The Gold Standard 

Argentina is once again wrestling with its long-time enemy, inflation. Now, it appears history may soon repeat itself, as Argentina teeters on the verge of another currency crisis. As of Tuesday morning, the black-market exchange rate for Argentine pesos (ARS) to the U.S. dollar (USD) hit 9.87, meaning the peso’s value now sits 47.3% below the official exchange rate. This yields an implied annual inflation rate of 98.3%. For now, Read more

The most recent banking crisis in Europe eruptedon the Island of Cyprus. Among other things, one result of the final EU-IMF bailout package was the imposition of capital controls, or restrictions on currency convertibility. Currency convertibility is a simple concept. It means residents and nonresidents are free to exchange domestic currency for foreign currency. However, there are many degrees of convertibility, with each denoting the Read more

The political elites in Brussels can once again breathe a sigh of relief. Cyprus did not implode and take the euro with it. In many ways, the latest drama in Cyprus followed a familiar pattern: the so-called troika of European leadership (the European Commission, the European Central Bank, and the International Monetary Fund) flew to a country on Europe’s periphery to rescue its failing banks, that country’s leadership balked, and then eventually caved to Brus Read more

The year 2012 has come and gone, and so have many things that were once accepted as conventional wisdom. Let’s take a tour d’horizon and examine three ideas that bear rethinking in 2013.

Rethinking the Money Supply

I begin with the nonsensical way that most central banks, including the U.S. Federal Reserve, measure the money supply. Conventional wisdom holds that the best way to measure the money supply is to define the components that make up a particular measure of money (from M0 to broad M4) and then simply add up Read more