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From the Notebook – Will Germany Finally Start the EU Breakup?
From the Notebook – Will Germany Finally Start the EU Breakup? We’ve all been so focused on the internal divisions in the U.S. and with Davos trying to run the table here that we’ve neglected somewhat old theses about the potential breakup of the European Union. The EU is a mess. Everyone knows this. Its banks are […]
The dollar’s debt trap
The dollar’s debt trap On the fiftieth anniversary of the Nixon Shock, this article explains why fiat currencies have become joined at the hip to financial asset values. And why with increasing inevitability they are about to descend into the next financial crisis together. I start by defining the currencies we use as money and […]
Central Banks Are Now in the Endgame
Central Banks Are Now in the Endgame Central bankers were handed the Midas curse half a century ago. Midas turned everything that he touched into gold– even his own food. Exactly 50 years ago (15 Aug, 1971) central bankers were handed a much worse curse by Nixon. But instead of turning everything into gold, their […]
Debt Ceiling Drama, Yellen Begins “Extraordinary Measures” to Stave Off Default
Debt Ceiling Drama, Yellen Begins “Extraordinary Measures” to Stave Off Default Photo by Senator Mark Warner CC BY 2.0 Two years ago, the debt ceiling was lifted. Lifting the debt ceiling to make room for more government spending has been pretty routine since since 1917. Until now… While it’s quite likely that U.S. debt had already reached […]
Lacy Hunt On Debt and Friedman’s Famous Quote Regarding Inflation and Money
Lacy Hunt On Debt and Friedman’s Famous Quote Regarding Inflation and Money Lacy Hunt takes on the widespread belief that sustained inflation is on the way in his latest quarterly review. Hoisington Quarterly Review and Outlook 2nd Quarter 2021 Here are some snips to the latest at Hoisington Management Quarterly Review (Emphasis Mine). Too Much Debt In highly […]
The Looming Stagflationary Debt Crisis
Olivier Douliery/AFP via Getty Images The Looming Stagflationary Debt Crisis Years of ultra-loose fiscal and monetary policies have put the global economy on track for a slow-motion train wreck in the coming years. When the crash comes, the stagflation of the 1970s will be combined with the spiraling debt crises of the post-2008 era, leaving […]
Translating Yellen-Speak into Golden-Speak
Translating Yellen-Speak into Golden-Speak Given the increasingly politicized interplay (cancer) of central bank policy and so-called free market price discovery, it’s becoming increasingly more important to track the actions of central bankers rather than just traditional market signals alone. Like it or not, the Fed is the market. Toward this end, we’ve had some substantive fun deciphering […]
The G-7’s Reckless Commitment To Mounting Debt
The G-7’s Reckless Commitment To Mounting Debt Historically, meetings of the largest economies in the world have been essential to reach essential agreements that would incentivise prosperity and growth. This was not the case this time. The G7 meeting agreements were light on detailed economic decisions, except on the most damaging of them all. A minimum […]
The Abuse of Public Debt–And How It Sets the Stage For Economic Disaster
THE ABUSE OF PUBLIC DEBT—AND HOW IT SETS THE STAGE FOR ECONOMIC DISASTER The 2020–21 recession has been devastating for the global economy. It has been ninety years since the global economy last suffered through a recession of this magnitude (in the Great Depression). Nonetheless, it seems that the social effects of the current recession […]
It’s time to start thinking about inflation
It’s time to start thinking about inflation In the year 215 AD, the young Roman Emperor Caracalla, then just 27 years of age, decided to ‘fix’ Rome’s perennial inflation problem by minting a brand new coin. Caracalla’s predecessors over the previous several decades had ordered an astonishing debasement of Roman currency; the silver content in […]
What Gives Value to a Currency?
What Gives Value to a Currency? QUESTION: Hello Martin, can you explain to me how a currency would sustain value for international trade if a country, like Canada (where I live), did what you suggested and stopped issuing debt and just printed money to level that was 5% – 10% of national GDP? would it depend […]
US Dollar’s Status as Dominant “Global Reserve Currency” Drops to 25-Year Low
US Dollar’s Status as Dominant “Global Reserve Currency” Drops to 25-Year Low Central banks getting nervous about the Fed’s drunken Money Printing and the US Government’s gigantic debt? But still leery of the Chinese renminbi. The global share of US-dollar-denominated exchange reserves dropped to 59.0% in the fourth quarter, according to the IMF’s COFER data […]
Do You Believe in Magic?
Do You Believe in Magic? The people pretending to run the world’s financial affairs do. The more layers of abstract game-playing they add to the existing armatures of unreality they’ve already constructed, the more certain it becomes that they will blow up all the support systems of a sunsetting hyper-tech economy that now has no […]
Japan’s Economy Is Again Struggling
Japan’s Economy Is Again Struggling Japan. the world’s third-largest economy is highly dependent on exports and the reality it is still struggling even after a great deal of America’s stimulus money leaked into buying imported goods speaks volumes. While it feels a bit like ancient history, Japan’s GDP contracted at an annualized rate of 28.8 […]
