Classical Economics in a Quantum World
Financial media, pundits, economists, government officials, and pretty much everyone else continue to categorize rate hikes as if the Fed were still conducting policy under normalized, traditional operating procedures. Bernanke tore asunder normalized Fed operating procedures after the 2008 financial…
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Understanding Gold 7 The Ratio of Two Ratios The unique properties of gold combined with how the Fed operates determines the dollar price of gold (POG). Similarly, other central banks’ monetary management determines the POG in their currency. Because gold…
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Massive, long-term excess reserves are the anomaly that resulted from deviation of historic Fed monetary policy that began in 2008. From 1913 to 1971 the Fed targeted a dollar fixed weight of gold to determine the economy’s required base money,…
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There is a palpable glee among some that is evident whenever the price of gold falls.¹ It manifests itself in the media, academia, pundits, and certain segments of the investment world. Paul Krugman becomes orgasmic. A fall in the price…
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The Opening Salvo Regardless of what you think about Trump, he recently did the world a big service. He pointed out, in his unique, unadulterated style, the monetary elephant in the room to a global audience. Trump’s attack on the…
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Fed Operating Targets The latest round of will-the-Fed-or-won’t-the-Fed-finally-hike-rates has passed. The world waited breathlessly for the Federal Reserve to announce their latest FOMC decision. Once again, the Fed punted on announcing another measly .25% funds rate hike and averted the…
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Understanding Gold 4 On August 15, 1971, Nixon, by executive order, broke the dollar-gold link that had anchored the Bretton Woods international monetary system since 1944. (The link was officially severed in February 1973.) This was the beginning of the…
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Despite its present day seeming omnipotent power, the Fed still retains only one significant economic lever.¹ This has been true since the Fed’s creation in 1913. The Fed can create base money or remove it. The Fed has complete, total…
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Understanding Gold 3 As Warren pithily observed, gold does get dug out of the ground. Not just in Africa. Gold is found on every continent on earth. This is one of gold’s many monetary properties. If one is looking for…
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In The Scandal of Money, George Gilder delivers the monetary bookend to his 1981 influential fiscal policy best seller, Wealth and Poverty. W&P greatly influenced Reagan’s economic blueprint for tax cuts across the board, welfare reform, and entrepreneurial fiscal policy. …
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