Monetary Theory

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Stiglitz in The Times: A Study in Confusion

Money and BanksMonetary TheoryMoney and Banking


In the New York Times, Joseph Stiglitz, a Nobel prize winner in economics, has an article titled "How to Fix the Global Economy." Judging from his article, Stiglitz appears to believe that the main problem of the global...

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Wage Rates and Purchasing Power

Monetary Theory


An individual who earns more money per week is obviously in a position to spend more in buying consumers' goods than is an individual who earns less money per week. For example, a man who makes $1,000 per week has the ability to spend $1,000 per week, while a man who makes only $900 per week has...

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How Government Budget Deficits Reduce Wages and Raise Profits

Calculation and KnowledgeMonetary TheoryProduction TheoryValue and Exchange


In recent years there have been growing complaints over slow growth in wages compared to profits. Those who make the complaints usually offer little in the way of explanation. Here is a part of the explanation: growing government budget deficits.

Government budget deficits are financed...

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Who's Afraid of the CPI!

Money and BanksCapital and Interest TheoryMonetary TheoryMoney and Banking


Everybody worries about inflation these days. It's chic. It's trendy. And it gives me a great comeback to the boss at raise time. "Congrats, Roberts, you're getting a 3% increase."

"Yeah, I just about keep up with inflation," I reply with that snippy look that bosses hate. A smart alecky...

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Shedlock on Wages and Inflation

Money and BanksMonetary TheoryMoney and Banking


Mike Shedlock gives a rather Austrian-flavored explanation of inflation, noting that it is "best described as a net expansion of money supply and credit" through fractional reserve banking; that it...

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We're Fed Guessers not investors

Financial MarketsMonetary Theory


Here's a question for you. What's funnier: we buffoons who make up the cast of investors, brokers, kibitzers, commentators who produce the daily theatrical Sitcom called the US stock market, or Saturday Nite Live? I vote for us, if comedy is valued over drama.

Like this past Tuesday. Ms....

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Role Playing Games and Money

Monetary TheoryMoney and Banking


I came across this old thread in the Austrian Economics forum, and I thought some of the older folks who read this blog (but not the forum) might be interested in this description of what happens in a "Massively Multiple Online Role-...

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Rothbard's Bracing Plan for Gold

Gold StandardMonetary TheoryMoney and Banking


To answer a reader question, I revisited Rothbard's transition plan for 100% gold. This is cut and pasted from the Mystery of Banking (Richardson and Synder, 1983), pp. 265-267.

Even though, for the past few...

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Real Bills Raises its Ugly Head, Again and Again

Money and BanksMonetary TheoryMoney and Banking


"I know no time which is lost more thoroughly than that devoted to arguing on matters of fact with a disputant who has no facts, but only very strong convictions." So said, James E. Thorold Rogers, Six Centuries of Work and Wages, London 1901. In line with the above definition of futility, I...

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About the Chinese currency reform

Monetary Theory


So yesterday it finally happened:-the yuan was revalued , after years of pressure from particularly the U.S. government but also the EU and Japan. However the move was much smaller than expected, a mere 2.1%. This will hardly satisfy...

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