Soft Landing

The Dangerous Myth of a “Soft Landing”

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Despite elevated inflation, the United States government is spending more than ever, which means consuming more units of issued currency. Tim Congdon at the Institute of International Monetary Research shows how the inflationary burst was directly linked to broad money growth due to rising government deficit spending. Market participants and economists like to believe that the central bank will manage the economy as if it were a car. The current optimism about the U.S. economy reminds us of the same sentiment in 2007 when no one seemed to worry about rising imbalances.

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Jordan Peterson on China's Social Credit System

The Crux of China’s Problems

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China is risking more than a real estate collapse. China has turned its back on what created the Chinese Economic Miracle in the first place. Everyone is pontificating about China’s real estate bubble and whether Chairman Xi will do enough to stimulate the economy. Even though the media admits that so far a loose monetary policy hasn’t helped, they still believe that more of the magic cure-all monetary elixir will somehow eventually work.

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BRICS Common Currency

Will a New BRICS Currency Dethrone the U.S. Dollar?

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At their 2023 summit in South Africa, BRICS countries committed to study the feasibility of a new common currency. Russia is especially interested in alternatives to the Dollar since his invasion of the Ukraine resulted in the Dollar, SWIFT, and international finance was used as a weapon against Russia. In today’s article Daniel Lascalle looks at the viability of an alternative BRICS currency.

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European Energy Crisis

The European Energy Crisis May Be Back Soon

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Unfortunately, the European Union bureaucrats declared the end of the energy crisis as if it were the result of decisive policy action, but the reality is that the energy problem in the EU was only diminished by purely external factors: a very mild winter and the decline in global commodity prices due to the central bank rate hikes. Thus, the energy crisis remains, and the problems of security of supply and affordability of the system persist.

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Maui Wildfire

What Made Maui’s Lahaina Fire So Deadly?

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To review, a power company shielded from competition by the state placed electrical infrastructure among highly flammable state-owned grass fields above the historic city of Lahaina, which the government was twice warned were highly susceptible to fire. And once a fire broke out, a combination of defective water infrastructure, terrible communication by government officials, and only one escape route doomed the people of Lahaina to the worst wildfire experienced in this country in over a hundred years.

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Easy Money Printing Press

Which is Worse- Easy Money or Public Debt?

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Contrary to the popular way of thinking, the threat to the US economy is not the high level of debt but loose monetary policies that undermine the pool of savings and the wealth-generation process. Hence, the fall in the money stock that precedes price deflation and an economic slump is actually triggered by the previous loose monetary policies and not by the liquidation of debt.

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Inverted Yield Curve 2023

Deepest Yield Curve Inversion Since 1981

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Mark Thornton and Ryan McMaken discuss the current yield curve inversion. The U.S. Treasury funds deficit spending by issuing debt instruments with a range of maturities. Treasury Bills have maturities from one month to one year. Treasury Notes have maturities from two to ten years. And long-term debt is issued as Treasury Bonds with 20- and 30-year maturities. The yield curve is created by comparing interest rates between ten-year debt to 3-month debt. Logically, long-term debt should require a higher interest rate than short-term debt simply because a lot can happen in ten years so there is more uncertainty, i.e., risk.

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Crumbling Fractional Reserve Bank

Is this the End of Fractional Reserve Banking?

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In the following article Douglas French looks at the shaky Fractional Reserve Banking system that has been around since it was created by the Banking Act of 1933 (aka. the Glass-Steagall Act), which also created the Federal Deposit Insurance Corporation (FDIC). Will Fractional Reserve Banking survive to celebrate its Centennial anniversary?  Recent trends in Idaho (of all places) could spell the end of fractional reserve banking (but not the FED).

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global monetary hegemony

A Guide to Good Money

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Modern money, having now become a key tool of government economic policy and a source of massive tax revenues, has strayed far from its original purpose. This is doubly regrettable, as the better money functions at an individual level in satisfying demand for quality, the better it is for economic prosperity and freedom.
This book presents how modern money works both in the domestic economy and globally, outlining the essence of what makes good money. How does modern money differ from this ideal?

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Science vs Technology

Does Science Shape Economic Progress?

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We might think that scientific breakthroughs are necessary in order for us to have technological advancement. But as Lipton Matthews shows in this article, that isn’t necessarily the case. He says, “history has shown that science often lags technology” but “advancements in science propel technological growth.” One key concept to understanding this article is the difference between Science and Technology. The goal of Science is knowledge and understanding. But the goal of Technology is to mold the environment. Technology is the practical application of science.

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