Savings Are the Foundation of Economic Growth
In the real world, one has to become a producer before one can demand goods and services…
Continue readingFrank Shostak
Sound Money (Gold) Versus Fiat Money (Unbacked): Effects On The Boom-Bust Cycle
The key to the emergence of the boom-bust cycle is the expansion in money supply out of “thin air.” The increase in the supply of gold has…
Continue readingWhy Monetary “Stimulus” Won’t Prevent an Economic Bust
Economic bust is going to emerge regardless of whether the Fed is going to tighten its interest rate stance or not…
Continue readingWhy Economic Models Can’t Provide a Realistic Picture of Human Behavior
In many instances the forecast produced by an econometric model is heavily influenced by…
Continue readingMonetary Savings versus Real Savings
A decline in savings, which is an increase in spending, is considered as good news for economic activity. The…
Continue readingFed Transparency Won’t Get Us out of the Mess the Fed Created
It is not possible to deflate the present gigantic monetary bubble without a severe economic bust. A policy of transparency employed by the Fed cannot prevent the inevitable bust. Neither…
Continue readingTechnology Alone Won’t End Poverty: We Need Savings First
Regardless of how knowledgeable we are and regardless of various technological ideas, without an expanding pool of real savings, economic growth…
Continue readingTime Preference, Interest Rates, and Stagflation
Strong increases in money supply result in an exchange of nothing for something, which weakens the process of…
Continue readingFiscal Stimulus vs. Economic Growth
As the pace of government spending increases, a situation could emerge in which the…
Continue reading“Equilibrium Prices” and Real Prices: Supply, Demand, And The Prices Of Goods
By the popular way of thinking, the determination of the prices of goods is summarized by means of supply and demand curves, which describe…
Continue readingDeflation Doesn’t Undo the Problems Caused by Past Inflation
Freeing the economy from central bank interference with interest rates and money supply will arrest the process of wealth destruction. This is going to…
Continue readingWhy Government Stimulus Sometimes Looks like It Revives the Economy
More government and central bank stimulus policies are likely to further weaken the pool of real savings and place the economy on the path of…
Continue readingA Drop in the Money Supply Was Not the Cause of the Great Depression
The Great Depression of 1930s occurred because of the Fed’s loose monetary stance from October 1920 to August 1924, which undermined the…
Continue readingHow Easy Money Creates the Boom-Bust Cycle
Whenever the monetary stance is loosened, it sets in motion an economic boom by means of the diversion of real savings from wealth generators to…
Continue readingWhy Asset Bubbles Involve So Much More Than Just Rising Prices
To prevent the emergence of bubbles one needs to arrest the monetary pumping by the central bank and to curtail the…
Continue readingMoney Supply Vs Liquidity: What’s the Difference?
Changes in money supply and liquidity are not the same thing…
Continue readingPrinting Money at a “Constant” or “Stable” Rate Won’t Prevent Boom-Bust Cycles
A pure gold standard is immune from boom-bust cycles, since on the pure gold standard an increase in the money supply does not trigger an…
Continue readingWhy There’s So Much Confusion over What “Inflation” Means
On a gold standard, an increase in the money supply unbacked by gold constitutes an increase in the money supply out of “thin air”. In the modern world…
Continue readingShould Investors Focus on Risk Rather Than Profit?
Proponents of the modern portfolio theory hold that diversification is the heart of investment. The key should be evaluation of the profitability and…
Continue readingWe’re Headed Toward Stagnation (Unless the Fed Reins In Its Money Printing)
If money pumping can grow the economy, then why not pump plenty of it to generate massive economic growth?
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