Bastiat reminded his readers that economic analysis involves not just what we see on the surface, but also the costs that are hidden from view.
Original Article: What Is Seen—And What is NOT Seen: Bastiat’s Often-Ignored Wisdom

The Economist reported on August 14, 2023, that “Argentina could get its first libertarian president.” They added that Javier Milei, the winner of Argentina’s election primary was, imagine this, a “free-market radical.” The problem, as I see it, is that few people actually know what a libertarian is, just like few people in America who call themselves “socialists” actually know what socialism is.
When I was young, I thought I was a liberal. Then I thought I was a conservative. I believed that if you were a liberal you were more likely to be a Democrat, and if you were conservative, you were more likely to be a Republican. I sometimes voted for Republicans, but on a few occasions, I voted for Democrats or third-party candidates. Sometimes I didn’t vote at all. The world was divided (at

How can a bank “create money out of thin air”? We must enter the magical kingdom of “fractional-reserve banking,” where deposits are turned into loans, loans are turned into money, and so on, to find out.

Original Article: "Banks Create Money out of Thin Air. What Could Possibly Go Wrong?"

You might rightfully wonder: How can a bank, like the neighborhood bank down the street, “create money out of thin air”?
To answer that question, we must enter the magical kingdom of “fractional-reserve banking,” where deposits are turned into loans, loans are turned into money, and so on. For every old dollar that goes in, nine new dollars come out, created with the stroke of a pen or the click of a mouse. As you may be aware, general deposits are loans by the bank depositor to the bank. However, banks can spin new loans out of old loans, creating a wheel of fortune by lending the same dollar to nine different customers—a feat that, to the uninitiated, is equally quite amazing and frightening!
This financial alchemy is perfectly legal and is in fact carried out with the aid and assistance

As Murray Rothbard wrote, inflation is not an increase in prices. It is, instead, an increase in the supply of money in circulation. The distinction is important.

Original Article: "How Fast Should the Money Supply Grow?"
This Audio Mises Wire is generously sponsored by Christopher Condon.

Some economists have suggested that inflation results when the money supply expands faster than the rate at which goods and services are produced. They correctly point out that this expansion of the money supply will generally lead to rising prices. But what most economists fail to mention is that inflation can exist even when prices are stable.

President Barack Obama returned from the 2010 G20 Summit held in Toronto having failed to convince world leaders that more “economic stimulus” was needed to cure what ails the world’s economies. Walking a seeming tightrope between too much spending and spiraling deficits, on the one hand, and too little spending and economic recession, on the other, world leaders reluctantly agreed to err on the side of fiscal and monetary caution and to halve deficits in three years.

They read like Civil War battlefields: Chattanooga, Tennessee; Tuscaloosa, Alabama; Greer, South Carolina; West Point, Georgia; Montgomery, Alabama; Tupelo, Mississippi; Smyrna, Tennessee. They are the towns and small cities in the Deep South where America now builds its cars and trucks.

When I was a child, my mother and I would take the Long Island Railroad to Brooklyn to see relatives a few times a year. My grandfather was always outside in front of the apartment house in Park Slope, where he and my aunts and uncles lived. Upon seeing him, I would run down the sidewalk to greet him, but before I could say “Hi, Grandpa!,” he would without fail press a shiny silver dollar into my hand.