The United Nations recently passed a resolution in which those who lend money to governments are denounced as "vultures" while the governments themselves are portrayed as hapless victims. This isn't exactly a complete and accurate picture of the situation.
The Pope is touring North America this week, promoting a variety of interventionist “solutions” to global warming, poverty, and more. But a far more powerful religious figure, Janet Yellen, continues to pull the levers of the global financial system.
There’s much debate over how the Fed determines interest rates. Many pundits seem to assume that central banks dictate interest rates to the market. In fact, central banks mostly affect interest rates indirectly through their power to change the money supply.
Senior Fellow Mark Thornton is interviewed on The Power & Market Report. Dr.
Thirteen powerpoint slides lead you through Dr. Thornton's presentation. There exist strong correlations between either the announcement or the completion of the world's tallest building and GDP, but it is not held that you can accurately forecast a recession or financial panic by this measurement. Thornton suggests the common cause is artificially low interest rates.
The Greek debt crisis is often framed as a matter of Greek debtors against German creditors. But it’s really a matter of Greek and German taxpayers being exploited by their own governments which are promising to pay debts with other people’s money.
Our method of calculating GDP growth is hopelessly flawed, and is more likely determined largely by the growth of the money supply in the economy. So as the Fed pumps more, the economy appears to grow also.
China has recently devalued its currency. Like many governments, the Chinese government thinks this will help the economy by increasing exports. But it will really just destroy real wealth in the process.
The crash of 1929 came after a decade of interventionist politics following world War I. "Free markets" were blamed anyway. Decades later, we pursue even more interventionism, and when it fails, we blame "free markets" all over again.
