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Tax Cuts Without Reducing Government Outlays Is Not Possible
TAX CUTS WITHOUT REDUCING GOVERNMENT OUTLAYS IS NOT POSSIBLE According to many economic experts and commentators, an effective way to generate economic growth is through the lowering of taxes. The lowering of taxes, it is held, is going to place more money in consumer’s pockets thereby setting in motion an economic growth. This way of […]
Chapter 5: Bubbles and Adam Smith
CHAPTER 5: BUBBLES AND ADAM SMITH. This chapter explores how laws enabling debt to be bought and sold transformed Britain. Suddenly, vast quantities of money and value were being created out of nothing. The effect was dramatic and widely commented on. Some people thoroughly approved, while others saw a new kind of tyranny taking over […]
Central Bank Balance Sheet Reductions–Will Anyone Follow the Fed?
CENTRAL BANK BALANCE SHEET REDUCTIONS – WILL ANYONE FOLLOW THE FED? The next wave of QE will be different, credit spreads will be controlled The Federal Reserve may continue to tighten but few other CB’s can follow ECB balance sheet reduction might occur if a crisis does not arrive first Interest rates are likely to […]
Who Knows the Right Interest Rate
WHO KNOWS THE RIGHT INTEREST RATE On January 6, we wrote the Surest Way to Overthrow Capitalism. We said: “In a future article, we will expand on why these two statements are true principles: (1) there is no way a central planner could set the right rate, even if he knew and (2) only a free […]
Chapter 3: How Money Works Today: A Summary.
CHAPTER 3: HOW MONEY WORKS TODAY: A SUMMARY. This chapter summarises how money works today. For convenience’s sake, there will be some repetition of material covered elsewhere. Founded on debt rented out at interest, the money system is difficult for most human minds (mine, for instance) to grasp. It is counter-intuitive, so much so that […]
Sustainable Government Debt–An Old Idea Refreshed
SUSTAINABLE GOVERNMENT DEBT – AN OLD IDEA REFRESHED New research from the Peterson Institute suggests bond yields may fall once more Demographic forces and unfunded state liabilities point to an inevitable reckoning The next financial crisis may be assuaged with a mix of fiscal expansion plus QQE Pension fund return expectations for bonds and […]
Why Monetary Easing Will Fail
WHY MONETARY EASING WILL FAIL The major economies have slowed suddenly in the last two or three months, prompting a change of tack in the monetary policies of central banks. The same old tired, failing inflationist responses are being lined up, despite the evidence that monetary easing has never stopped a credit crisis developing. This […]
The Difference Between Money Supply & Liquidity
THE DIFFERENCE BETWEEN MONEY SUPPLY & LIQUIDITY The US debt ceiling suspension, signed on February 2018, expires in March this year. According to some experts, the US Treasury will have to carry out special measures because of possible delays in raising this ceiling. Treasury would need to draw down its deposits with the Fed and […]
Chapter 4: Early Days
CHAPTER 4: EARLY DAYS. The situation we are in today has evolved over many centuries. Economists had plenty of time and opportunity to comment – and comment they did. Only recently has it become highly controversial to notice that banks create money, let alone to discuss the implications.[1] This makes the comments of earlier economists particularly […]
A World of Debt–Where Are the Risks?
A WORLD OF DEBT – WHERE ARE THE RISKS? Private debt has been the main source of rising debt to GDP ratios since 2008 Advanced economies have led the trend Emerging market debt increases have been dominated by China Credit spreads are a key indicator to watch in 2019 Since the financial crisis of 2008/2009 […]
Chapter 2: Laws That Make Robbery Legal.
CHAPTER 2: LAWS THAT MAKE ROBBERY LEGAL. A law can be anything from an attempt to establish justice on earth to a device for robbery and murder.[1] Nazi race law was an example of the latter. Most people pay lip service to the idea that laws should be just; but in fact, laws are often made […]
The Dangers of Negative Interest Rates and a Cashless Economy
THE DANGERS OF NEGATIVE INTEREST RATES AND A CASHLESS ECONOMY The recent gyrations in the stock market and the uncertainties surrounding American trade policies with China and other parts of the world have raised the question of when the next recession will inevitably follow the current economic recovery from the 2008-9 financial crisis. In the […]
Chapter One: The Money Supply: How It Came to be Created by Banks
CHAPTER ONE: THE MONEY SUPPLY: HOW IT CAME TO BE CREATED BY BANKS. The most important fact in economics today goes unmentioned by most economists and bankers: money is created as debt from banks, and it is cancelled when debts are repaid.[1] I have asked many economists and bankers why this is so seldom mentioned, […]
The Arrival of the Credit Crisis
THE ARRIVAL OF THE CREDIT CRISIS Those of us who closely follow the credit cycle should not be surprised by the current slide in equity markets. It was going to happen anyway. The timing had recently become apparent as well, and in early August I was able to write the following: “The timing for the […]
My Speech in the European Parliament on the Coming Economic Collapse
MY SPEECH IN THE EUROPEAN PARLIAMENT ON THE COMING ECONOMIC COLLAPSE Zero percent interest rates have created the largest bubble in human history, when it bursts it will be worse than 1929.
