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Posts Tagged: “boom bust cycle“
Why Price Stability Is a Dangerous Illusion
One of the long-touted goals of central banking is “price stability,” which, in the minds of central bankers, means low and continuous inflation. Even if this goal wasn’t cover for inflationist policy, it’d still be important to note that “price stability” is actually an unachievable goal when properly understood.
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Rising Long-Term Interest Rates: The Hidden Impact of High Time Preference
In the wake of last week’s FOMC meeting, it’s worth revisiting the economic function of interest rates, which guide economic activity in accordance with societal time preference. In order to suppress the natural rate of interest, central banks must resort to inflation.
Can Government Stimulus Truly Prevent Recessions?
Conventional wisdom says that the government can help (or is even required to) stimulate the economy, especially during a recession. As mounting evidence grows for a recession happening right now, it’s worth examining how this conventional wisdom is completely wrong and backwards. The government is typically the primary cause of recessions.
Gold Pumps After Monster Rate Cut – And So Will Inflation
In the wake of the Fed’s juicy 50 bps interest rate cut, the dollar responded immediately by dropping against gold. With more rate cuts on the way, Israel’s war expanding rapidly, and inflation ready to rip higher, new record prices are on the way for the yellow metal.
Degrowth Advocates Misunderstand the Business Cycle
December saw a resurgence of “degrowth” advocates in the media, with two articles published by Nature garnering special attention on X (formerly Twitter). The fallacies underlying the degrowth movement are not new in economics, but it’s worth revisiting them and their important connections to monetary policy in the age of central banking.
Odds the Fed Is About to Trigger the Next Bust Are Rising
During testimony on Capitol Hill, Federal Reserve Chairman Jerome Powell said the central bank may have to raise interest rates higher than previously expected to bring down price inflation. Despite the speed of Fed hiking and the enormous amount of debt in the US economy, most people in the mainstream seem convinced the central bank […]
How the Fed Feeds the Boom-Bust Cycle
The central bankers at the Federal Reserve can be pretty clueless. A report issued by the Fed a few weeks ago serves as a prime example.
The Era of Boom-Bust Is Not Over
In the most recent Friday Gold Wrap podcast, Mike Maharrey talked about the fact that the Federal Reserve has increasingly engaged in more and more extraordinary monetary policy. As he put it, extreme has become the norm. Despite what pundits insist is a “great” economy, interest rates are extremely low by historical standards and the […]