Monetary Policy

If wealth could be created out of scraps of paper or their digital equivalent, world poverty would be a thing of the past. Remember, the commodity money takes care of itself—and us too, if we let it.

The mainstream economic belief is that a growing economy needs a growing money supply to ensure “price stability.” Austrian economists, however, believe that there is no “optimum” money supply, which means government should not engage in monetary expansion.

David Brady, Jr. reviews The Magic Coin by Dr. Jonathan Newman, a children‘s book that explains money in a way that even modern adults can understand.

David Brady, Jr. reviews Jonathan Newman's latest children‘s book that explains money in a way that even modern adults can understand.

William Nordhaus coined the term “political business cycle” a half-century ago. The idea was that government authorities, particularly the central bank, would manipulate the economy to correspond with election cycles, a practice that continues to this day.

Mainstream economists define inflation as the increase in an imaginary “price level” that is relatively neutral in its effects. Austrian economists, however, know better, as they realize that the effects of inflating the money supply are anything but neutral.

The Trump White House has enacted tariffs in the belief that other countries are “cheating” by enacting tariffs against US goods and “manipulating” their currencies. However, with the US dollar being the world's reserve currency, the US has engaged in dollar manipulation through inflation.

MMT uses chartalism and a few dubious examples to appeal to history to establish the theory‘s authority and validity, only to discard this element as irrelevant and unnecessary.

MMT uses chartalism and a few dubious examples to appeal to history to establish the theory‘s authority and validity, only to discard this element as irrelevant and unnecessary.

In a sound monetary system and a free market, overall prices would generally fall as the economy grows faster than the money supply, enabling people to purchase more with their money.