Tuesday, September 2, 2014

COMPREHENSIVE LOOK A THE CURRENT STATE OF FOREIGN POLICY: There is very little positive about where we are heading under this feckless administration.We need a change of leadership in a hurry

THE FLASHMAN SERIES: This sounds like fun reading. As well as this.http://mises.org/daily/6861/A-Sad-End-for-Flashman

SOME AUSTRIAN ECONOMICS:  What is controversial about the money multiplier is not its existence, but whether or not it creates distortions in the economy. The distortions introduced into the economy by fractional reserve banking, and to an even greater extent by central banking, comprise the central element of Austrian business cycle theory. The basic idea is that the creation of money (which is also credit, since that new money is loaned into existence) increases the supply of loanable funds and lowers market interest rates without increasing the supply of voluntary saving. This misleads investors into believing that more resources have been made available by savers for investment projects than actually have been made available. Thus, projects are started on too big a scale since many investors try to exercise a claim on the same productive resources. In so doing, they will bid up the resource prices, slashing the profitability of many of these investment projects. This is the real goods sector counterpart of bank runs in the monetary sector. Since there is no real goods sector counterpart to deposit insurance, firms will run short of the resources necessary to profitably complete their investment projects, exposing them as malinvestments and turning boom to bust.The entire article is here.