Last week’s inflation figures showed that the Fed’s over-expansionary monetary policy wasn’t showing itself in inflation. But that doesn’t mean it’s doing no damage. Instead of in inflation numbers, the multiple years of ultra-low Fed interest rates are manifest in savings figures for both individuals and companies, with individual savings at half the long-term average […]

The Fed last Wednesday did not even remove the “considerable period” from its language about when it might start raising interest rates, thus delaying the likely start of rate rises even further than expected. This repeats its mistake of 2004-06, when it raised the federal funds rate at only ¼% per meeting, undertaking 17 such […]

The bicentenary of the Congress of Vienna, organized to settle the questions outstanding from the 22-year Napoleonic Wars, is a slightly uncertain date. The Congress itself opened officially on October 1, 1814 and the Final Act was signed on June 9, 1815, but on the other hand the British Foreign Secretary Robert, Lord Castlereagh arrived […]

No less than six sovereign borrowers are now paying negative nominal interest rates on their two-year borrowing in euros – in other words they are making money by going into debt. In real terms, medium-term US TIPS and British index linked gilts have had negative interest rates for several years. Contrary to the views of […]

“We wanted flying cars, and they gave us 140 characters” said venture capitalist Peter Thiel in 2011. He put his finger on a central dilemma of the New Economy: its innovations can make money (usually through redirecting advertising sales) but they add little or nothing to the overall stock of human knowledge or long-term happiness. […]

The NASDAQ Composite Stock Index this week broke out to 14-year highs, reaching levels not seen since March 2000, within 10% of its all-time closing peak of 5,048.62 on March 10 of that year (by the end of that month it was already below current levels.) At that time I thought, along with many commentators, […]

Ever since the fall of Communism and the rise of the Internet, future growth has appeared to lie in emerging markets. Modern communications have made it much easier for multinationals to run international supply chains that take advantage of their abundant resources and cheap labor, while emerging markets people have become far more connected to […]

Fifteen years ago, it appeared that globalization was the most important trend of our time, and was irreversible. Since then the Doha round of trade talks has been stalled for years and even the modest progress trumpeted last December has been blocked by India, home of a new government supposedly dedicated to the free market. […]

As an instinctive opponent of Scottish independence but supporter of Britain leaving the EU I have to face an epistemological reality: the two positions are at first sight inconsistent with each other. As a rational man, I find that disquieting, so I thought I’d look at the economic effects of both moves and determine whether, […]

Traditionally, business was the most important political backer of free markets – which made sense, because business needs markets in order to exist at all. However in the last generation, the views of business, as expressed by the U.S. Chamber of Commerce and other outlets, have increasingly diverged from the free market ideal. As crony […]