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Tag Archives: central banks
The anatomy of a financial crisis
The anatomy of a financial crisis In this blog, we present the anatomy of a financial crisis. A characteristic feature of a banking crisis is that it tends to follow, more-or-less, the same path regardless of the ‘shock’ or ‘trigger’ that initiates it. The next phase of the crisis is likely to be a global […]
Central Planners At Work
Central Planners At Work Consumption without Production “Every man is a consumer, and ought to be a producer”, observed 19th century philosopher Ralph Waldo Emerson. “He is by constitution expensive, and needs to be rich.” Ralph Waldo Emerson (May 25, 1803 – April 27, 1882), who inter alia opined on consumers and the need to not only consume, but also […]
On Inflation (& How It’s Not What Happens Next)
On Inflation (& How It’s Not What Happens Next) Everyone is convinced the dollar is going to inflate because more dollars are entering the system. But are they really? That is the question that sparked a succinct Twitter thread by Travis K (@ColoradoTravis) explaining why inflation is not what happens next (emphasis ours): Let’s take a […]
Why Martians Are Wrong About Gold
Why Martians Are Wrong About Gold A martian — Warren Buffett once razzed — would marvel that earthlings dig gold from the ground… only to rebury it in vaults. That is, the business is idiotic… pointless… and wasteful. At first blush, our space man is justly puzzled. Why would humans shovel up hunks of metal […]
They’ve Done It Again
They’ve Done It Again The stars are back in their courses. The angels are back in the heavens. And the Perfections are back within sight… For merely 148 trading days after bottoming… the S&P returned to record heights today. The index closed the day at 3,389 — eclipsing its February 19 height of 3,386. Thus […]
Blain’s Morning Porridge – 21st August 2020 – John Law’s MMT revisited
Blain’s Morning Porridge – 21st August 2020 – John Law’s MMT revisited “Earlier today apparently a woman rang the BBC and said she had heard that there was a hurricane on the way. Well if you are watching, don’t worry, there isn’t.” It’s blowing a full hooley out there this morning, which is very bad news […]
As the Bubble Slowly Pops, the Economic Chain Reaction Is Now in Progress
As the Bubble Slowly Pops, the Economic Chain Reaction Is Now in Progress Much has been written about the economic consequences of covid-19, yet, just as in many of the analyses of the Great Depression and the 2008 crisis, the years of accumulating debt preceding the event do not attract the attention they deserve. Covid-19—or […]
An unexpected systemic crisis is for sure
An unexpected systemic crisis is for sure Downturns in bank credit expansion always lead to systemic problems. We are on the edge of such a downturn, which thanks to everyone’s focus on the coronavirus, is unexpected. We can now identify 23 March as the date when markets stopped worrying about deflation and realised that monetary […]
Market Update: Overstimulated!
Market Update: Overstimulated! Today’s twin orgy of monetary & fiscal stimulus makes a market reckoning inevitable The melt-up discussed last week remains in full force, with the S&P 500 hitting a new intraday all-time high on Wednesday. Just to make sure we’re all clear on this: stocks are back to their highest prices BEFORE the coronavirus pandemic […]
Bank Of Ireland Is Now Imposing Negative Rates On Cash Held In Pensions
Bank Of Ireland Is Now Imposing Negative Rates On Cash Held In Pensions If you’re holding your pension with the Bank of Ireland, you are now officially being charged to do so. In a move that we’re sure is going to have absolutely no consequences, the bank is starting to impose negative interest rates on cash held […]
Rabobank: Everyone Thinks They Know What’s Going On When They Actually Don’t
Rabobank: Everyone Thinks They Know What’s Going On When They Actually Don’t Try Not To Be Rash(omon) The 1950 movie ‘Rashomon’ from director Akira Kurosawa a classic which infamously telling the story of a terrible crime from four different points of view. The “Rashomon effect” is a related term describing the notorious unreliability of eyewitnesses, […]
Did the Fed Just Unwittingly Light the Spark Towards 13% Inflation?
Did the Fed Just Unwittingly Light the Spark Towards 13% Inflation? The Fed just announced a major shift in its approach to inflation, and the move is not getting nearly the attention that it deserves. That is, of course, unless you don’t mind inflation moving higher than any other time in recent memory. Writing for […]
Explaining the credit cycle
Explaining the credit cycle This article summarises why the credit cycle leads to alternate booms and slumps. It is only with this in mind that they can be properly understood as current economic conditions evolve. The reader is taken through three monetary models: a fixed money economy, one governed by changes in bank credit, and […]
