What does 2017 have in store? Our attention will be directed toward the Fed and other central banks, as the world’s financial elites try to navigate through increasingly volatile waters. Central bankers don’t have a strong track record for seeing bubbles, but it’s hard for them to ignore growing skepticism from both the public and even their own governments. Blinded by a fundamental misunderstanding of interest rates, they find themselves in a perilous position: either bring about the next bust by unraveling past policy, or risk losing the public’s confidence by failing to raise interest rates. This is why now, more than ever, it’s time to legalize competing currencies and offer the failing central bank model some real competition.
This post was published at Ludwig von Mises Institute on January 7, 2017.