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Olduvai III: Catacylsm
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What is Wrong With the Popular Definition of Inflation?

WHAT IS WRONG WITH THE POPULAR DEFINITION OF INFLATION? According to Mises, Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term `inflation’ to refer to […]

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What is Optimal Monetary Policy, Anyway?

WHAT IS OPTIMAL MONETARY POLICY, ANYWAY? Ever since the important contributions of new classical economists Finn E. Kydland and Edward C. Prescott during the 1970s and 80s, modern macroeconomics seeks optimal rules for monetary policy. Indeed, Milton Friedman had previously emphasized the importance of a binding rule for monetary policy. He recommended a constant but […]

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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 […]

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How Money Disappears in a Fractional-Reserve Money System

HOW MONEY DISAPPEARS IN A FRACTIONAL-RESERVE MONEY SYSTEM Most experts are of the view that the massive monetary pumping by the US central bank during the 2008 financial crisis saved the US and the world from another Great Depression. On this the Federal Reserve Chairman at the time Ben Bernanke is considered the man that […]

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Olduvai IV: Courage
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Olduvai II: Exodus
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