]
Opinion Infected by Bias
Opinion Infected by Bias QUESTION: Marty; Why do you say your opinion is not worth much? You have been around for some time and you are the only analyst to have been behind the curtain. If anyone’s opinion carries any weight, it has to be yours. RJ ANSWER:Yes. Experience is everything. You cannot forecast something you […]
The Keynesian House Of Denial
The Keynesian House Of Denial We use the term “Keynesian” loosely to stand for economic interventionists of all schools. The followers of JM Keynes and Milton Friedman alike fit that category. So do some of the more rabid supply siders who claim the power to stimulate ultra-high economic growth with the tools of tax policy alone. The […]
Why All Central Planning Is Doomed to Fail
Why All Central Planning Is Doomed to Fail Positivist Delusions [ed. note: this article was originally published on March 5 2013 – Bill Bonner was on his way to his ranch in Argentina, so here is a classic from the archives] We’re still thinking about how so many smart people came to believe things that […]
Ben Bernanke: “Helicopter Money May Be The Best Available Alternative”
Ben Bernanke: “Helicopter Money May Be The Best Available Alternatives Now that the prospect of helicopter money by the ECB has so infuriated Germany, the ECB had to reach out to Schauble to “mollify” the Germans who are dreading the second coming of monetary paradrops in one century, it was only a matter of time before Citadel’s […]
