"The really catastrophic depressions are where the rot in the financial system goes very deep."
John Hicks, the first Englishman to win the Nobel Prize in Economics
The phrase "all hat and not cattle" perfectly describes the Fed of the post-2008 crisis era. For those that don't know, the phrase describes someone who looks the part of a cowboy and talks like a cowboy, but, when push comes to shove, is incapable of performing any of the difficult tasks traditionally performed by a cowboy.
Over the past three weeks, the Federal Reserve's metamorphosis from the traditional and passive 'lender of last resort to today's central planning leviathan has been described. Recall that the founding basis for a central bank was to only serve as an emergency lender of last resort. This basis was famously described by Walter Bagehot as, "in a crisis a central bank can lend freely but only ag
Despite what all our supposed betters in the European Union and their proxies among the elite in this country are constantly lecturing to us, the French Revolution wasn't a triumph of the intellect and reason. It was a triumph of terror and the fanatical zeal which motivated it. As such, the French Revolution was a harbinger of the modern political movements that followed in its wake. Like a
In last week's article, the founding basis for central banks was described in terms of Bagehot's dictum. Namely, that "in a crisis a central bank can lend freely but only against good collateral and only at high rates of interest." In a word passive and the proverbial lender of last resort. Also discussed was the concept of "normalization of deviance." Normalization of deviance describes ho