Gold Standard Institute's blog

Jamie Dimon, JP Morgan Chase
Brian T. Moynihan, Bank of America
Michael Corbat, Citigroup

I am writing to you to warn you about the disruption that is about to occur in banking.

There is a populist idea of money printing. The idea is that banks can just print what they want, enriching themselves... does it really work this way?

Most people assume that prices move as a result of changes in the money supply. Instead, let’s look at the effect of changes in interest.

On Dec 16, Federal Chair Janet Yellen announced the Fed was raising the federal funds rate by 25 basis points. She will have to take it back.

Many people wonder why couldn’t we let the market set the interest rate. After all, we don’t have a Corn Control Agency or a Lumber Board. So why do we have a Federal Open Market Committee? It’s a very good question.

Scott Sumner said he had a “modest” proposal: there should be a highly liquid futures market in Nominal Gross Domestic Product. Let's look at that.

The flip side of falling interest rates is rising bond prices. Bonds are in a ferocious bull market. It's gobbling up capital like the Cookie Monster jamming tollhouses into his maw.

Many think of government interference like friction in a car: the more you add, the slower the car. One source of friction is the same as any other.

Monetary policy doesn’t quite work the way tax or regulation does.

Stagnation is but a small price to pay, Europeans think, to achieve the goal of everyone being taken care of. 

If you borrow cash then it’s not income. No one in his right mind borrows to buy consumer goods... But what if someone else borrows, is that your income?

Central bank apologists assert that ZIRP helps the economy. It hasn’t and it won't. However, the main concern by both Fed defenders and foes alike is consumer prices. Both miss the real harm of zero interest.

To make people eat their seed corn, we need to add the essential element: a perverse incentive. There’s only one way to make everyone play a perverse game: force. Let’s look at monetary policy in this light.

Imagine running a rink company at the end of the roller skating fad in the 1980's. You know it is not going to survive for long. How do you operate your business? You milk it. Well, that's now happening across the entire economy.

It's time to challenge the notion that the decline of a currency can be measured simply by the rate of price increases. This price-centric view misses the ongoing hyperinflation.

Greece has no future, so long as it clings to the euro. The dollar won't servce you much better. A drachma will only harm the Greek people. That leaves one other option.