Money & Banking

The establishment of gold as money is essential to the achievement of a capitalist society.

We observe a run on deposits in a commercial bank, then observe that the same thing can happen to other financial institutions, then mistakenly assume these institutions are essentially the same.

Since government regulatory practice has gone beyond making loans to illiquid-but-solvent banks, to paying back all the deposits of insolvent banks, the result is that there is no reason for depositors to care about whether their bank is taking excessive risks.

One good way to understand the current monetary system is to gain a basic understanding of banking history.

The U.S. government has long been waging war on savings, making it the cause of, rather than the solution to, low savings rates.

Commercial banks do not lend out other peoples’ money. On the contrary, banks create new money every time they make a loan.

In 1936, in his General Theory of Employment, Interest and Money, Lord Keynes unfortunately elevated this method--the emergency measures of the period between 1929 and 1933--to a principle, to a fundamental system of policy. And he justified it by saying, in effect:...

If inflation is bad and if people realize it, why has it become almost a way of life in all countries? Even some of the richest countries suffer from this disease. The United States today is certainly the richest country in the world, with the highest standard of...

The government may think that inflation--as a method of raising funds--is better than taxation, which is always unpopular and difficult. In many rich and great nations, legislators have often discussed, for months and months, the various forms of new taxes that were...

If Canada’s relatively “free” banking system was so stable, why did the Canadian government establish the Bank of Canada in 1935? And why did it establish a Canadian Deposit Insurance Corporation (CDIC) some three decades later?

When people talk of a "price level," they have in mind the image of a level of a liquid which goes up or down according to the increase or decrease in its quantity, but which, like a liquid in a tank, always rises evenly. But with prices, there is no such thing as a...

If the supply of caviar were as plentiful as the supply of potatoes, the price of caviar--that is, the exchange ratio between caviar and money or caviar and other com­modities-would change considerably. In that case, one could obtain caviar at a much smaller...

Whether the bank sanctions hurt Putin or not, they will have far-reaching effects on many innocent people, and not only in Russia. To understand these effects, consider what happens when a bank account is “frozen.”

Those dollar bills in your pocket came from bank deposits, created out of thin air.

How does money come into existence today?

There’s nothing unfair about wealth disparity in a free market, but the economic divide caused by QE is a gross injustice.

Is consumer price inflation transitory or persistent?

Those who advocate a world without money advocate an impossible fantasy where nobody would be incentivized to work and rights would be violated as a matter of course.

The Fed’s fixation on consumer prices disguises the real inflation rate.

Record profits are not the sign of a resilient economy but an inflationary effect of reckless money creation

The current fiat monetary system is a zombified version of the original and Bitcoin is no answer to the perversion of a gold sound money system.

Central banking “independence” from politics (fiscal profligacy) seems to be a thing of the past.

It is more convenient for the government to argue that inflation is due to supply-chain shocks or scapegoats (such as evil corporations) than admitting it is of their own doing.

“Although commercial bankers often err in deciding who to lend to, I believe they are far less likely to do so than a body of government-appointed bureaucrats.” – George Selgin