clb09
07-17-2010, 06:45 PM
http://mises.org/journals/scholar/salerno.pdf
http://www.lewrockwell.com/thornton/thornton23.html
Farrell explains what price deflation is and what causes it. The major theme of the book is that we have entered an era of deflation and that this is not the horrible phenomenon that it is often portrayed to be.
http://jessescrossroadscafe.blogspot.com/2010/07/austrian-economics-true-money-supply.html
"One fact should be pointed out in terms of the current economic crisis. There has been no monetary deflation -- that is, an absolute decrease in the quantity of money and credit in the economy. Just the opposite. Since 2008, the Federal Reserve has increased the total amount of reserves in the banking system by around $1.5 trillion, mostly by buying up many of those "toxic" mortgages that were guaranteed by Fannie Mae and Freddie Mac.
This huge expansion in the potential quantity of money and credit that could flood through the financial markets and generate significant price inflation has been held off the market due to the fact that the Federal Reserve has been paying banks interest to hold those sums as unlent reserves. With key market interest rates being kept artificially low at near zero or one percent through activist Fed policy, banks have found it more profitable earn that positive rate of interest at the Federal Reserve.
But unless the Fed finds some way to drain those "excess reserves" out of the banking system, significant inflationary -- not deflationary -- forces may be at work looking to the next few years ahead."
http://mises.org/journals/qjae/pdf/qjae6_4_3.pdf
http://www.lewrockwell.com/thornton/thornton23.html
Farrell explains what price deflation is and what causes it. The major theme of the book is that we have entered an era of deflation and that this is not the horrible phenomenon that it is often portrayed to be.
http://jessescrossroadscafe.blogspot.com/2010/07/austrian-economics-true-money-supply.html
"One fact should be pointed out in terms of the current economic crisis. There has been no monetary deflation -- that is, an absolute decrease in the quantity of money and credit in the economy. Just the opposite. Since 2008, the Federal Reserve has increased the total amount of reserves in the banking system by around $1.5 trillion, mostly by buying up many of those "toxic" mortgages that were guaranteed by Fannie Mae and Freddie Mac.
This huge expansion in the potential quantity of money and credit that could flood through the financial markets and generate significant price inflation has been held off the market due to the fact that the Federal Reserve has been paying banks interest to hold those sums as unlent reserves. With key market interest rates being kept artificially low at near zero or one percent through activist Fed policy, banks have found it more profitable earn that positive rate of interest at the Federal Reserve.
But unless the Fed finds some way to drain those "excess reserves" out of the banking system, significant inflationary -- not deflationary -- forces may be at work looking to the next few years ahead."
http://mises.org/journals/qjae/pdf/qjae6_4_3.pdf