Most of us in the West know, or should know, that all things being equal it is best for the Federal Reserve not to intervene in the economy. We prefer market forces to work. But of course all things are not equal.
By December, the most recent month for which statistics are available, the U.S. dollar Fiat Money Quantity (FMQ) had grown to $12.48 trillion. This is $5.05 trillion more than if it had grown in line with the established average monthly growth rate from 1960 to the month before the Lehman Crisis.
A direct comparison between gold and currencies has two important functions: It allows economists to compare sound money with fiat currency for the purpose of monetary analysis, and it allows us to adjust the price of gold in dollars.
Ford Motor Co. and Chrysler Group LLC overcame a quirk in the industry sales calendar to post surprise U.S. gains for September while future growth may be challenged by the government shutdown that began today.
Last Wednesday the Fed surprised most people by deciding not to taper. What is not generally appreciated is that once a central bank starts to use monetary expansion as a cure-all, it is extremely difficult for it to stop.