Mark takes a look at all the wrong predictions of recession in recent years, including those of Austrian School economists. While the MSM and Fed officials try to downplay the coming of a recession, many of the statistics and facts that Austrian consider important are indicating a looming recession, if not a full-blown economic crisis.

Check out Anatomy of the Crash: The Financial Crisis of 2020, edited by Tho Bishop: Mises.org/AnatomyOfTheCrash
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In this week’s episode, Mark explains why the market for existing homes has been diverging from the market for new houses. The Fed ZIRP, QE and Covid bailouts have locked Americans into their mortgages and low payments, reducing the supply of existing homes. This keeps them off the market and home prices high in an economy that is headed for a recession or crisis. Buyers have been diverted to newly constructed homes where builders have more flexibility to sell and there are no existing homeowners locked into mortgages.

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After a long series of rate hikes, Fed officials and asset markets are expecting a long series of interest rate cuts. This is based on the tried and hue Phillips Curve analysis. In color theory, "hue" is the technical appearance of color that can be described mechanically as a number. Let’s hope interest rate expectations are not being distorted by other factors of reality, and that current Phillips Curve model perceptions of hue are also true.

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Bank reserves are seldom mentioned except in cases of bank runs. The other possible mention is all the interest money the Fed pays to banks simply for holding reserves. Mark explains the role of bank reserves in the current "system" and gives a brief explanation of why the Austrian view is better and actually gets the job done.

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Mark discusses something bigger than the Disney layoffs: the Wall Street Journal’s April 25 frontpage article on investing in gold. It would seem that the recent rise of the price of gold is the result of tired, dumb, and disillusioned crypto currency investors throwing in the towel to "chase shiny new object—gold." Mark explains that the rational reasons for investing in gold loom larger than the entire Magic Kingdom!

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Mark looks at the price of Apple stock—one of the best performing stocks over the last quarter century, and one of the largest holdings in stock indexes, mutual funds, and Berkshire Hathaway portfolio. Market watchers have kept a keen eye on Apple as it heads for a new all-time high; but, Mark is concerned that a downturn would have a huge ripple effect on the overall market—possibly equivalent to a tsunami. 

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Mark takes a look at the good news on price inflation and why it is better than reported, but probably short-lived. Other statistics are worsening and, amazingly, even landlords are starting to feel the pain!

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This episode explores precious metals. Gold (Au) is the main precious metal, followed by Silver (Ag), Platinum (Pt), and Palladium (Pd). These are distinct from valuable industrial metals such as copper (which served as money historically), nickel, and zinc, which have served as token coins in modern times. There are many different ways and forms you can own precious metals.

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Mark is not fooling around today. He looks back at the history of gold and its price, which some believe is too erratic and too unstable (like Bitcoin) to serve as a basis of a monetary system. Mark shows that it is not gold that destabilizes events in the real world, but rather real world events related to political decision-making that has made the price of gold unstable. The price of gold is a "minor" indicator of what governments are really up to.

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In this episode, Mark looks at the far away minor issue of the impact of hyperinflation in Zimbabwe. Even though they have switched from Zim dollars to US dollars, ordinary people are still suffering. Their government and its inflationary monetary policy is manifesting itself in some interesting ways.

Be sure to follow Minor Issues at Mises.org/MinorIssues.

SVB Bank and Signature Bank failed this week and were bailed out. Mark explains why the banks failed and why it was bound to happen. The minor issue is that the total FDIC bailout fund is actually smaller than either one of the banks.

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Mark discusses how the Federal Reserve and Covid restrictions greatly increased the price of cardboard boxes; but, with online sales softening, we should expect suppliers to shift the raw materials used to make boxes (wood pulp) into the production of other paper goods, such as toilet paper. Because our demand for toilet paper is relatively inelastic, we should see a decline in the price of toilet paper and better availability.
The market will reallocate toward consumer wants and lower prices.

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Mark talks about the recent price inflation reports, as well as reports of job openings from private sector job placement companies. Inflation was higher than expected and job openings declined. What will the Fed do? People are making painful adjustments—Domino’s reported disappointing sales, because their customers are "eating in".
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Mark uses Intel Corporation, the computer chip manufacturer, as a barometer of the business cycle. He looks at the stock price in recent years, its production capacity expansion, and the company’s very recent cost- and dividend-cutting moves.
Check out Mark Thornton’s free book, The Skyscraper Curse: And How Austrian Economists Predicted Every Major Economic Crisis of the Last Century: Mises.org/Curse
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Mark Thornton explains the target as another smokescreen that was originally intended to stabilize monetary policy, currencies, and exchange rates, but has become a justification for inflation and central bank manipulation.
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Economists like Paul Krugman have claimed that practice of austerity in government would damage the US economy. As Mark Thornton points out, the opposite is true: austerity works.

Original Article: "Austerity: A Real Solution to Help Heal the US Economy"
This Audio Mises Wire is generously sponsored by Christopher Condon.

As we enter the holiday season stock owners have been the big losers of 2022, but jobs are still plentiful and nominal wages are rising rapidly. The Wall Street Journal reports “Stiff Demand Drives Gains in Jobs, Wages” (December 4). Faced with a stagnant stock market, nothing bolsters confidence more than the plethora of job openings, seemingly everywhere, and for all types of jobs.
The number of job openings is a statistic worth paying attention to as a gauge of the overall economy, but certainly not the only one. Here we examine it in relation to economic conditions and other statistics. This reveals some good, some bad, and some ugly insights into the economy, but overall, the signs all point to the business cycle and the turn toward economic crisis.
The Good
Let’s start with the

Austerity works. We know what it is and don’t like it, but it works. It usually means cutting your consumption and spending, paying down your debts, pawning assets, and working more hours to restore your economic situation.

My previous article demonstrated how the free market solves a boom-bust crisis and is the only solution, its effectiveness depending upon the magnitude of the crisis and, more importantly, how much the government intervenes in response. The bigger the problem created by the Fed, the greater the crisis and the more government intervenes, and the slower the economy recovers.

Mainstream economists view the economy as fickle, unstable, and always in danger of utter collapse. They see the outlook as very bleak if not for the enormous existing superstructure of government intervention, including constant stimulus of “aggregate demand.”

The Federal Reserve has a legal dual mandate to minimize unemployment and price inflation. The current “dual” between the two mandates is to reduce price inflation by increasing interest rates to increase unemployment and kill businesses to choke off aggregate demand.

Thomas Piketty’s Brief History is the fourth installment of his assault on economic inequality, following as it does the best-selling Capital in the Twenty-First Century and Capital and Ideology. The third, Time for Socialism: Dispatches from a World on Fire, 2016–2021, is just a collection of popular articles based on which the New York Times dubbed Piketty a “vaguely left-of-center” economist.

The nickel, the once popular US five-cent coin, is known for its nickel content (25 percent nickel and 75 percent copper). It originated as a type of fiat money in that its intrinsic metal value was far less than the purchasing power stamped on it. The final act in the illustrative monetary career of the nickel is expected to be extinction, as with the penny, as inflation increases the coin’s cost of production and reduces its real purchasing power.

Days after Netflix reported bad earnings and an “unexpected” hit to their subscriber base, CNN announced that it had pulled the plug on its own brand-new streaming service, CNN+. Despite arguments to the contrary from the parent company, the CNN+ adventure turned out to be a costly mistake that attracted few subscribers and a paltry number of regular viewers.

The chaos economy we’re witnessing is not the fault of the market economy. Rather prices in some areas of the economy need to rise so high and so fast to harmonize supply and demand that entrepreneurs can hardly keep pace.

Original Article: "We’re Living in a Chaos Economy. Here’s How to End It."
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.

This is the fiftieth anniversary of the demise of the gold standard and the beginning of the current fiat paper standard. Many will say “good riddance” to gold and “thank goodness” for the “good ole greenback”! Reflection, however, produces an alternative conclusion.

Savings are the foundation for a productive and advanced economy. Unfortunately, governments insist on policies that make it harder for ordinary people to save.

Since before covid-19 and the lockdown, I have written articles that touch on the purpose and importance of personal savings, and more importantly, why the lack of personal savings was going to make an economic crisis in the year 2020 potentially tragic for most Americans.
As a result, I have been interviewed a couple of times specifically on the topic of personal savings. These interactions have indicated to me that people do not understand the importance of savings and rather believe the demonization of savings as a “leakage” from the economic system and that hoarding money is one of the greatest threats to the economy.
Even more importantly, I discussed the reasons why Americans save so little and the related dangers, and I discussed how you can get around those government interventions

The year 2020 is one of the most disrupted times in at least the last half century, maybe longer. Global protests and riots, the covid-19 virus, lockdowns, and police killings of unarmed citizens. Add to that widespread rioting, looting, arson, homelessness, and destruction of property, including the tearing down of statues.

In an attempt to maintain the lockdown and their authority over our lives, politicians, health experts, and the mainstream media have been misusing some unusual analogies to describe the current economy. By using these analogies, our political overlords hope they can continue to keep the economy shut down, force companies to produce what the government forgot to purchase before the virus hit, and toss out trillions of dollars of handouts and bailouts to their friends.