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Inflation is a Policy. Gold Does Not Reflect Monetary Destruction, Yet
Inflation is a Policy. Gold Does Not Reflect Monetary Destruction, Yet The money supply is rising again, and persistent inflation is not a surprise. Inflation occurs when the amount of currency increases significantly above private sector demand. For investors, the worst decision in this environment of monetary destruction is to invest in sovereign bonds and […]
Central Banks Are Wrong about Rate Cuts
Central Banks Are Wrong about Rate Cuts When we talk about monetary policy, people do not understand the importance of interest rates reflecting the reality of inflation and risk. Interest rates are the price of risk and manipulating them down leads to bubbles that end in financial crises, while imposing too high rates can penalize the […]
Record Global Debt: A Ticking Time Bomb for the World Economy
Record Global Debt: A Ticking Time Bomb for the World Economy The relentless increase in global debt is an enormous problem for the economy. Public deficits are neither reserves for the private sector nor a tool for growth. Bloated public debt is a burden on the economy, making productivity stall, raising taxes, and crowding out financing […]
The 2030 Agenda: The Totalitarian Trojan Horse
The 2030 Agenda: The Totalitarian Trojan Horse Upon perusing the 17 UN Sustainable Development Goals included in the well-known 2030 Agenda, one may conclude that they are all harmless and entirely reasonable goals. Who could be opposed to reducing poverty and hunger or advancing infrastructure, innovation, and industry? The trick, akin to the tale of […]
Global Rate Hikes Hit the Wall of Debt Maturity
Global Rate Hikes Hit the Wall of Debt Maturity More than ninety central banks worldwide are increasing interest rates. Bloomberg predicts that by mid-2023, the global policy rate, calculated as the average of major central banks’ reference rates weighted by GDP, will reach 5.5%. Next year, the federal funds rate is projected to reach 5.15 percent. Raising […]
Printing and Borrowing Always Ends Badly
Printing and Borrowing Always Ends Badly As more countries copy the Federal Reserve’s monetary policy without the global demand of the US dollar, financing trade and fiscal deficits printing a weakening currency, nations become more dependent on the US dollar. Neither domestic nor international citizens demand local currency, and governments continue to build large fiscal and trade […]
Government “Stimulus” Keeps Having a Diminishing Effect
Government “Stimulus” Keeps Having a Diminishing Effect The United States economy recovered at a 6.5 percent annualized rate in the second quarter of 2021, and gross domestic product (GDP) is now above the prepandemic level. This should be viewed as good news until we put it in the context of the largest fiscal and monetary stimulus in […]
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 […]
Investors Do Not See “Transitory” Inflation
Investors Do Not See “Transitory” Inflation The Federal Reserve and European Central Bank repeat that the recent inflationary spike is “transitory”. The problem is that investors do not buy it. Inflation is always a monetary phenomenon, and this time is not different. What central banks call transitory effects, and the impact of supply chains are not the real drivers […]
Yield Curve Control: Bubbles And Stagnation
Yield Curve Control: Bubbles And Stagnation Central banks do not manage risk, they disguise it. You know you live in a bubble when a small bounce in sovereign bond yields generates an immediate panic reaction from central banks trying to prevent those yields from rising further. It is particularly more evident when the alleged soar […]
This Time Is Not Different. More Debt, Less Growth
This Time Is Not Different. More Debt, Less Growth I remember that in 2009 three messages were constantly repeated: “In this crisis measures are different, because governments are investing in the recovery by increasing public spending,” “the funds from stimulus plans will strengthen the recovery “and “central banks help a stronger recovery by lowering rates […]
Why Are Mainstream Economic Forecasts So Often Wrong?
Why Are Mainstream Economic Forecasts So Often Wrong? Every end of the year, by the end of the year, we receive numerous estimates of global GDP growth and inflation for the following year. Historically, almost in all cases, expectations of inflation and growth are too optimistic in December for the following year. If we look […]
The “Great Reset” and Plans for a Global War on Savings
The “Great Reset” and Plans for a Global War on Savings Global debt is expected to soar to a record $277 trillion by the end of the year, according to the Institute of International Finance. Developed markets’ total debt—government, corporate, and households—jumped to 432 percent of GDP in the third quarter. Emerging market debt-to-GDP hit […]
The “Great Reset” And The Risk Of Greater Interventionism
The “Great Reset” And The Risk Of Greater Interventionism Global debt is expected to soar to a record $277 trillion by the end of the year, according to the Institute of International Finance. Developed markets’ total debt -government, corporate and households- jumped to 432% of GDP in the third quarter. Emerging market debt-to-GDP hit nearly […]
The U.S. Dollar Collapse Is Greatly Exaggerated
The U.S. Dollar Collapse Is Greatly Exaggerated The US Dollar Index has lost 10% from its March highs and many press comments have started to speculate about the likely collapse of the US Dollar as world reserve currency due to this weakness. These wild speculations need to be debunked. The US Dollar year-to-date (August 2020) has strengthened […]
