Sound Banking
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Central Bankers, Let the Price System Work!
“Congress is free to define ‘price stability’ however it wishes. If it wants a strict inflation target in all circumstances, that’s its right. But legislators would be well-advised to pay close attention to the microeconomic foundations of monetary policy.” ~ Alexander W. Salter
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Who Bears the Burden of Dollars’ Falling Purchasing Power?
“Inflation is not a one-trick pony, with an easily predictable outcome. Rather, it does several things at the same time. Looking at claims like the eradication of a dollar’s purchasing power is misleading: it is not the case that inflation has ripped off savers by eradicating 97% of their savings’ worth.” ~ Joakim Book
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The Fed Is Not Independent, But It Should Be
“To be an effective central bank, the Fed must strive to remain independent of short-term political influence. A strict separation of monetary and fiscal policies helps bolster central bank independence.” ~ Thomas L. Hogan
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Free Down Payments and Subsidized Mortgages are Not Social Justice
“Despite 50 years of debacles, politicians are still glorified for pretending that free downpayments and subsidized mortgages are “magic beans” that multiply social justice in America.” ~ James Bovard
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Banking the Unbanked: Lessons from the Developing World
Access to financial services, or “financial inclusion,” has long been recognized as a critical step towards escaping poverty. Having a bank account enables people to protect their savings, diversify risk, lower […]
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When Did the Bank of England Become a Lender of Last Resort?
It happened sometime after the crisis of 1847.
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Narrow Banks, Very Narrow Banks, and the Federal Reserve
A bank charter has been granted to The Narrow Bank in Connecticut. But the idea of narrow banking is not new.
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Sound Money Project Essay Contest
What are the merits of returning to the gold standard? Is such a system feasible today?
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The Costs of Dodd-Frank
The jury is still out on whether Dodd-Frank has made the financial system more robust. But we are starting to get a clearer picture of what impact it has had on compliance cost, bank lending, and bank consolidation.
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Safe Banks Are Probably Not What You Want
Why wouldn’t we want safe and stable banks? Like almost everything else in economics, benefits in one area comes with real costs in others.
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How Do Bankers Create Value?
Successful banks move resources from lower-value to higher-value uses while unsuccessful banks move resources from higher-value to lower-value uses.
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Going Postal
Some politicians are calling for the return of postal banking. Should we heed their call?
