A few years ago I wrote a letter to the editor of Bioscience Hypotheses, a journal in which, shortly before, I had published an article speculating on the cause of Bee Colony Collapse. One of the reasons I chose that forum for my editorial was that it seemed to me (and it still does) that [...]
There are quite a few so-called “libertarian” groups touting so-called “anarcho-capitalism”. To my mind this term is nothing but an oxymoron that serves to confuse people who have otherwise correct instincts. This might be because one of the apparent proponents of the idea was none other than Murray Rothbard. It’s possible, then, that this is [...]
One of the virtues of being a generalist is the ease with which one can often detect a con. While the specialist examines the bark of a single tree, the generalist sees the forest for the trees. The generalist’s overall knowledge of surrounding area often gives him vital clues, even before any specialized investigation begins. [...]
This post is again inspired by an article from The Freeman, the magazine for the Foundation for Economic Education. In thinking about it now, I imagine that today I would disagree on some level with a great many of the articles published in the Freeman over the years. Some ideas are more distressing than others, [...]
In the first part of this two-part series on inflation and deflation we discussed how money came to be used to facilitate trade. Metals were the best commodities for use as money because they were durable, relatively rare, and were easy to mold into identical pieces. As the wealth of people grew, however, they’re store [...]
What exactly does it mean to be a “soft science”? Over the holidays I got into a discussion with a relative about just this topic. Economics, he told me, is a “soft” science, unlike physics which is a “hard” science. What exactly is the difference? The word “science” itself is a somewhat fuzzy term. It [...]
It sounds strange to a lot of people that both deflation and inflation are being talked about right now as if they could possibly happen at the same time. If inflation is rising prices, and deflation is falling prices, how could they happen at the same time? In fact, there are two distict meanings for [...]
Cryptogon is an excellent news site which I highly recommend to anyone who would like his news pre-filtered for importance. In a recent post Cryptogon expresses surprise that the Fed might start buying treasuries. In fact, most of us have been wondering why the Fed HASN’T been buying treasuries, since, in fact, this is what the Fed does (buy treasuries in the open market) [...]
At this point, it’s worth taking a look at what happened in 1929. If you’re not yet familiar with this chart, let’s just say that you probably will become familiar with it over the next few years. This chart is from Yahoo. Click the image to go to Yahoo’s Finance site and play with it [...]
The idea that the government can bail out everybody seems to have given the market a kick. Personally, I think this is a whole lot of frantic short covering related to the attempt by the government to fix the prices of certain securities. In my humble opinion this can only lead to more pain later. [...]
Note: if you are searching for the Austrian Business Cycle and landing here, you might be interested in The Dow/Gold Zoom, which is a chart that shows the Dow Jones Industrial Average priced in gold. This might help you to get an idea where we are in the “cycle”. The relationship between short and long [...]
There is often talk in the financial papers about the “savings rate.” You’ll often see pundits making moral judgments about how Americans spend too much and save too little implying that the average American is a spendthrift, wasting resources, and living on borrowed time. On the flip side, there are those who say the economy [...]
Here I’ve adjusted the prices of gold and silver to the M2 money supply figure. Note the spike in the price of silver relative to gold in 1979. This chart is in pdf format. Silver and Gold M2 Adjusted
In any study of economics, it’s important to remember — all prices are ratios. That means that they are always in flux as the values of one or the other or both commodities change, whether one of those commodities is used as money or not. This is, of course, a lesson we wish politicians could [...]
Just how high is the price of oil? The CPI is a rather suspect inflation indicator, so here are oil prices adjusted for the M3 money supply. As M3 has been discontinued, this chart will no longer be updated. I may consider publishing a version of it using M2 or a reconstructed version of M3. [...]