Setting interest rates artificially low causes the demand for credit to surge, while the supply of credit falls, resulting in a shortage of real loans. The only sound remedy to this is to let interest rates rise to their market-determined level or face economic disaster.
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RSS feed for this sectionVIDEO: Is the ‘end’ of QE3 a threat to emerging markets?
My interview with Bruce Whitfield and my good friend Chris Becker on the end of QE3, booms and busts, Japan’s money printing binge, and South Africa’s structural decline.
The Capitalism Delusion
Little more than a cursory and objective glimpse into the nature of our economic system for the past number of decades, right up to the 2008 crash, and indeed since 2008, will show that unfettered free market capitalism could not have been responsible for the global financial crisis, because unfettered free market capitalism did not […]
Enabling Economic Freedom in South Africa
Forget the ANC Youth League’s notion of economic freedom and ’empowerment’. Two Americans, a small self-funded staff compliment, and willing local churches are fostering more economic empowerment through this programme than the Youth League will ever achieve in a lifetime of mindless protests and angry complaining.
The humbling effect of a newborn child
Having a child is a humbling experience. She will tire you out, test your resolve, force you to be awake when you would rather sleep, and reorder your once lofty priorities around her and her alone. She will make you feel like a novice again, and when all her needs are met, she’ll come up […]
The myth of ‘regulation’
Unregulated economies are a mess. They’re bound to generate harmful excesses, blow up bubbles, create unpredictable business cycles, and render producers confused and entrepreneurs lacking guidance to make sustainable and successful decisions. Our economies need to be micro-managed, scrutinised and guided by intelligent leaders. Success can only come by astute planning. We simply cannot abide […]
Treat Prices and Profits with Reverence
Fixing any price by legislative decree is similar to pretending that a certain chemical result must remain the same even when the complex chemical process is altered. By contriving the end-result and wishing into existence a pseudo-reality, we restrict society from adapting successfully to an ever-dynamic world, and we unknowingly tamper with infinite complexity, leading […]
The Folly that is Nationalisation
When all is said and done, nationalisation is simply the exchanging of majority shareholding from private investors who invested their own funds, to a public entity called the State who invests other people’s funds (taxes). This shift in shareholding is profound. The problem is not that “government doesn’t know how to run a mine.” Few […]
Trading away our Economic Sanity
Real productivity – the kind that lasts and builds real and sustainable wealth – cannot be legislated or printed into existence.