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The Cost of Stagnation: We’re Living in Limbo
The Cost of Stagnation: We’re Living in Limbo This erosion of opportunities to complete life’s stages and core dramas is rarely recognized, much less addressed. The idea that human life subdivides rather naturally into stages is based on our natural progression from childhood into adulthood and eventual (if we’re lucky) old age. Confucian thought views […]
The War On Cash: Why Now?
The War On Cash: Why Now? You’ve probably read that there is a “war on cash” being waged on various fronts around the world. What exactly does a “war on cash” mean? It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. […]
Currency Devaluation: The Crushing Vice of Price
Currency Devaluation: The Crushing Vice of Price Devaluation has a negative consequence few mention: the cost of imports skyrockets. When stagnation grabs exporting nations by the throat, the universal solution offered is devalue your currency to boost exports. As a currency loses purchasing power relative to the currencies of trading partners, exported goods and services become cheaper […]
Does “Creative Destruction” Include the State?
Does “Creative Destruction” Include the State? When do we get to exercise democracy and fire every factotum, apparatchik, toady and lackey in the state who has abused his/her authority? Everyone lauds “creative destruction” when it shreds monopolies and disrupts private enterprise “business as usual.” If thousands lose their middle-class livelihoods– hey, that’s the price of progress. […]
When Authorities “Own” the Market, The System Breaks Down: Here’s Why
When Authorities “Own” the Market, The System Breaks Down: Here’s Why Central planning asset purchases aimed at propping up prices destroy the essential price discovery needed by private investors. Panicked by the possibility of declines that undermine the official narrative that all is well, authorities the world over are purchasing assets like stocks, bonds and […]
Bubble, Bubble, Toil and Trouble: When Authorities Buy Assets to Prop Up Markets
Bubble, Bubble, Toil and Trouble: When Authorities Buy Assets to Prop Up Markets The Central Planners who thought that buying shares to prop up the stock bubble was an excellent fix are about to find out the true meaning of toil and trouble. The actual line from Shakespeare’s Macbeth is double, double, toil and trouble, fire burn, and […]
Will the Oil Patch Bust Trigger Recession?
Will the Oil Patch Bust Trigger Recession? This seemingly inexhaustible credit line is now drying up, with severely negative consequences for oil producers with debt that’s coming due. Could the oil patch bust triggered by oil plummeting from $100/barrel to $50/barrel kick the U.S. into recession? Longtime correspondent B.C. recently observed: The question is whether the incipient […]
We Need a Crash to Sort the Wheat from the Chaff
We Need a Crash to Sort the Wheat from the Chaff Once the phantom collateral vanishes, there’s no foundation to support additional debt and leverage. When a speculator bought a new particle-board-and-paint McMansion in the middle of nowhere in 2007 with nothing down and a $500,000 mortgage, the lender and the buyer both considered the […]
What’s Scarce Geopolitically: Stability, Ways to Get Ahead and Innovation
What’s Scarce Geopolitically: Stability, Ways to Get Ahead and Innovation Conserving what is failing is not a path to stability. What’s in demand but scarce is valuable. This is one of those scale-invariant principles: businesses large and small want what’s scarce and in demand, because that’s what generates profits. What’s abundant but not in demand is […]
Thank Goodness Everything’s Fixed
Thank Goodness Everything’s Fixed The trick is to borrow as much as you can and leverage it to the hilt, and buy, buy, buy. Thank goodness everything’s been fixed. Now that the bigshots in the Eurozone have given Greece the Humphrey Bogart treatment– When you’re slapped, you’ll take it and like it, Bogart’s line as he bullied […]
When Capitalism Turns to Cannibalism
When Capitalism Turns to Cannibalism With authentic growth scarce, there’s no other way to reap huge profits but cannibalism. When people say “capitalism has failed” or “capitalism has succeeded,” we have to ask: what type of capitalism do you mean? Authentic capitalism, in which capital is placed at risk to earn a return in a competitive, […]
Diminishing Returns on Central-Planning Policy Extremes = 2016 Crash
Diminishing Returns on Central-Planning Policy Extremes = 2016 Crash The problem with these policy extremes is that they are so painfully visibly acts of central-planning desperation. It is perhaps fitting that I am posting a call for a financial crisis that fails to respond to the usual central-planning manipulations on Bastille Day. There are two main lessons […]
Is Greece a Template for U.S. State & Local Government Debt Crises?
Is Greece a Template for U.S. State & Local Government Debt Crises? The template of over-indebtedness as a response to soaring obligations is scale-invariant, and it always ends the same way: default. When you can’t pay your bills, you can either cut expenses, borrow money or if you’re extraordinarily privileged, print money. If you borrow money […]
Why Greece Is The Precursor To The Next Global Debt Crisis
Why Greece Is The Precursor To The Next Global Debt Crisis The Eurozone fantasy will be one of the early casualties The one undeniable truth about the debt drama in Greece is that each of the conventional narratives—financial, political and historical—has some claim of legitimacy. For example, spendthrift Greeks shunned fiscal discipline: here’s an account […]
Maintaining the Illusion of Stability Now Requires Ever-Greater Extremes
Maintaining the Illusion of Stability Now Requires Ever-Greater Extremes This much-needed re-set to an economy that serves the many rather than the few is what the Powers That Be are so fearful of. On the surface, everything still looks remarkably stable in the core industrial economies. The stock markets in Japan, Germany and the U.S. are […]
