The boost to growth from more monetary easing and more deficit spending — naturally always transitory and the source of further misallocations of resources — will be ever more faint and short-lived.

Instead of igniting a new false boom, a progressively larger share of the policy stimulus will simply evaporate in the service of maintaining the accumulated misallocations, of avoiding a correction of artificially raised asset prices and of bloated balance sheets. As the manufactured recoveries get weaker, fiscal deficits get larger as a result of the […]

Compared to the last cycle, it will now take an even easier monetary policy to arrest the liquidation of the now larger misallocations and to generate another money-induced boom.

As this pattern is repeated, dislocations will necessarily accumulate, making the economy on trend ever more vulnerable to higher rates and making an ever more aggressive policy intervention necessary to keep the money supply on an expansionary course. The results of this policy are obvious: a lasting and persistent shift of resources to forms of […]

Monetarists claim to be advocates of the free market and are generally critical of the heavy fiscal interventionism and deficit spending of the Keynesians.

However, they combine their defense of the market order in most areas with the promotion of a state-run monetary system, which includes state paper money issued by the central bank and constant, albeit controlled, inflationism to aid growth. —– Consequently, in recent crises, most governments have fully embraced both sets of recipes. The media and […]

In his inaugural address in 1961, President John Kennedy gave a stirring speech in which he famously stated, “And so, my fellow Americans: Ask not what your country can do for you – ask what you can do for your country.”

He then went on to say, “Finally, whether you are citizens of America or citizens of the world, ask of us the same high standards of strength and sacrifice which we ask of you.” Nonsense. —– We’re entering an era in which some of the world’s most prominent countries will be increasing their migration controls. […]

Price increases do not measure inflation, they only reveal its effects.

They remain an inaccurate measure, because a substantial portion of inflation is hidden by technological advances and changes in quality. Government figures purporting to show the rate of inflation through price changes fail to take into consideration the downward pull on prices exerted by increased efficiency. Prices have increased — despite increases in productive efficiency, […]

Those seeking a substitute for gold labored under a misunderstanding. They believed that governments designated gold as money, and all government needed to do to change it was to decide on a different form of money.

This is simply not the case. Government did not create money; it merely recognized officially the money that was functioning in the marketplace. It was people, not government, that decided on what to use for money. It cannot be overemphasized that people the world over were not compelled to use gold as money. They gravitated […]

What is money?

Money, like the wheel, was one of mankind’s most important inventions. Before the development of money all exchanges were on a barter basis — the trading of one good directly for another. For example, if a hatmaker needed a pair of shoes, he had to find a shoemaker who needed a hat, an exceedingly inefficient […]

Economic law has not been invalidated by new government powers and improved technology. The inevitability of a depression continues.

The more things change, the more they stay the same. —— Each generation thinks it’s special in some way, and that new rules apply. So they consciously repeat the errors of their ancestors, hoping that this time the consequences will be different. It’s always turned out the same, however. Doug Casey, Crisis Investing