Managing a Crisis

November 27, 2023

by Alasdair MacLeod Gold Money

This article concludes that the current downturn in bond yields is part of a continuing market manipulation by central banks in order to restore confidence in the global economic outlook.

There is a long history of government intervention in markets. In the nineteenth century, it was by legal regulation, the most notable of which was the 1844 Bank Charter Act, which had to be suspended in 1847, 1857, and 1866.

From the early 1920s, the emphasis on intervention changed under Benjamin Strong, the first Fed Chairman, who started to deliberately expand central bank credit to stimulate the economy. Coupled with the expansion phase of the commercial bank credit cycle, this led to the roaring twenties, the stock market boom, and its collapse.