The Trillion Dollar Coin

There has been much buzz in the past few days about a truly horrible idea.  Instead of having to negotiate with Congress to raise the debt ceiling so the Treasury Department can sell more bonds to pay for more spending, why not just mint a trillion-dollar platinum coin?  This coin would contain one ounce of [...]

EmailPrintFriendlyShare

Bernanke Loosens Up

This excellent article by Austrian theory economist Frank Shostak appeared Friday on Mises.org. — JH

Bernanke Loosens Up

December 21, 2012

On Wednesday December 12, 2012 Fed policy makers announced that they will boost their main stimulus tool by adding $45 billion of monthly Treasury purchases to an existing program to buy $40 [...]

EmailPrintFriendlyShare

The Terminator

“Our Russian psychosis has two curious features. Firstly, that an 80 per cent Christian Orthodox society for some reason reacts to a Mayan calendar which no one has ever seen. And secondly, that the end of the world is perceived as an economic crisis that can be survived on the banal [...]

EmailPrintFriendlyShare

The Curse Of The Reserve Currency

Is reserve currency status an economic blessing or a curse? The answer might seem obvious, as reserve currencies have been shown to confer lower borrowing costs on their issuers. But what of the borrower who, enticed by low interest rates, borrows more than they can pay back? Naturally the result will be a default. However, [...]

EmailPrintFriendlyShare

Wheelbarrows

“Sir, What could be more appropriate than rebranding euro bank notes with Europa* to improve security? The euro’s strength is a myth and its bosses’ attempted seduction is all bull.”

- Clark McGinn, Dublin 4, Ireland, in a letter to the Financial Times, 10.11.2012.

*Europa, in Greek mythology, after [...]

EmailPrintFriendlyShare

Par For The Pathological Course

Economic policymakers are like children in that they are held only partially accountable for their mistakes and misdeeds. And just as children learn to selectively deny responsibility to get away with naughty behaviour, so policymakers learn that they, too, can conveniently disown the ‘unintended consequences’ of their actions. It is thus refreshing to see that [...]

EmailPrintFriendlyShare

The Greatest Trick

“I believe in an America where millions of Americans believe in an America that’s the America millions of Americans believe in. That’s the America I love.”

-     US Presidential Candidate Mitt Romney.

 Never try to teach a pig to sing, advised Robert Heinlein. It wastes your time and it [...]

EmailPrintFriendlyShare

Volcker Appears to Dislike QE 3

Tall Paul Volcker and Jeff Harding agree (per The Telegraph): 

QE3 will not fix America’s problems Paul Volcker, the former Federal Reserve chairman credited with taming the inflationary threat of the 1970s, has warned that further quantitative easing will fail to repair economies in Europe and the US.

Mr Volcker, addressing a conference at Gleneagles in Scotland, [...]

EmailPrintFriendlyShare

The Fed Panicked

Here is the Fed Open Market Committee’s announcement of November 25, 2008 announcing the implementation of QE1, a $600 billion bond purchase program:

This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial [...]

EmailPrintFriendlyShare

Bad Advice More Popular Than Ever

A BOOK advising married women to have affairs has sparked renewed interest in really bad advice. Experts say Catherine Hakim’s The New Rules of Marriage, which claims that having affairs makes relationships stronger, shows a demand for self-help advice that is not merely trite but actively harmful.

EmailPrintFriendlyShare

An Inflation Inflection and the Best Trillion We Shouldn’t Spend

In the 1960s, Valéry Giscard d’Estaing, then the French Minister of Finance, coined the term “exorbitant privilege” to refer to the special benefits enjoyed by the USA by virtue of the fact that it is the issuer of the world’s reserve currency.

Most Americans remain largely unaware of what these short-term benefits are and the [...]

EmailPrintFriendlyShare