Conventional economic theory states that during a recession interest rates should be lowered to spur lending. In practice, there is an argument to be made that this actually perpetuates the recession and leads to asset bubbles, debt supercycles and an increase in wealth inequality. 1. Clear bad debts faster giving room for the economy to…Read More
Inflation can mean very different things depending on what monetary system and part of the business cycle an economy is currently in.
The past year has certainly seen more financial institutions adopt Bitcoin as a reserve asset, either for themselves or for their clients. Several news outlets have reported that BNY Mellon will hold, transfer, and issue Bitcoin on behalf of its clients. The use of the word issue raises the question as to whether they will…Read More
While the political left may have been the most critical voice of the wealth inequality, ironically it may have been a combination of the government and Federal reserve under a Democratic presidency that oversaw the creation of the so-called “1%”. Quantitative Easing inflates financial asset prices while causing stagnation and growing debt levels in the…Read More
In a recent talk, Portfolio Manager Steven Van Metre points out that contrary to public opinion, QE doesn’t “flood the system with liquidity”, but actually withdrawals liquidity from the Petro-Euro Dollar system. The irony of this is, that the Federal Reserve themselves published an article in 2014 confirming this to be the case:
It is maybe a sign of the times that Microstrategy is doing the same thing that retail investors do, leveraging up debt to speculate on an investment: We should learn the lessons of history that while beta might increase your gains as well as losses, leverage can loose you more than all your capital, as…Read More
A recent article from the American Institute for Economic Research has been doing the rounds on Twitter for saying that we should no longer be teaching money as a store of value. While practically speaking that may be an accurate description of the current state of affairs, the negative effect of bank credit expansion and…Read More
With their multiple PHDs and complex mathematical models, is no doubt that many of the world’s economists are highly intelligent. But as Zachery Shore makes abundantly clear, smart people can make bad decisions. This is especially true if they have incorrect assumptions or models, to begin with, as most contemporary economists do. The ability to…Read More
This article won’t go into a detail explanation, but if you do the work to think through all the outworkings of a gold standard compared to the current credit standard, you’ll see that the difference between them is quite stark: Gold Standard Savings Rewards Investment Long Term Planning Stable Growth Consistent Prices Values Labour Upward…Read More
Since coming off the Gold standard in 1971, there has been massive credit expansion, as the monetary supply has been untethered from any constrained resources. This has lead to asset price inflation, wealth inequality and a massive debt load that is a massive drag on real economic growth. Covid has pushed forward the calls for…Read More