Monthly Archive: April 2023

What If the Dollar Falls?

2023-04-14

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2023-04-14

The past few weeks, major countries have been moving away from the US dollar, raising doubts about the dollar’s long-dominant role in the world. Eight weeks ago, it was just pariah nations like Iran or Russia trying to de-dollarize. Now it’s Brazil, France, even Saudi Arabia—the lynchpin of the decades-long “petrodollar” arrangement. If the dollar does lose its position as the global reserve currency, it will be catastrophic for the American...

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Hawkish ECB Comments Boost Risk of a 50 bp Hike Next Month

2023-04-14

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2023-04-14

Overview: The 0.5% decline in US March producer prices pushed on the door opened by the softer-than-expected CPI on Wednesday. The Fed funds futures market sees the year end rate to a 4.33%, while still pricing in a nearly 70% chance of a hike on May 3 to 5.25%. The dollar tumbled to new lows for the year against the euro, sterling, and Swiss franc. The Dollar Index made a new low for the year today, a few hundredths of an index point below the low...

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Why Do Most Countries Have their Own Currency? Governments Wanted It that Way.

2023-04-13

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2023-04-13

Among the many facts of modern life that are accepted without question by most ordinary people is that it is somehow perfectly natural, expected, and unremarkable that every sovereign state should have its own currency. We see this everywhere in names such as "the U.S. dollar" or "the Chinese yuan" or "the Japanese yen." Indeed, among the 203 sovereign states of the world, there are nearly as many separate national...

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Why Do Banks Still Fail?

2023-04-13

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2023-04-13

As we know, Silicon Valley Bank (SVB) was taken over by the Feds after a bank run. Despite assurances from SVB that they were sound, they obviously failed to understand their precarious situation. Based on SVB’s balance sheet, it was technically insolvent. The regulators shut it down and pondered what to do next. A bank run? How could this happen in modern financial America? Doesn’t the government (the Fed and the Federal Deposit Insurance...

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Peace is Breaking Out in the Middle East…and Washington is Not Happy!

2023-04-13

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2023-04-13

While we were being distracted by the ongoing Russia/Ukraine war – and Washington’s increasing involvement in the war – tremendous developments in the Middle East have all but ended decades of US meddling in the region. Peace is breaking out in the Middle East and Washington is not at all happy about it! Take, for example, the recent mending of relations between Saudi Arabia and formerly bitter adversaries Iran and Syria. A China-brokered deal...

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US Dollar Slumps and China Surprises with Twice the Expected Trade Surplus

2023-04-13

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2023-04-13

Overview:  The market took US short-term rates and the dollar lower after the CPI data, which was largely in line with expectations. On the one hand, the odds of a quarter-point hike next month increased slightly (73.6% vs. 71.6%) to 5.25%, but it reinforced that sense that it is last hike and that the Fed will unwind this hike and more before the end of the year. The year-end implied policy rate fell by about six basis points to 4.33%. The dollar...

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Facing the World at 18

2023-04-13

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2023-04-13

My grandson will graduate from a public school in May, and my daughter, his mom, asked me to write a senior letter for him. He’s been part of my life since he was born, and we’re all very proud of him. But what do I tell him about the world he’s about to enter? Right off he already knows his life itself has a claim on it by the State. If he fails to register for the draft, he could be sent to prison and fined $250,000. With enlistments falling off...

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Swiss Central Bank Payment Vision Outlining Focus on DLT, Tokenization and Instant Payments

2023-04-13

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2023-04-13

The Swiss National Bank (SNB) has shared how it intends to “future-proof” the domestic payment ecosystem, outlining its ambition to leverage technologies and processes including tokenization and distributed ledger technology (DLT) to establish an “efficient, reliable and secure ecosystem” that’s geared towards “the future of cashless payments in Switzerland,” SNB governing board member, Andréa Maechler, said during an event on March 30, 2023. The...

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Bitcoin 2023

2023-04-12

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2023-04-12

Come visit the Mises Institute's booth at Bitcoin 2023! Join thousands in Miami Beach, FL for the world's biggest annual celebration of Bitcoin. The conference will start Thursday, May 18 and conclude Saturday, May 20.  Buy event tickets here, and be sure to use the discount code MISESB23 at checkout to receive 10% off your registration.

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Peak EV: Electric Vehicles Will Fade as Their True Costs Become Clear

2023-04-12

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2023-04-12

“On Wednesday, the Environmental Protection Agency plans to announce tough new tailpipe emission standards designed to effectively force the auto industry to phase out the sale of gas-powered cars,” reports The Verge, with the provocative headline “The End Is Nigh for Gas-Powered Cars.” Environmental, social, and corporate governance (ESG) is the newest religion, and we all know who the practitioners are. Electric vehicle (EV) owners sing...

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How the Woke Left Is Destroying Education

2023-04-12

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2023-04-12

For decades, providing students with the highest quality of education was a key objective in many countries because doing so would facilitate scientific progress and innovation, support social and economic development, and raise living standards. In recent years, however, the woke Left has garnered an increasingly prominent role in the education systems of many Western countries, and its adherents have been significantly altering many of the...

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Professor Shawn Ritenour: The Vital Role Of The Entrepreneur In Economic Development

2023-04-12

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2023-04-12

Entrepreneurship is well-defined in economics, and well-recognized as the engine that drives economic growth. That means people enjoying greater well-being, including but not limited to material prosperity. But economic growth can be uneven. Some countries, some regions, and even some firms do not generate the same levels of economic growth as others. How do we understand this variability? We look for what holds entrepreneurship back....

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Do We Need a “National Divorce”? It’s Not a New Idea

2023-04-12

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2023-04-12

News reports have been studded in recent weeks with talk of a “national divorce.” Georgia congresswoman Marjorie Taylor Greene has been the face of the national divorce movement, but she is hardly alone in her view that Republican and Democrat states need to go their separate ways. For example, a March poll of American adults found that 20 percent of respondents favored splitting the country up along red and blue lines. At the state level, too,...

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US CPI is Unlikely to Tell Us Anything We Don’t Already Know

2023-04-12

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2023-04-12

Overview:  Today's highlight is the March US CPI, and while everyone is talking about it, it is unlikely to tell us anything we do not already know. Headline price pressures are easing but the core rate is sticky, and despite comments from the Chicago Fed president about the need for patience, the odds of a hike next month have crept up. Understanding the Fed's reaction function, it seems clear that for most officials, inflation is remains too high...

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The World War Boom and ’46 Bust: Why War Does Not Keep Us Out of Recessions

2023-04-11

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2023-04-11

When I took my high school’s twentieth-century world history class, both the teacher and workbooks claimed repeatedly that World War II took us out of the Great Depression. Why would anyone question this? After all, unemployment went down. The US Bureau of Labor Statistics measured the unemployment rate from 1929 onward. In 1939 the unemployment rate stood at 17.2 percent. By 1942 it was at 4.7 percent, and by 1944 it was at 1.2 percent. Professor...

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The Current Farm Bill Fraud: Government as Usual

2023-04-11

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2023-04-11

The 2018 Farm Bill is due to expire this year, and US lawmakers have already begun working out the next version. This food-related omnibus bill was introduced ninety years ago as a “temporary” measure during the Great Depression. It’s been reauthorized by Congress every five years since, and recent ones cobble together two seemingly unrelated programs, the Supplemental Nutrition Assistance Program (SNAP), formerly called food stamps, and federal...

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Greenback Pares Yesterday’s Gains

2023-04-11

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2023-04-11

Overview: As the long-holiday ends, risk appetites have returned. Equities and yields are mostly higher. The dollar is seeing yesterday's gains pared. Yesterday's setback in the yen helped lift Japanese stocks, with the Nikkei advancing 1%. Several other markets in the region also gained more than 1%, including Australia and South Korea. China's CSI was an exception. It slipped fractionally. Europe's Stoxx 600 is up nearly 0.6% through the European...

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Switzerland to tax electric vehicles from 2024

2023-04-11

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2023-04-11

Vehicles imported into Switzerland are subject to a 4% tax, with the exception of electric vehicles that attract none. This week, the government decided to end the exception from the beginning of next year.

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Chapter 3: How to Do Economics

2023-04-10

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2023-04-10

Part I: Economics, Chapter 3: How to Do Economics How to Think about the Economy: A Primer. Narrated by  John Quattrucci.

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Chapter 2: Economic Theory

2023-04-10

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2023-04-10

Part I: Economics, Chapter 2: Economic Theory How to Think about the Economy: A Primer. Narrated by  John Quattrucci.

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