Saturday, June 5, 2021

Robert Wenzel - 1957 to 2021

We are deeply saddened to announce the passing of Robert Wenzel. Robert passed away peacefully in his sleep on May 25th, 2021 in San Francisco, CA. He was 63.

Robert was buried in a private ceremony for family and close friends at Tulocay Cemetery in Napa, CA on June 4th, 2021.

In keeping with Robert's wishes, we plan on keeping both and live on the web as archives of Robert's work.

We'd like to thank all of the readers of both and for their support of Robert's work over the years.

We'd further like to thank all of those individuals who have created touching tributes to Robert in recent days.

He loved sharing and debating his ideas and opinions with you and know he would want you to carry the torch of liberty forward into the future.

--The Family of Robert Wenzel

Tuesday, May 25, 2021

Once Again, Former Treasury Secretary Larry Summers Warns About Price Inflation

The Keynesian establishment economist, former Treasury Secretary Larry Summers, must be given credited for recognizing the price inflation tsunami headed our way.

His understanding as to what is developing is much more reality-based than that of current Treasury Secretay Janet Yellen and Federal Reserve Board Chairman Jay Powell.

Summers writes in a new Washington Post column:

 The consumer price index rose at a 7.5 percent annual rate in the first quarter, and inflation expectations jumped at the fastest rate since inflation indexed bonds were introduced a generation ago. Already, consumer prices have risen almost as much as the Fed predicted for the whole year...

We are seeing very substantial inflation,” Warren Buffett recently observed in remarks typical of business leaders throughout the country. “We are raising prices. People are raising prices to us, and it’s being accepted.”

Fed and Biden administration officials are entirely correct in pointing out that some of that inflation, such as last month’s run-up in used-car prices, is transitory. But not everything we are seeing is likely to be temporary. A variety of factors suggests that inflation may yet accelerate...

 How much does it matter whether inflation accelerates? In general, increases in inflation disproportionately hurt the poor and are associated with reductions in trust in government.

Summers does make some shaky Keynesian-style policy recommendations in his essay but the fact he recognizes the developing price inflation is the key thing. He is pretty much ahead of anyone in the Biden administration in understanding what is developing.


Monday, May 24, 2021

Biden Drops Student Loan Forgiveness From Latest Budget

"Call Congress on that thing."

Joe Biden will not include any student loan cancellation in his annual budget, according to The Washington Post.

It is all part of his desire for Congress to enact student loan cancellation through legislation.

It is not exactly clear why he does not want to implement an executive order, when he has done so on so many other issues.


Defending the Shopper Who Leaves the Shopping Cart in the Parking Lot


See Dr. Block's discussion of litter in the private sector in Defending the Undefendable. Maybe people want their carts retrieved as a convenience---which may increase the number employed by a grocery store.

To return the cart might cause a cart retriever to have to seek other employment, which would be less desirable because he chose the cart retriever job in the first place.


Federal Reserve to Partner With MIT in Testing a Central Bank Digital Currency

Lael Brainard

I reported over the weekend an unusual video surrounding digital currencies that Federal Reserve chairman Jay Powell made last week: Federal Reserve Board Chairman Powell in Unprecedented Video Issues Commentary on Digital Currencies.

Now we have Federal Reserve Board Governor Lael Brainard following up this morning with a speech on digital currencies via webcast at the Consensus by CoinDesk 2021 Conference, Washington, D.C. that even includes reference to an MIT-Federal Reserve test of a central bank digital currency.

This morning she told the group:

Unlike central bank fiat currencies, stablecoins do not have legal tender status. Depending on underlying arrangements, some may expose consumers and businesses to risk. If widely adopted, stablecoins could serve as the basis of an alternative payments system oriented around new private forms of money. Given the network externalities associated with achieving scale in payments, there is a risk that the widespread use of private monies for consumer payments could fragment parts of the U.S. payment system in ways that impose burdens and raise costs for households and businesses. A predominance of private monies may introduce consumer protection and financial stability risks because of their potential volatility and the risk of run-like behavior. Indeed, the period in the nineteenth century when there was active competition among issuers of private paper banknotes in the United States is now notorious for inefficiency, fraud, and instability in the payments system.4 It led to the need for a uniform form of money backed by the national government.


To the extent that digital payments crowd out the use of cash, this raises questions about how to ensure that consumers retain access to a form of safe central bank money...

The Federal Reserve remains committed to ensuring that the public has access to safe, reliable, and secure means of payment, including cash. As part of this commitment, we must explore—and try to anticipate—the extent to which households' and businesses' needs and preferences may migrate further to digital payments over time.


 Given the potential for CBDCs to gain prominence in cross-border payments and the reserve currency role of the dollar, it is vital for the United States to be at the table in the development of cross-border standards.


[A] digital dollar would be a new type of central bank money issued in digital form for use by the general public. By introducing safe central bank money that is accessible to households and businesses in digital payments systems, a CBDC would reduce counterparty risk and the associated consumer protection and financial stability risks...One expected benefit is that a CBDC would reduce or even eliminate operational and financial inefficiencies, or other frictions, in payments, clearing, and settlement. 


Increase financial inclusion

Today 5.4 percent of American households lack access to bank accounts and the associated payment options they offer, and a further 18.7 percent were underbanked as of 2017...CBDC may be one part of a broader solution to the challenge of achieving ubiquitous account access.


To deepen our research on the technological design of a CBDC, the Federal Reserve Bank of Boston is partnering with Massachusetts Institute of Technology's (MIT) Digital Currency Initiative on Project Hamilton to build and test a hypothetical digital currency platform using leading edge technology design options.

There is no question a Federal Reserve digital currency is coming. They are now seeding the ground for this eventuality.

The digital currency environment is going to look very different in 5 years with CBDCs being prominent and private cryptocurrencies either heavily regulated and restricted if not outright banned.


Yellen to Attend G7 Finance Ministers Meeting in London

Janet Yellen

In-person globalist plotting is back on.

The Treasury Department has announced that Secretary Janet Yellen will attend the G7 finance ministers meeting in London from June 4-5, 2021. 

This will be the first overseas travel by Yellen since she assumed the Treasury Secretary position.


Memo Urges Republican House Members to Play Up the Accelerating Price Inflation

According to Axios, a memo being sent out by Rep. Jim Banks (R-Ind.), who leads the Republican Study Committee, urges Republican House members to play up concerns about the accelerating price inflation and to pin it on the Biden Administration.

From Axios:

 The document, carrying the subject line, "Tie Biden Agenda to Inflation," tells members to "explain to voters how inflation is Democrats’ hidden tax on the Middle Class."

  • It also provides a series of talking points such as telling voters "your dollar won’t go as far" if Biden continues to "devalue our currency," through COVID-19 stimulus payments and "generous unemployment benefits."
  • Banks also cites the warnings of Larry Summers, President Clinton’s Treasury secretary and former director of the National Economic Council during the Obama administration.
  • Summers cautioned in a Washington Post op-ed that Biden's stimulus could "set off inflationary pressures of a kind we have not seen in a generation."

Between the lines: Republicans have already drawn parallels between Biden and President Carter as inflation continues to seep into the public consciousness.

  • The memo is being sent Monday as members prepare to fly home to their districts this week for a three-week recess, beginning with the Memorial Day holiday.

While it is true that Biden is fueling the price inflation flames, it should be remembered that the price inflation tsunami, that is about to hit, started under the leadership of Donald Trump when the Federal Reserve increased the money supply by $4 trillion in 2020.

When it comes to price inflation, Biden, like Trump, will have no objections until the masses start to squawk.  


Keynes Was a Cheapskate

John Maynard Keynes

Let's start the week off with some serious John Maynard Keynes bashing.

In April, 1989, Murray Rothbard did a great job bashing Keynes (the person) at a Mises Institute event held in Harvard Square, Cambridge, Massachusetts.


 Although Rothbard gave Keynes a thoroughgoing over, he did not mention that Keynes was also a cheapskate despite the fact that on a political/philosophical level, as Rothbard mentioned, Keynes was anti-thrift. Talk about a hypocrite, Keynes was that from start to finish. I am sure Rothbard would have mentioned it if he were aware.

Anyway, the dirt is now out, Justyn Walsh reports:
Keynes, as one of his Bloomsbury contemporaries observed, “loved a bargain." Notwithstanding his growing wealth and generous financial support of the arts, he watched over his personal finances with surprisingly keen eyes. Keynes was not above haggling with tradesman over a few pence, would buy large consignments of war-issue bully beef because it was only a penny a tin, and hosted dinner parties that were legendary for their frugality. Virginia Woolf noted that on occasion Keynes served a miserly three grouse to his eleven guests - the visitors’ “eyes gleaned as the bones went round,” she later remarked with the regulation Bloomsbury barb.

Sunday, May 23, 2021

An Introduction to Austrian School Business Cycle Theory

In this edition of "This Week in Economics with Robert Wenzel," I discuss the boom-bust business cycle and the theory developed by Austrian school economists to explain it.


The podcast version is here

It is also available on your favorite podcast platform. If your platform does not carry the podcast just enter this feed address to start following "This Week in Economics":


Federal Reserve Chairman Powell in Unprecedented Video Issues Commentary on Digital Currencies

Jay Powell

The government appears to be getting ready to make a move in the digital currency arena.

For the first time ever, Federal Reserve chairman Jay Powell has issued a stand-alone video statement. The topic of the unprecedented video is digital currencies.

In the video, Powell comments on cryptocurrencies, stablecoins and central bank digital currencies.

Here are key snipetts:
The effective functioning of our economy requires that people have faith and confidence
not only in the dollar, but also in the payment networks, banks, and other payment service
providers that allow money to flow on a daily basis...

Recently, the rise of distributed ledger technology, which offers a new approach to
recording ownership of assets, has allowed for the creation of a range of new financial products and services—including cryptocurrencies. To date, cryptocurrencies have not served as a
convenient way to make payments, given, among other factors, their swings in value. 

Nonetheless, coins tied to the value of the dollar or another currency—known as “stablecoins”—have emerged as a new way to make payments. These stablecoins aim to use new technologies in a way that has the potential to enhance payments efficiency, speed up settlement flows, and reduce end-user costs—but they may also carry potential risks to those users and to the broader financial system...

echnological advances also offer new possibilities to central banks—including the Fed.
In particular, technology now enables the development and issuance of central bank digital
currencies, or CBDCs. A CBDC is a new type of central bank liability issued in digital
form. While various structures and technologies might be used, a CBDC could be designed for use by the general public.

For the past several years, the Federal Reserve has been exploring the potential benefits
and risks of CBDCs from a variety of angles, including through technological research and

To help stimulate broad conversation, the Federal Reserve Board will issue a discussion
paper this summer outlining our current thinking on digital payments, with a particular focus on the benefits and risks associated with CBDC in the U.S. context. As part of this process, we will ask for public comment on issues related to payments, financial inclusion, data privacy, and information security.
We are committed at the Federal Reserve to hearing a wide range of voices on this
important issue before making any decision on whether and how to move forward with a U.S. CBDC, taking account of the broader risks and opportunities it could offer. The paper represents the beginning of what will be a thoughtful and deliberative process. Irrespective of the conclusion we ultimately reach, we expect to play a leading role in developing international standards for CBDCs, engaging actively with central banks in other jurisdictions as well as regulators and supervisors here in the United States throughout that process.
The Federal Reserve remains committed to ensuring that the public has access to a safe,
reliable, and secure payments system. Our forthcoming paper on the evolution of digital
payments is intended—along with our other work as a supervisor, regulator, and payment system operator—to advance the objective of ensuring that the payments system and the economy work for all Americans. We look forward to hearing your thoughts on this important topic.

Bottom line: The Federal Reserve is making its first step to neuter the usefulness of private cryptocurrencies and introduce a central bank digital currency. 

There is just no way the Fed is going to allow any currency to emerge, digital or otherwise, that will take control of the money supply away from the hands of the Fed.

Powell's unprecedented video is evidence enough of this.

Below is the full Powell video5 minutes and 39 seconds).



Saturday, May 22, 2021

This is What It Costs to Get New York Knicks Playoff Tickets

TicketIQ found the average secondary-market price for seats to the Knicks’ first-round home games vs. the Atlanta Hawks at Madison Square Garden — $1,453 — is not only the most expensive opening-round NBA playoff price it’s ever tracked, but more expensive than any prior hoops series, excluding the NBA Finals, reports the New York Post.

The Knicks have announced they will allow 15,000 fans into Madison Square Garden for the first round. 

No doubt some of this is because this the first time the Knicks have been in the playoffs since 2013, it is an exciting team and Knicks fans are hardcore but you just have to believe that a part of the off the chart prices is because of the money being pumped into the system by the Federal Reserve and you know a lot of the money is being pumped into Wall Street which is just a short subway ride from the arena.


7 Product Categories Being Slammed by Price Inflation

The cost of grocery items has climbed 2.4% overall in the last year, but the jump in retail meat prices has been much more dramatic. Compared to April 2020, pork prices are up 11%, bacon prices are up 16.3%, and beef prices are up 4.8%. Poultry prices are 11% higher than last year. The price for wings, which hit a record $2.92 per pound is 180% higher than they were in early 2020. 

After hitting historic lows in 2020, the average price of a gallon of gasoline in the U.S. has risen above $3 for the first time since 2014, according to the AAA.

House price bids are coming in above the asking price, sight unseen. The average house is up 33.9% on a year-on-year basis.

The price for lumber has soared by 377% in the last year, adding as much as $36,000 to the price of a newly built home.

 Retail prices for electronics have recently started to climb, too, led by the price of big screen TVs, which are 30% more expensive than they were last year. 

Used cars and truck prices increased by 10% just last month, and are up 21% over the last 12 months.

The price of renting a car was up 16.2% last month.

It is only the beginning folks, there is much more to come, especially if the Federal Reserve continues its mad money printing. 


Friday, May 21, 2021

Bitcoin Falls After China Calls for Crackdown

Bitcoin’s price is down Friday following an intensified call from Chinese authorities to crack down on mining and trading of the cryptocurrency, reports CNBC.

In a statement from Chinese Vice Premier Liu He and the State Council, authorities said tighter regulation is needed to protect the financial system.

The statement, released overnight, said it is necessary to “crack down on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.”

China’s tough talk comes just a day after U.S. officials pledged to get tough on those using bitcoin to conduct “illegal activity broadly including tax evasion.”


The Latest Take On 'Problems with Modern Monetary Theory'

Order from: 

or order at your local bookstore.


U.S. Proposes Global Minimum Corporate Tax Rate

Treasury Secretary Janet Yellen

The Marxist hate of business is flaring. The Empire is upping its push for a minimum global tax on businesses.

Corporations around the world should pay at least a 15% tax on their earnings, the Treasury Department said Thursday as part of its push for a global minimum for businesses.

The final rate could go even higher than that, according to a Treasury release that said the 15% minimum is a “floor and that discussions should continue to be ambitious and push that rate higher.”

"The international tax architecture must be stabilized, that the global playing field must be fair, and that we must create an environment in which countries work together to maintain our tax bases and ensure the global tax system is equitable and equipped to meet the needs of for the 21st century global economy,” the department said in a news release.

Treasury Secretary Janet Yellen has bemoaned low tax jurisdictions which she says are causing a global “race to the bottom” in terms of countries cutting their rates to try to lure foreign companies.


Guess Who Is Getting a Tattoo This Summer?

 Allison Reichel, third-year Economics PhD student at Geroge Mason University tweeted:

She has left some wiggle room by not identifying what index she is using as her measure and what time frame but still a very dangerous bet. 


This is Why We Are Experiencing So Many Bottlenecks in the Economy

The bottom line is that when you shut down economies around the globe for good parts of a year, you are going to get all kinds of distortions. The economy is a finely tuned instrument. Clueless politicians may think it is a simple turn-off/turn-on situation. But it is about major changes in demand and some sectors of the economy where it takes time to adjust to the new supply and demand factors.

Below is a great interview with a supply-chain services expert that will help you understand some of the transportation issues out in the field.