The Monetary Conservative: Jacques Rueff and Twentieth-century Free Market Thought

Jacques Rueff, a key figure in European economic circles from the 1930s until the 1970s, was, first and foremost, an empiricist: he believed that economic policy should be based on impartial analysis of the evidence. And that evidence – which he derived from pioneering, detailed statistical analysis – showed that the economy functioned in large part due to the equilibrating role of prices.   Thus, any attempt to intervene in the efficient functioning of the price mechanism, whether through the dole or through inflation, would undermine the economic – and social – order. As Christopher Chivvis, …Read more

Paying Too Much at the Grocery Store and at the Pump? You Can Thank the Fed

It is commonly said by Americans that the harder they work, the further they fall behind. Well, they’re right. Since 2000, household median income measured by the Census Bureau has only averaged 1.77 percent growth. In the meantime, the prices of staples like food and energy have been skyrocketing. Oil is up at an average annual rate of 16.18 percent since. Food is up 6.8 percent a year. Of course, the Bureau of Labor Statistics consumer price index would have you believe that inflation has only averaged 2.43 percent a year since then. But, even then, wages are not keep up with that measure. Leaving …Read more

Is the International Monetary System Nearing Collapse?

Yesterday, I finished reading James G. Rickards' new book, The Death of Money. It's a book that asks a lot of important questions. The book speculates about potential future changes to the international monetary system. Today, the main reserve currency in the world — used for the buying and selling of energy, resources, and other international trade, as well as a store of purchasing power for governments, corporations, and international institutions — is the United States dollar. of countries' monetary reserves are held in U.S. dollars. This demand for dollars means that the international …Read more

The Most Important Thing Holding Up the US Dollar

Today’s economic conditions reflect a fiat monetary system held together by many tricks and luck over the past 40 years. The world has been awash in paper money since removal of the last vestige of the gold standard by Richard Nixon when he buried the Bretton Woods agreement — the gold exchange standard — on August 15, 1971. Since then we’ve been on a worldwide paper dollar standard. Quite possibly we are seeing the beginning of the end of that system. If so, tough times are ahead for the United States and the world economy. A paper monetary standard means there are no restraints on the …Read more

Yellen’s Missing Jobs

The new Federal Reserve chairman, Janet Yellen, gave a policy speech today at Chicago, where, in a startling gesture, she mentioned three working individuals by name — Jermaine Brownlee, Vicki Lira, and Doreen Poole. They lost their jobs the Great Recession and have been struggling ever since. It was a refreshing, even affecting demarche by Mrs. Yellen, who has made a return to full employment a public priority. She underscored her sincerity by telephoning Mr. Brownlee and Ms. Lira and Ms. Poole before delivering her speech. All the greater the sense that the three — and the millions of …Read more

Time to Tackle The Fed

Why is the Federal Reserve the sacred cow of American politics? It’s not because it has done a stellar job. Its fundamental, serial errors in the 1970s, after the U.S. blew up the gold-based Bretton Woods international monetary system, gave us and the world the Great Inflation and a discouraging, debilitating decade of stagnation. The Fed’s pursuit of a weak dollar, which started in the early 2000s, has been an unmitigated disaster. It created the horrific housing bubble. destructive experiment known as quantitative easing distorted the credit markets, thereby unfairly helping pile on debt …Read more