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Money and BanksMoney and Banking
Increases in the money supply need not always be followed by general increases in prices, as prices are determined by both real and monetary factors.
The idea that money must grow in order to sustain economic growth gives the impression that money somehow sustains economic activity. But this has never been true.
Decades ago, the Chinese state began to accumulate gold merely as part of a makeshift backup plan. But it may have ended up with enough gold to make a real move away from fiat currency, which would be a disaster for its Western competitors.
Global EconomyMoney and BanksMoney and Banking
The future of Venezuela is grim. International reserves will be depleted, monetary expansion will not pay the deficit, and inflation will continue.
As the foundation of the economy weakens, bank lending weakens also. And then money begins to disappear from the banking system.
Financial MarketsGlobal EconomyMoney and Banking
The next crisis is not likely to be another Lehman, but another Japan — a widespread zombification of global economies.
Taxes and SpendingMoney and Banking
Government spending distorts and harms the wealth creation process. And cutting taxes without cutting spending won't lead to real economic growth.
Now untethered from everything except the will of central bankers, international exchange rates are especially prone to manipulation worldwide.
Financial MarketsBusiness CyclesMoney and Banking
What causes financial crises, domestic and global, is the underlying, continuing credit expansion.
The key factor behind the rate-of-exchange determination is the relative purchasing power of various monies.