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, [...]


Shlaes: Bernanke’s ‘Little’ Inflation Will Capsize U.S.

This article originally appeared in Bloomberg and is authored by Amity Shlaes, one of my favorite writers (see below).

A little is all right. That’s the message Federal Reserve Chairman Ben S. Bernanke has been giving out recently when asked about the evidence of inflation in the U.S. recovery.

Sometimes Bernanke doesn’t even go that far. [...]


Inflationistas vs. Deflationistas: What Does CPI and PPI Tell Us?

Inflationistas are probably confounded by Friday’s Consumer Price Index report that showed a decline of 0.2% in June. The report pins the decline, the first since June 2010, on falling energy costs. As a large component of CPI it:

declined 4.4 percent in June, the largest decline since December 2008. The gasoline index, which fell [...]


Bernanke Will Be Forced To Do QE3

Dr. Frank Shostak, an Austrian theory economist who works for MF Global, and who writes for on economics, came out with an article this week on what will happen when the Fed freezes its balance sheet in June, as they have said they will do. I very much enjoy Shostak’s writing and have [...]


The Economy Is Sliding Into A Stagflationary Spiral

This article discusses the current path our economy is taking. While most economists believe the Q1 GDP stumble was a temporary blip in an ongoing recovery, I believe it is the beginning of a downward trend of economic stagnation and inflation. The root of this is the Fed’s attempts to inflate [...]


A Note On Inflation: It’s Here

In an interesting article in the Wall Street Journal’s “Numbers Guy” column, it was pointed out that maybe the government’s reporting of price inflation is skewed to favor the government. Shocking. He notes that the government keeps fiddling with its methodology:

According to one rogue economist, John Williams at Shadow Government Statistics, if we still calculated inflation the [...]