According to a new report released Wednesday by the US Bureau of Labor Statistics, the Consumer Price Index increased in March by 8.6 percent, measured year over year (YOY). This is the largest increase in more than forty years. To find a higher rate of CPI inflation, we have to go back to December 1981, when the year-over-year increase was 9.6 percent. March’s surge in consumer price inflation is also the twelfth month in row during which the increase is well above the Federal Reserve’s arbitrary 2 percent inflation target. March’s CPI inflation rate was up from February’s rate of 7.9...
Central Bank
3/31/22 Doug Bandow on the New ‘New World Order’
Download Episode. Cato Institute Senior Fellow and Antiwar.com columnist Doug Bandow joins Scott to discuss his recent trip to Qatar. Bandow attended the annual Doha Forum and observed a shift in tone away from “Pax Americana.” Scott and Bandow talk about how the severe U.S. sanctions on Russia’s central bank are accelerating the fall of the dollar as governments around the world realize the financial leverage the status quo gives the U.S. government. Discussed on the show: Doha Forum Doug Bandow is a senior fellow at the Cato Institute and a regular contributor at Forbes Magazine, the...
News Roundup 3/31/2022
US News The Oregon National Guard engaged in war games with the Bangladesh armed forces. [Link] Venezuela is buying and leasing oil tankers in anticipation of the US lifting sanctions. [Link] Russia A top Pentagon official says the US is working on a plan to send S-300 parts and missiles to Ukraine. [Link] Biden announces $500 million in direct budgetary aid to Ukraine. [Link] Biden will invoke the Defense Production Act to increase the output of electric vehicle batteries. [Link] Senator Rand Paul cuts a deal with the body to allow quicker passage of a bill that will end the normal...
Biden Admits His Own Sanctions on Russia Won’t Work
President Biden on Thursday made two big admissions about the US-led economic sanctions on Russia. The first is that the sanctions will lead to food shortages for many countries other than Russia, and that this is simply the price that Americans ought to be forced to pay. The second admission was that sanctions haven't worked to change Moscow's policies, and that "sanctions never deter" the targeted regime from carrying out aggression. So, Biden has helpfully now explained this week not only that sanctions haven't actually deterred Moscow, but that the people of the United States ought to...
Biden Breaks Off Talks with Afghan Government Despite Raging Hunger Crisis
The White House has canceled meetings with the Taliban over its refusal to allow young girls to attend high school, scrapping talks intended to address Afghanistan’s crumbling economy and a looming humanitarian catastrophe.
US & Allies Sanction Russia’s Gold Reserves
The United States and a long list of allied nations will sanction gold transactions from Russia’s central bank, part of a raft of punitive measures imposed following Moscow’s attack on Ukraine. The bank is believed to keep up to $140 billion in the precious metal, or around 20% of its total holdings. President Joe Biden announced the new penalties on Thursday during the first leg of a major trip to Europe, after meeting with allies in the Group of Seven (G7) and European Union. The US Treasury Department later elaborated on the decision, noting it would target gold transactions which...
Sanctions Don’t Hurt Only Russia
The escalation of tension in Ukraine has reminded us of something many investors seemed to have forgotten: geopolitical risk. Sanctions and the inevitable drop in trade have proven to generate a significant negative impact on the different economies involved. We know from the 2014 Ukraine crisis that the economic hit is severe and persistent. The economic hit of sanctions is undoubtedly highest for Russia. The International Monetary Fund (IMF) estimated in 2015 that “Western sanctions and Russian countersanctions reduced Russian real gross domestic product (GDP) initially by 1–1.5% and...
Inflation: An Ontological Reality of Modern Economic Life
The United States of America and economies around the world are suffering from levels of inflation unprecedented in the twenty-first century. While the origins of COVID-19 are debatable, the causes of inflation are not. They lie in undisputed human actions; actions not of everyday economic participants but actions of special institutions which exert their control over economic affairs in our everyday life, stifling the freedom and lives of millions of constituents. It is the wolf which we have brought willingly into our homes, becoming sacrificial lambs in the process. In the spirit of...
Our Monetary System Is Between a Rock and a Hard Place
Last November, the Federal Reserve System announced tapering (a gradual reduction of the central bank’s monthly asset purchases to the point of ending the asset purchase program, which means that the Fed would stop increasing its balance sheet). In December, it announced another decrease in monthly asset purchases. And in the last Federal Open Market Committee meeting, held on December 14–15 and published in January, the committee participants spoke not only of finishing the tapering, but also of a faster rate hiking. In addition, participants spoke of reducing the Fed's balance sheet...
The Dangers of a Jerome Powell Second Term
The U.S. Senate will soon vote on Federal Reserve Chairman Jerome Powell’s nomination to a second term. One of the senators opposing Powell is Elizabeth Warren. I don’t often agree with Senator Warren, but I do agree with her assessment that Powell is “dangerous.” However, Warren actually doesn’t understand what makes Powell, or any Fed chairman, intrinsically dangerous to liberty and prosperity. Warren thinks Powell is dangerous because she thinks he will not be supportive enough of imposing her desired new regulations on banks and other financial institutions. Senator Warren, like most...