I recommend that you watch the video "The Fall of Minneapolis," which deals with the death of George Floyd and related events. You can watch it on Rumble.com. I also recommend that you view some of the video related to the events at the Nation's Capital on January 6, 2021. I will resist the temptation to … Continue reading The Fall of Minneapolis
Month: November 2023
Wizard Revealed
When Ben Bernanke ballooned the level of total reserves in the banking system, he did two things. First, he made the amount of excess reserves totally irrelevant. Second, he revealed that the dollars created by the Federal Reserve, contrary to popular belief, have never acted as money. The following chart provides a visual depiction of … Continue reading Wizard Revealed
See You Next Week
I realize that on Thanksgiving weekend, people are either eating, sleeping, or traveling. More than likely, very few people are interested in reading newsletters from a voice in the wilderness. I'm giving myself this long weekend to catch up on a lot of work that I have ignored. I will see you back here early … Continue reading See You Next Week
The Role of Bank Reserves
The role of bank reserves requires frequent explanation, because of widespread misunderstanding. Bank reserves do not act as a form of money. They never have. When people used gold as a form of money, and banks had 100% reserves, banks would hold gold to back the claims represented by banknotes or checks. While held as … Continue reading The Role of Bank Reserves
Market Complexity
Consumers play a critical role in a well-functioning market. Consumers consisted of a byproduct of production. Consumers can neither consume nor acquire things to consume without first producing. These facts might lead one to assume that centralized control might make a more efficient market. Before I continue and describe why this cannot work, I would … Continue reading Market Complexity
Stabilization and Stimulation
The words stabilization and stimulation encapsulate what the Federal Reserve and the Federal Government are trying to do to resolve the economic uncertainties. Entire textbooks have been written about each of these topics separately. I just want to introduce the concepts and open the door for numerous articles in the future. Briefly, these words refer … Continue reading Stabilization and Stimulation
Description of Exchange
Introduction The principle of exchange might seem obvious. It gets ignored, however, in many discussions of "buying," "selling," "international trade," and other market activities. These terms all represent internal references. (Left and right are internal references; north and south are external references.) Accurate discussions of market transactions require using an external reference: "exchange." A consciousness … Continue reading Description of Exchange
Division of Labor and Comparative Advantage
Fallacies of Equality and Equity It seems that many people are concerned about promoting either equality or equity. If you believe in either equality or equity, you're living in a fantasy land — a land that only exists in your imagination. A perfect circle, for example, can only exist in the mind of a human. … Continue reading Division of Labor and Comparative Advantage
Resource Allocation
A Review Before I continue discussing the allocation of resources in a free market, I would like to recap some of the points that I have made in other blog posts. First, the concept of consumer sovereignty means that the whole purpose of production and markets consists of satisfying the needs of consumers. Second, because … Continue reading Resource Allocation