Sound Money Project
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Is There a Government Bond Bubble?
“YES, there is a government bond bubble. And it’s huge. Uncle Sam and his counterparts in the EU and Japan are broke and are, almost surely, going to print vast quantities of money to cover their enormous spending obligations. The printing presses are already working full time. The Fed, for example, has increased the monetary…
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The Monetary Theorist From The Little House on the Prairie?
“The FEE archives are full of correspondences. Many of these letters contain interesting discussions on the economics, politics, and philosophy of liberty. Shifting through them it becomes clear that those in the liberty movement truly cared about obtaining a better understand of how society works. This letter from Rose Wilder Lane to Leonard Read on…
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Why QE Could Trigger a Collapse of the Dollar
“A week ago, the Federal Reserve initiated a new program of “quantitative easing” (QE), with the Fed purchasing U.S. Treasury securities and paying for those securities by creating billions of dollars in new monetary base. Treasury bond prices surged on the action. With the U.S. economy predictably weakening, this second round of quantitative easing appears…
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“Fed’s Hoenig Says Big Banks Still Benefit From Safety Net”
“The largest U.S. banks have an implied government safety net that gives them a lower cost of capital compared to community banks even after a congressional overhaul of banking regulation, Kansas City Federal Reserve President Thomas Hoenig said. “Despite the provisions of the Dodd-Frank Act to end too- big-to-fail, community banks will continue to face…
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“Fannie Mae and Freddie Mac Reform”
“Mr. Geithner cited the possibility of giving Fannie Mae and Freddie Mac an “elegant funeral.” But that wouldn’t mean a government exit from its prominent role in America’s housing market. In fact, it could mean that the government agrees to stand explicitly behind the GSEs’ obligations, while also putting in place a new system designed…
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“Treasure 10-Year Yields Near 17 Month Low”
“The Fed’s purchases today will be its second this week, after it bought $2.551 billion of notes on Aug. 17. The central bank plans to purchase about $18 billion of U.S. debt by the middle of September using the money from principal payments on its holdings of agency debt and agency mortgage-backed securities, according to…
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“Foreign Lenders: Friends Indeed to a U.S. Treasury in Need”
“When the U.S. government wishes to spend more money than it receives as tax revenue, it covers the shortfall by borrowing, and foreign lenders have become increasingly important sources of such borrowed funds. Reliance on foreign lenders is as old as the republic. Indeed, loans from the French and the Dutch proved critical in keeping…
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“How to Feed a Recovery”
“To get a sense of the current economic climate, I spoke with John Taylor, Stanford economics professor and George P. Shultz Senior Fellow in Economics at the Hoover Institution. He is well known in economic-policy circles for coining the Taylor rule, a monetary-policy principle that offers guidance on how to tinker with interest rates to…
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“Lots of Regulatory Expansion but Little Reform”
“In the wake of every financial crisis, politicians face the demand that they Do Something. They feel they have to enact something to “make sure this never happens again”—although historically it has always happened again anyway. Moving the boxes on the regulatory organization chart and expanding regulatory powers are always available options, and the financial…
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“How the Market Creates Jobs, and the Government Destroys Them”
“By bringing about the business cycle, Federal Reserve money creation causes unemployment. Inflation not only raises prices, it also misallocates labor. During the boom phase of the trade cycle, businesses hire new workers, many of whom are pulled from other lines of work by the higher wages. The Fed subsidy to these capital industries lasts…
-
Is There a Government Bond Bubble?
“YES, there is a government bond bubble. And it’s huge. Uncle Sam and his counterparts in the EU and Japan are broke and are, almost surely, going to print vast quantities of money to cover their enormous spending obligations. The printing presses are already working full time. The Fed, for example, has increased the monetary…
-
The Monetary Theorist From The Little House on the Prairie?
“The FEE archives are full of correspondences. Many of these letters contain interesting discussions on the economics, politics, and philosophy of liberty. Shifting through them it becomes clear that those in the liberty movement truly cared about obtaining a better understand of how society works. This letter from Rose Wilder Lane to Leonard Read on…
-
Why QE Could Trigger a Collapse of the Dollar
“A week ago, the Federal Reserve initiated a new program of “quantitative easing” (QE), with the Fed purchasing U.S. Treasury securities and paying for those securities by creating billions of dollars in new monetary base. Treasury bond prices surged on the action. With the U.S. economy predictably weakening, this second round of quantitative easing appears…
-
“Fed’s Hoenig Says Big Banks Still Benefit From Safety Net”
“The largest U.S. banks have an implied government safety net that gives them a lower cost of capital compared to community banks even after a congressional overhaul of banking regulation, Kansas City Federal Reserve President Thomas Hoenig said. “Despite the provisions of the Dodd-Frank Act to end too- big-to-fail, community banks will continue to face…
-
“Fannie Mae and Freddie Mac Reform”
“Mr. Geithner cited the possibility of giving Fannie Mae and Freddie Mac an “elegant funeral.” But that wouldn’t mean a government exit from its prominent role in America’s housing market. In fact, it could mean that the government agrees to stand explicitly behind the GSEs’ obligations, while also putting in place a new system designed…
-
“Treasure 10-Year Yields Near 17 Month Low”
“The Fed’s purchases today will be its second this week, after it bought $2.551 billion of notes on Aug. 17. The central bank plans to purchase about $18 billion of U.S. debt by the middle of September using the money from principal payments on its holdings of agency debt and agency mortgage-backed securities, according to…
-
“Foreign Lenders: Friends Indeed to a U.S. Treasury in Need”
“When the U.S. government wishes to spend more money than it receives as tax revenue, it covers the shortfall by borrowing, and foreign lenders have become increasingly important sources of such borrowed funds. Reliance on foreign lenders is as old as the republic. Indeed, loans from the French and the Dutch proved critical in keeping…
-
“How to Feed a Recovery”
“To get a sense of the current economic climate, I spoke with John Taylor, Stanford economics professor and George P. Shultz Senior Fellow in Economics at the Hoover Institution. He is well known in economic-policy circles for coining the Taylor rule, a monetary-policy principle that offers guidance on how to tinker with interest rates to…
-
“Lots of Regulatory Expansion but Little Reform”
“In the wake of every financial crisis, politicians face the demand that they Do Something. They feel they have to enact something to “make sure this never happens again”—although historically it has always happened again anyway. Moving the boxes on the regulatory organization chart and expanding regulatory powers are always available options, and the financial…
-
“How the Market Creates Jobs, and the Government Destroys Them”
“By bringing about the business cycle, Federal Reserve money creation causes unemployment. Inflation not only raises prices, it also misallocates labor. During the boom phase of the trade cycle, businesses hire new workers, many of whom are pulled from other lines of work by the higher wages. The Fed subsidy to these capital industries lasts…
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