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Introduction to US Monetary Policy

I think I posted this when it came out earlier this year, but if not, here's a study I did for Mercatus that is intended as an introduction to US monetary policy, including some history, some theory, some policy, and some discussion of alternative institutional arrangements.  I hope folks find it useful.

  • Paul Marks

    "not creating enough money can lead to the massive deflation that turned the recession into the Great Depression of the 1930s….."

    Oh dear.

    The old legend that the correct way to deal with a credit bubble bust (a "collapse of broad money" – bank credit, loans that were NOT from Real Savings) is for the Central Bank to produce lots of money and hand it to the banks.

    As for money…….

    Future historians will note that the coinage became (essentially) worthless half a century ago (when the silver was taken out of the coins) and that even the promise of gold (to overseas government) was revoked more than 40 years ago (1971).

    The rest of the story (what is happening now) is a natural consequence of endlessly trying to prop the banks by producing more money whenever the banking credit bubbles (the loans that are NOT from real savings) look like they are going to collapse.

    The present monetary system is doomed.

    The "Gods of the Copybook Headings" will not be denied for ever.