Keith Weiner: Gold Standard etc.

Introducing Yield Purchasing Power

I gave a 45-minute presentation on Yield Purchasing Power at American Institute for Economic Research in Great Barrington, MA on October 14, 2016. I am grateful to the Institute for recording video of my presentation plus extended Q&A.

 

Another Serious Real Interest Rate Fallacy

Modern monetary economics is a siren song, especially alluring in a world of falling, zero, and negative interest rates. I urge you not to dash your wealth against the rocks.

 

 

Real vs. Nominal Interest Rates

What is the real interest rate? It is the nominal rate minus the inflation rate. This is a problematic idea. Let’s drill deeper into what they mean by inflation.

 

Arizona Governor Ducey Vetoes Gold

Unpersuaded by either the plight of the pensioners or the prospect of business growth in Arizona, Ducey vetoed gold. This is his second time to shoot down gold.

 

Should the Gold Price Keep Up with Inflation?

The popular belief is that gold is a good hedge against inflation. Owning gold will protect you from rising prices. Is that true?

 

 

Who Lends to the Fed?

Recently, I wrote to argue against the idea that the Federal Reserve prints money. This leads to our present question. To speak of borrowing and a ready market in which the Fed can borrow, means there is a lender. Who is the lender to the Fed?

 

What is Money Printing?

There is a populist idea of money printing. The idea is that banks can just print what they want, enriching themselves in a massive fraud. But, does it really work this way?

 

 

Will Gold Outperform Stocks?

Will gold outperform? With the paperocentric theory, this is hard to answer. We have to estimate increases in the quantity of dollars and calculate how much it will cause prices to rise. Then we have to somehow put a value on gold. It boils down to a guess.

The Bull Market in Stocks May Be Over

The great stock bull market is, perhaps, done. To most people, a bull market is good, and its end is bad. After all, a rising market signifies a healthy economy. Investors are making money. Share prices are connected to business productivity, aren’t they?

 

Open Letter to the Banks

On Friday, I attended a digital money summit at the Consumer Electronics Show. I am writing to you to warn you about the disruption that is about to occur in banking. There are many startups (and larger companies too) that are gunning for you. Perhaps you have watched what Uber has done to the taxi business? Well, these guys are planning the same thing for the banking business.

 

Monetary Innovation is the Path Forward

There is no shortage of sound money conferences. They’re regularly put on by think tanks, and dutifully attended by all the free market academics who can get travel budget. But I have a premonition. The move to the gold standard won’t be led, or driven by these events.

What Is Money Printing?

There is a populist idea of money printing. The idea is that banks can just print what they want, enriching themselves in a massive fraud. But, does it really work this way?

 

 

Janet Yellen Fights the Tide of Falling Interest

The Fed is going to have to take back this interest rate hike (Dec 16). The process that sets the interest rate is complex. I have written many words on its terminal decline. However, there are two simple reasons why the trend remains downward.

 

 

Falling Interest Causes Falling Profits

Most people assume that prices move as a result of changes in the money supply. Instead, let’s look at the effect of falling interest. To start, consider a hamburger restaurant. Suppose that the average profit in the burger business is ten percent of invested capital. If MacDowell’s is thinking about expanding, it has to consider the interest rate. Why?

 

A Free Market in Interest Rates

Unless you’re living under a rock, you know that we have an administered interest rate. This means that the bureaucrats at the Federal Reserve decide what’s good for the little people. Then they impose it on us. Why can’t we have a free market?

 

Will a GDP Futures Market Be Liquid?

At the Cato Monetary Conference this week, Scott Sumner said he had a “modest” proposal, that there should be a highly liquid futures market in Nominal Gross Domestic Product (NGDP). This caught my attention

 

 

How Do People Destroy Capital?

The flip side of falling interest rates is the rising price of bonds. Bonds are in an endless, ferocious bull market. Why do I call it ferocious? Perhaps voracious is a better word, as it is gobbling up capital like the Cookie Monster jamming tollhouses into his maw. There are several mechanisms by which this occurs.

 

 

 

The Dog That Did Not Bark

In the famous Sherlock Holmes Story, the detective identified the perpetrator from the fact that a dog didn’t bark. The dog didn’t bark because it dog knew the perp. This story makes a good analogy to what happened on Thursday, Sep 17. Perhaps I should say what did not happen.

The Fed did not raise the interest rate.

 

The Fed and the Cotton Candy Market

For Keith Weiner the Federal Reserve operates like a Cotton Candy Machine for the housing market. It creates a massive bubble, financed with debt.  It spins the price of a house, with the help of credit and debt, into something many times its original size.

 

 

 

Keith’s critique of irredeemable paper money:

• Janet Yellens’ Fed Has the Makings of a Potential Disaster
• The Fed’s Bubbles Destroy Capital
• Accumulated Capital of Centuries Going Up in Smoke
• The Fed Poisons The Stock Market
• Europe Stricken With Negative Deposit Rate
• Can the Fed Raise Interest Rates?
• The Mixed Economy, Plunder and Trade
• A Gold Man in Monetarist Theory

 

Keith on debt and inflation:

• Inflation Caused the Greek Tragedy
• They’re Coming to Take Away Your Cash
• Government Debt: Not Unfunded Liabilities but Fraudulent Promises
• Inflation Is Counterfeiting
• Your personal debt is not entirely your fault
• What Happens When Credit is Mispriced

 

Keith about the advantages of gold and silver as money:

• America Needs The Gold Standard More Than Ever
• Why Did Both Silver and Gold Become Money?
• Prohibition: Gold is like Marijuana
• The Gold Standard for Democrats
• Why Gold Is The Best Money Of Them All, a Look on Spreads

 

Keith on Yield Purchasing Power:

 

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