Matt, you must be channeling the hard-money, gold-bug right, people like Jim Grant and Bill Fleckenstein. They've been saying stuff like this about the Fed for more than 20 years. I first learned about the Cantillon effect from reading Murray Rothbard, Mr. Anarcho-Right, "denationalize money" himself from decades ago. Rothbard was the main thinker responsible for the introduction of the Austrian School into economics in the US, apart from Hayek, who became well-known for The Road to Serfdom on his own.
Earlier this year, the Grant's Interest Rate Observer podcast did an amazing interview with Karen Petrou, who published book last year about how much our economy and society have been distorted by the Greenspan-Bernanke-Yellen-Powell era in Fed policy. You should interview her. An urgent necessity: an end to QE and a return to moderate positive real rates. This is the 2021 equivalent of what Volcker did with inflation in 1980-83. It will be painful, because the problem is deeper, longer-lasting, and more insidious than in the late 1970s.
The master book from this point of view, apart from Grant's books, is The Great Deformation by David Stockman, a reformed ex-private equity shark and Reagan's one-time budget director. His diagnosis runs much earlier, back to the Populist era and the rise of "flexible money," which eventually became captured by the Washington-Wall Street alliance. He talks quite a bit about the distortions in M&A and other consolidations driven by a long era of negative real interest rates and unlimited free credit at zero nominal rates.
All these asset markets go nuts under these conditions for the simple reason that there's no longer any check on the credit creation machine that benefits a narrow, self-serving class (which includes many political figures in DC) -- no gold standard, no reserve ratios, no Glass-Steagall Act.
Until then, I shall continue to tease you about your ill-disguised hard-money, gold-bug right-leaning tendencies when it comes to the Fed. These are *real* libertarians BTW, not neoliberals. Keep that distinction in mind ;-)
Matt, you must be channeling the hard-money, gold-bug right, people like Jim Grant and Bill Fleckenstein. They've been saying stuff like this about the Fed for more than 20 years. I first learned about the Cantillon effect from reading Murray Rothbard, Mr. Anarcho-Right, "denationalize money" himself from decades ago. Rothbard was the main thinker responsible for the introduction of the Austrian School into economics in the US, apart from Hayek, who became well-known for The Road to Serfdom on his own.
Earlier this year, the Grant's Interest Rate Observer podcast did an amazing interview with Karen Petrou, who published book last year about how much our economy and society have been distorted by the Greenspan-Bernanke-Yellen-Powell era in Fed policy. You should interview her. An urgent necessity: an end to QE and a return to moderate positive real rates. This is the 2021 equivalent of what Volcker did with inflation in 1980-83. It will be painful, because the problem is deeper, longer-lasting, and more insidious than in the late 1970s.
The master book from this point of view, apart from Grant's books, is The Great Deformation by David Stockman, a reformed ex-private equity shark and Reagan's one-time budget director. His diagnosis runs much earlier, back to the Populist era and the rise of "flexible money," which eventually became captured by the Washington-Wall Street alliance. He talks quite a bit about the distortions in M&A and other consolidations driven by a long era of negative real interest rates and unlimited free credit at zero nominal rates.
All these asset markets go nuts under these conditions for the simple reason that there's no longer any check on the credit creation machine that benefits a narrow, self-serving class (which includes many political figures in DC) -- no gold standard, no reserve ratios, no Glass-Steagall Act.
Until then, I shall continue to tease you about your ill-disguised hard-money, gold-bug right-leaning tendencies when it comes to the Fed. These are *real* libertarians BTW, not neoliberals. Keep that distinction in mind ;-)
Nice Austrian take here.