Video: Google Search: The Reunion (What GDP can't capture)

Hat tip Cafe's Hayek's Russ Roberts; Source Google India

Video: What it means to end Central Bank (Should we end the FED?)

In the following video, GMU Professor Lawrence H. White explains what it means to end the FED. (Certainly not the end of the world)

From Learn Liberty: (hat tip Zero Hedge)

What would it mean to "end the Fed"? Professor Larry White says that in order to know the effects of such a measure, we must first understand the role of "the Fed".

The Federal Reserve is the central bank of the United States and the institution at the center of the nation's monetary and banking systems. It has five main functions, including controlling monetary policy. Could the United States even survive without the Federal Reserve?

In order to answer this question, Professor White examines countries throughout history that did not have an established central bank, including Scotland, Sweden, Switzerland, and Canada. Hong Kong, he points out, still does not have one. So who performs the functions of a central bank in these countries?

Professor White cites private institutions, including clearing house systems, banks, and financial companies, as the main actors in the monetary systems of countries without a central bank. Ultimately, Professor White concludes that the Federal Reserve is not necessary. Evidence shows that nations can survive without a central bank. What the Federal Reserve does well can be done even better by private institutions, and the institution is capable of serious errors.

Video: Free Banking 101

From LearnLiberty.org (hat tip Zero Hedge) 

What would happen if we didn't have a central bank? Prof. Lawrence H. White explains that private banks would be able to circulate money by issuing notes and checks redeemable for coin. Trustworthy banks would make arrangements to accept each other's notes and checks. Banks would have better incentives than the federal government to ensure their currency retained its value, because if it didn't, people would bank elsewhere. By contrast, central banks controlled by the government are able to devalue currency as they see fit and can even quit redeeming notes for coins of real value if they want to do so. It sounds like social-science fiction, but there are numerous real-world examples in history of successful free-banking systems. In fact, central banks arose largely because governments wanted an institution willing and able to lend them money with easy terms, not because of any problem with the free-banking system. Free markets offer the most efficient system for allocating goods and services, and money is no exception. As failures among central banking systems mount, it is time to reconsider the alternative of free banking.

Video: Mark Thornton on the Unintended Economic Consequences of NSA Spying

Austrian economist Mark Thornton explains of the unintended consequences from National Security Agency's (NSA) rampant spying 

(Source: The Circle Bastiat/Mises Media)

Video: Humor: If I Don't Post about It Online, Did It Really Happen? (Why People Overshare on Social Media)

This video is a spoof on why people tend to overshare in social media.  

Hat Tip Austrian Economist Bob Murphy, who contributed to the story.

Video: Milton Friedman on Why Inflation is a disease for a society

In the following video from Liberty Pen, the illustrious Nobel Prize economist Milton Friedman explains why inflation is a disease for a society..

(hat tip Cafe Hayek)

Inflation is a tax which is imposed without representation and which nobody has to vote for. And of course, it is a marvelous tax from the point of view of a congressman trying to meet the demands of his constituent for more spending

Video: Halloween Humor Treat: How to Survive the Zombie Apocalypse with Economics

Professor Anthony Davies at the Learn Liberty explains (hat tip Zero Hedge)

Video: The Conversation

From the Foundation for Harmony and Prosperity (hat tip EPJ)

Video: Competition, Beer & Diversity

This cool video relates market competition in the beer industry with biodiversity (hat tip Cafe Hayek)

Cheers!

Video: Peter Schiff on The Myth Surrounding Janet Yellen's Forecasting Record

Mainstream media glorifies incoming Fed Chairwoman Janet Yellen's forecasting track record for supposedly having warned against the 2008 crisis. 

Using Ms. Yellen's speeches and public pronouncements as basis, financial analyst Peter Schiff, in the following video, debunks such claims as inaccurate and an exaggeration.

This is important because the consensus seems to have massively build their hopes and optimism around Ms. Yellen's leadership. In reality, what the mainstream  has been cheering about has been the prospects of bigger inflationist policies, which signify as subsidies to Wall Street and politicians at the expense of main street. This also means that the mainstream expects Ms. Yellen to accommodate bigger and bigger systemic debt.

Worst, should Ms. Yellen's administration oblige to Wall Street's desires, then we should expect a bubble bust under her watch. 

Again as pointed out in the past, outgoing Fed chief Ben Bernanke must have been cunning enough to have bailed out and passed the burden of bubbles to his successor.

(hat tip Zero Hedge)

Video: Milton Friedman on Inequality and Minimum Wage

One aspect where the late illustrious economist Milton Friedman impresses me much has been with his lucid and eloquent defense of many aspects of the free markets in public. 

The video video on inequality and minimum wage is a good example. (hat tip Cafe Hayek)

But the Austrian economic school has had many issues with Mr. Friedman (income tax, monetarism, school vouchers, anti-trust laws, flexible exchange rates, opposition to gold standard and etc...) see F.A. Hayek here, Murray Rothbard here, Walter Block here debating Friedman, Roger Garrison here, and David Stockman who accuses Mr. Friedman of opening the door to monetary central planning. 

Although Mr. Friedman in the later phase of his life seem to have changed his mind on his monetarism to eventually call for the abolition of the US Federal Reserve here and here in public.

Video: Peter Klein on Goverment Shutdown, Spending Cuts and other Media Spins

Mises Institute's Peter Klein smokes out Media's spin (propaganda-Orwellian doublespeak) on the Shutdown, Spending cuts and etc...

Video: Who are the real victims of the War on Drugs?

One major opportunity cost from the war on drugs, as explained by Professor of Criminal Law Alex Kreit, is the justice system.

From LearnLiberty.org (hat tip Cafe Hayek)

Fewer than half of all violent crimes were resolved in 2011, but over 7 million people are serving time in U.S. prisons. The majority of prisoners were arrested on drug charges, and 81 percent of those are in prison for simple possession. While the United States spends billions of dollars and millions of man hours fighting a war on drugs, 59 percent of rapists and 36.2 percent of murderers are never brought to justice. What do we get for that time and money? It has never been easier to buy drugs. The war on drugs isn't working, and victims and survivors of violent crimes deserve more thorough investigations. Whatever your stance on drug policy, Prof. Alex Kreit says, shouldn't we allocate resources to provide for investigations for all violent crimes? Shouldn't victims come first? Who are the real victims of the war on drugs? What do you think should be done about it?

Video: Dot.com boom’s “New Economy” that never was

Reminiscent of American economist Irving Fisher’s infamous call, who thought that stock market boom during the “roaring twenties” hit a “permanently high plateau”, this 1999 CNN video during the glory days of the dot.com boom exhibits the same “this time is different” mania outlook we seem to be witnessing today.

As the Zero Hedge points out: (bold original)

In an effort to bring back some of that "memory" - and dispel the inevitable recency bias (and cognitive dissonance) as even the Fed is admitting markets are frothy, we bring you 1999's CNN Special "The New Economy - Boom Without End."

A brief clip from the archives full of internet dreams, globalization hopes, growth without inflation, and most importantly productivity gains. It seems we weren't that far off 14 years ago as Ed Yardeni notes, the internet is an inherently price-deflating animal (in its global competition exposing ways) which means - for firms to maintain profits (and stock prices), they must increase productivity... or in the modern parlance cut costs and lay off workers. "The economy has changed for good..." sums up the 'it's different this time' view of the 90s bubble.

Stephen Roach notes at the time - "if we are not in a new economy and the 'old rules' come into play from time to time, then much of what has happened in the 1990s will ultimately be challenged." Indeed Stephen...

___

Fait accompli

This is how Wikipedia describes the dot.com’s transition towards the bubble bust: (bold mine)

Over 1999 and early 2000, the U.S. Federal Reserve increased interest rates six times, and the economy began to lose speed. The dot-com bubble burst, numerically, on March 10, 2000, when the technology heavy NASDAQ Composite index, peaked at 5,048.62 (intra-day peak 5,408.60), more than double its value just a year before. The NASDAQ fell slightly after that, but this was attributed to correction by most market analysts; the actual reversal and subsequent bear market may have been triggered by the adverse findings of fact in the United States v. Microsoft case which was being heard in federal court. The conclusions of law, which declared Microsoft a monopoly, were widely expected in the weeks before their release on April 3. The following day, April 4, the NASDAQ fell from 4,283 points to 3,649 and rebounded back to 4,223, forming an intraday chart that looked like a stretched V. At the time, this represented the most volatile day in the history of the NASDAQ.

On March 20, 2000, after the NASDAQ had lost more than 10% from its peak, financial magazine Barron's shocked the market with its cover story "Burning Up". Sean Parker stated: "During the next 12 months, scores of highflying Internet upstarts will have used up all their cash. If they can't scare up any more, they may be in for a savage shakeout. An exclusive survey of the likely losers". The article pointed out that "America's 371 publicly traded Internet companies have grown to the point that they are collectively valued at $1.3 trillion, which amounts to about 8% of the entire U.S. stock market".

By 2001 the bubble was deflating at full speed. A majority of the dot-coms ceased trading after burning through their venture capital, many having never made a profit. Investors often referred to these failed dot-coms as "dot-bombs"

Again monetary tightening emerged to expose on the delusions of "this time is different" brought about by a antecedent inflationary boom.

And as the chart above shows (bigcharts), the bursting of the dotcom came with a furious denial phase (red ellipse)

The dot.com has been a product of a series of easing monetary policies—the Plaza and Louvre Accord, BoJ easing which spurred the Yen “carry trade”, and the Fed’s lowering of interest rates—all of which piggybacked on the ‘displacement’ brought by the internet revolution, as Mises Wiki describes here.

The mania character of "This time is different" has been etched in the history of crises, Harvard’s Carmen Reinhart and Kenneth Rogoff admonishes:

The essence of the this-time-is-different syndrome is simple. It is rooted in the firmly held belief that financial crisis is something that happens to other people in other countries at other times; crises do not happen here and now to us. We are doing things better, we are smarter, we have learned from past mistakes. The old rules of valuation no longer apply. The current boom, unlike the many previous booms that preceded catastrophic collapses (even in our country), is built on sound fundamentals, structural reforms, technological innovation, and good policy. Or so the story goes…

Inflationary permanent quasi-booms all end up the same way...

Video: Peter Schiff Was Right (Again) - 'Taper' Edition

hat tip EPJ

Video: Mises Institute's Mark Thornton on the US "Government Shutdown"

Mises Institute's Senior Fellow and Professor Mark Thornton clarifies the sensationalism over the alleged "government shutdown" (source Mises Blog)

Video: Murray Rothbard: The Government is not Us

As excerpted from the Murray N. Rothbard's "For A New Liberty The Libertarian Manifesto" p.60-64.

From the Liberty Pen (hat tip Bob Wenzel)

Video: David Stockman: From “Bubble” Ben Bernanke to “Calamity” Janet Yellen

Strident criticism of Janet Yellen, the likely replacement of Fed Chairman Ben Bernanke, by author, former Congressman and Director of the Office of the Management Bureau David Stockman in a Bloomberg interview (zero hedge)

She has no clue how to wean Wall Street from this pathetic addiction to this massive stimulus, easy money that’s been going on for this entire century…

She spent her whole life as a monetary bureaucrat in the Fed system, has no clue what honest capitalism what genuine free markets are about. Believes that the entire system has to be run by a monetary politburo turning over the dials…short-term interest rate, yield curve and the entire financial system.

She is part of the groupthink. She is part of the Keynesian consensus that 12 people running $16 trillion economy. They are delusional. The market is simply trading the word clouds in this daily injections that comes from the out of control central bank

Video: Ron Paul on the Fed's Untaper: Prepare for the destruction of the US dollar and crash of the bond markets

The great Ron Paul interviewed by Fox Business (hat tip Lew Rockwell Blog)

The untaper says Dr. Paul is a "bad sign" and that the "Fed is really worried about the economy", despite the "deception out there that everything is doing good". But "markets like it". 

In view of rising markets, Dr. Paul further asks why does the Fed have "to punish the elderly who save money?"

Asked about what to expect from Bernanke's replacement Janet Yellen, Dr Paul's response "Just prepare for the destruction of the US dollar and crash of the bond market one day" (1:48) 

He says that the "bond bubble is already weakening" and that interest rates will go up, the dollar is going to weaken, prices are going up and standard of living is going down. 

Dr. Paul also says that the "worse political problem" is the growing "discrepancy between the poor and the middle class"

Asked about housing as beneficiary of Fed Policies, Dr. Paul responds, "as long as the interest rates are artificial I think you are going to get malinvestments misdirected investments and people are going to make mistakes and you don’t when they are until the correction has to come"

It's not all bad news though, Dr. Paul is optimistic over the long term: "I think there is a lot to be optimistic about on the long run, but on the short run I think we are gonna have to go through some tough times"

Video: Khan Academy on the Difference between Credit Easing (US) and Quantitative Easing (Japan)

For Bernanke, according to the Khan Academy, the difference between quantitative easing and credit easing is the intent and where you direct the extra money you printed. For Japan, printing money  aimed at getting money in circulation. For Bernanke’s Fed, printing money has been targeted to increase demand for some types of securities where there is a credit logjam (Portfolio Balance channel) 

This is simply the same dog with different collar.