Monetary experiments designed and administered by the Federal Reserve unleashed strong irrational forces in not only American but also global asset markets. On November 5, Dr. Brendan Brown presented his book “A Global Monetary Plague: Asset Price Inflation and Federal Reserve Quantitative Easing” (Palgrave Macmillan, 2015), in which he analyzes how quantitative easing caused markets to become infected by asset-price inflation.
Dr. Brown started by distinguishing between asset-price inflation and goods and services deflation and provided a brief overview of what causes asset-price inflation, drawing from economists such as Hayek and Schiller. He pointed out that the Federal Reserve is playing a more active role now than in the past and warned the audience of the dangers of the Federal Reserve’s wild experimentation in monetary policy, in collusion with the Bank of Japan and the European Central Bank. He had two key suggestions for reform: firstly, an inflation target of 2 percent should be abandoned in favor of price stability and secondly, interest rate should be market-determined.
Following Dr. Brown’s speech, AEI’s Desmond Lachman and the Heritage Foundation’s Norbert Michel exchanged their views about the topic.
What is the most financially dangerous institution in the world? Brendan Brown’s new book argues that it is the Federal Reserve. Nothing else can or does create as much financial instability and systemic risk. The Fed’s continuing “Great Monetary Experiment” has resulted in a dangerous global asset price inflation whose ultimate results are unknown by the Fed or anyone else.
Faith in the Federal Reserve is a remarkable modern religious development. Dr. Brown, an expert in monetary history and theory, shows how this faith is and always has been mistaken and recommends fundamental reforms.
Join AEI for Dr. Brown’s presentation of his book, comments by two experts, and an audience Q&A. A wine and cheese reception and book signing will follow.
If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.
Alex J. Pollock, AEI
Brendan Brown, Mitsubishi UFJ Securities International
Desmond Lachman, AEI
Norbert Michel, Heritage Foundation
Wine reception and book signing
Event Contact Information
For more information, please contact Kaavya Ramesh at [email protected], 202.862.7193.
Media Contact Information
For media inquiries, please contact [email protected], 202.862.5829
Event Speaker Biographies
Brendan Brown is the head of economic research at Mitsubishi UFJ Securities International. He advises institutional investment clients in Japan and Europe. Areas of special expertise include the study of global capital flows, European Monetary Union, Japanese monetary situation, international financial stability issues, and capital market pricing. Dr. Brown has an MBA from the University of Chicago and a Ph.D. from the London School of Economics. He is a regular contributor to financial TV, including Bloomberg and CNBC. He was voted Best Forecasting Economist for Japan in 2011 by Bloomberg Magazine.
Desmond Lachman joined AEI after serving as a managing director and chief emerging market economic strategist at Salomon Smith Barney. He previously served as deputy director in the International Monetary Fund’s (IMF) Policy Development and Review Department and was active in staff formulation of IMF policies. He has written extensively on the global economic crisis, US housing market bust, US dollar, and strains in the euro area. At AEI, Dr. Lachman is focused on the global macroeconomy, global currency issues, and multilateral lending agencies.
Norbert Michel is the Heritage Foundation’s research fellow in financial regulations, where he studies and writes about financial markets and monetary policy, including the reform of Fannie Mae and Freddie Mac. Working in Heritage’s Roe Institute for Economic Policy Studies, he also focuses on the best way to address difficulties at large financial companies. Before rejoining Heritage in 2013, he was a tenured professor at Nicholls State University’s College of Business Administration, teaching finance, economics, and statistics. His earlier stint at Heritage was as a tax policy analyst in the think tank’s Center for Data Analysis from 2002 to 2005. He previously was with the global energy company Entergy, where he built a logistic regression model to help predict bankruptcies of commercial clients. His work allowed Entergy to better monitor monetary losses caused by customers’ delinquent payments. Dr. Michel holds a Ph.D. in financial economics from the University of New Orleans. He received his bachelor of business administration degree in finance and economics from Loyola University.
Alex J. Pollock is a resident fellow at the American Enterprise Institute in Washington, DC. Before joining AEI, he was president and chief executive officer of the Federal Home Loan Bank of Chicago from 1991 to 2004. Mr. Pollock focuses on financial policy issues, including financial cycles, government-sponsored enterprises, housing finance, banking, central banking, uncertainty and risk, retirement finance, corporate governance, and political responses to financial crises. He is the author of “Boom and Bust: Financial Cycles and Human Prosperity” (AEI Press, 2010), as well as numerous articles and congressional testimony. Mr. Pollock is a director of CME Group, Great Lakes Higher Education Corporation, and the Great Books Foundation, where he was chairman of the board from 2006 to 2014, and he is a past president of the International Union for Housing Finance.