Consulting by RPM || Free Advice Blog

Yellen for Fed Chief! (Matt O’Brien Is Easy to Impress.)

Check out Matt O’Brien’s case for Janet Yellen over Larry Summers as the next Fed chief (HT2 Scott Sumner): After serving as a Fed governor from 1994 to 1997, as president of the San Francisco Fed from 2004 to 2010, and as Fed Vice-Chair for the past three years, Yellen has emerged as one of […]

Who Said It?

Look at this guy talking about China: China is in big trouble. We’re not talking about some minor setback along the way, but something more fundamental. The country’s whole way of doing business, the economic system that has driven three decades of incredible growth, has reached its limits. You could say that the Chinese model […]

Sumner Turns His Interest Rate Liability Into an Asset

I have long said that I would be much more confident debating Paul Krugman than Scott Sumner. I disagree with Krugman on economics, you see, but with Sumner our disagreement is almost metaphysical. For example, Austrians like me think that the 1929 stock market crash was (partially) due to expansionary Fed policy during the 1920s, […]

Can the Fed Become Insolvent?

In light of my recent posts on Morgan Stanley’s analysis of this question–which show that a rise of less than a percentage point across the yield curve would render the Fed “bankrupt”–let me direct you to my original Mises.org essay on this question. I walk through various hypothetical Fed balance sheets to show what we […]

The Fed’s Equity

Given the recent rise in Treasury yields, I asked Caitlin Long (an Austrian at Morgan Stanley) if they had reevaluated the Fed’s equity. She said (and gave me permission to relay to you folks) that as of mid-June, just over half of the mark-to-market cushion remained. That means an additional 80bps shift in the yield […]

It’s Easy to Be Right When You Don’t Admit You Were Wrong

I’m going to be laying into my two favorite bloggers–Paul Krugman and Scott Sumner–for their slippery handling of the recent rise in Treasury yields. As I’ve said several times on this blog, I think Krugman and Scott do this a lot (Krugman is more annoying about it); it’s just that this is a particularly obvious […]

Night of Clarity 2013, Featuring Ron Paul

Scott Sumner Tries Not to Laugh at Those Silly Inflation Hawks

Scott writes: Back in the Great Depression the inflation hawks said two things; monetary stimulus would do nothing (it was just pushing on a string) and it would do too much, producing hyperinflation. Keynes is now viewed as a genius, because he just made one of these two errors; assuming monetary stimulus would do nothing. […]