Category Archive: 6b) Austrian Economics

Powell’s “Soft Landing” Is Impossible

After more than a decade of chained stimulus packages and extremely low rates, with trillions of dollars of monetary stimulus fueling elevated asset valuations and incentivizing an enormous leveraged bet on risk, the idea of a controlled explosion or a “soft landing” is impossible.

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Even after Admitting She Underestimated Inflation, Janet Yellen Still Doesn’t Understand What It Is

According to the June 1, 2022, Financial Times, Janet Yellen, the US Treasury secretary conceded she was wrong last year about the path inflation would take.

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On the Digital Future of Markets and Money

Thank you very much for the invitation. I am delighted to have the opportunity to share some thoughts with you on a topic I am very much interested in and that I believe is of the utmost importance to people around the globe—and that is “the digital future of markets and money.”

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No, It’s Not “Greed” or “Price Gouging” that’s Driving up Gas Prices

Both consumer prices and producer rose near to multi-decade highs last month. Price inflation rose to 8.6 percent while wholesale producer prices rose by more than 10 percent. In both cases, a significant factor behind rising prices—but certainly not the only factor—was high energy prices. This has been reflected in prices related to transportation and shipping.

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Unheeded warnings: Václav Klaus at the Marmara Forum

This not the first time that Václav Klaus’ astute observations and experience-based predictions turn out to be shockingly accurate years later, and I’m pretty confident it will not be the last. Even before the examples that follow and that he clearly laid out in his address at the Marmara Forum, the former President of the Czech Republic has repeatedly proven to be quite prophetic in his assessment of the future.  From his critique and his...

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The Inverted Yield Curve and Recession

The “yield curve” refers to a graph showing the relationship between the maturity length of bonds—such as one month, three months, one year, five years, twenty years, etc.—plotted on the x axis, and the yield (or interest rate) plotted on the y axis.1

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The Great Reset: Turning Back the Clock on Civilization

The covid-19 pandemic featured an unprecedented fusion of the interests of large and powerful corporations with the power of the state. Democratically elected politicians in many countries failed to represent the interests of their own citizens and uphold their own constitutions and charters of rights.

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Bribe Money for Ukrainian Officials?

In my blog post of May 18, 2022, I raised the possibility that the $40 billion aid package that Congress quickly approved for Ukraine was going to be used, at least in part, to pay multimillion dollar bribes to Ukrainian officials.

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Even When There Is Inflation, the Fed STILL Fights Falling Prices

Under any remotely sound money regime the aftermath of war and/or pandemic is highly likely to feature a sharp decline in the prices of goods and services on average. Even under unsound money regimes there are powerful forces operating towards lower prices once the war/pandemic recedes. Strong injections of monetary inflation, however, can overpower them.

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Klimamassnahmen: Verletzung elementarer Rechtsprinzipien

Die Klimapolitik basiert nicht auf solider Wissenschaft und bricht mit elementaren juristischen Grundsätzen. Weltweit greifen Staaten immer massiver in Freiheitsrechte ein, um den Klimawandel zu bekämpfen.

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Slowing Money-Supply Growth in 2022 Points to Recession

Money supply growth fell slightly in April, falling below March's eight month high. Even with March's bump in growth, though, money supply growth remains far below the unprecedented highs experienced during much of the past two years.

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A crack-up boom in the making

The great Ludwig von Mises first described the concept of a crack-up boom as part of the Austrian business cycle theory, based on real life events that to an unsuspecting bystander might have appeared unconnected, or perhaps even quite bizarre and counterintuitive. Indeed, such a bystander might think the same of today’s economy and would likely have trouble making sense of the picture painted by stock markets, by our monetary and fiscal policies...

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Interest Rates Are Rising, but the Fed Continues to Be Reckless

The crushing issue of high inflation caused by central banks can no longer be downplayed. Public displeasure at the increasing currency devaluation has now forced monetary policy makers to act. The US Federal Reserve (Fed) has raised its key interest rate to 1 percentage point.

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Market Success Is about Giving People What They Want

Economists are often examining the variables that lead to prosperity, but surprisingly, intelligence is rarely featured in this literature, despite its high replicability in research. Intelligence is a robust predictor of well-being, job performance, and other social outcomes.

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The Five Stages of Totalitarianism

Fears of a growing totalitarian tendency in the US have swelled during 2020–22. But how close are we really to a totalitarian state? How have such regimes come about historically and what are the warning signs? This article will answer these questions by examining totalitarian regimes in the eighteenth and twentieth centuries and the pattern by which they came to power.

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What Is Stagflation and What Causes It?

The occurrence of stagflation is associated with a situation of general strengthening in the momentum of prices while at the same time the pace of economic activity is declining. A famous stagflation episode occurred during the 1974û75 period, as year-on-year industrial production fell by nearly 13 percent in March 1975 while the yearly growth rate of the Consumer Price Index (CPI) jumped to around 12 percent.

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What Is Wrong with the Fed’s Inflationist Policy?

Christopher Leonard’s book brings to mind the familiar line from Faust: “Two souls, alas! dwell in my breast.” Leonard offers a penetrating criticism of the Fed’s vast expansion of the money supply, which has won for him praise from the noted hard-money advocate and friend of the Mises Institute James Grant.

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Rothbard vs. the Religion of Progressivism

Our main text for the Rothbard Graduate Seminar this week is Murray Rothbard’s Power and Market: Government and the Economy, which contains a systematic treatment of one area of economic theory, interventionism.

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Respect the Fed? No, End the Fed

President Joe Biden has unveiled a three-part plan to fight inflation — or at least make people think he is fighting inflation. One part of the plan involves having government agencies “fix” the supply chain problems that have led to shortages of numerous products.

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Degradation and Nationalization: The Inevitable Ways of Russian Autocratic Economic Policy

As Russian political scientist Gleb Pavlovsky has quite rightly said, one should not consider the five-thousand-plus sanctions imposed against the Russian Federation as of this writing as sanctions in the normal diplomatic and economic sense.

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