One of my favorite news sources is the libertarian magazine Reason, of which I was a contributing editor for quite a while. In each monthly issue its editors devote a page to nuggets of wisdom from its 60 years of publication. In the current issue, November, they pulled out a quote from an article I wrote in 1983 about the power of the Federal Reserve System, modestly titled The Monster That Ate America.

Wrote I then, “Unlike the old days (before 1963) the production of new money by the Fed no longer works to lower interest rates. After a decade and a half of wild inflation and uncertainty, traders in the financial market now react differently from the classic model. They see the creation of new money not as an increase in supply that eases interest rate pressure but as a forerunner of a new inflationary burst. So they respond to money creation by demanding higher interest rates to protect against the expected inflation.”

I just asked myself, I wonder how I knew that back then. I don’t recall reading that in some thick economic tract. But on reflection, I think I was intuitively right about that, and in any case no one ever disputed it with me in the intervening 55 years. Now I wonder what economic analysis I might have offered back then that was way off the mark. But it’s time to move on