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Designing a new currency is impractical
Designing a new currency is impractical Rising interest rates threaten to destabilise both financial asset values and the fiat currencies in which they are priced. This outcome is feared by the chattering classes who increasingly speculate about currency resets. So far, we have seen cryptocurrencies such as bitcoin, plans for the introduction of central bank […]
The evolution of credit
The evolution of credit After fifty-one years from the end of the Bretton Woods Agreement, the system of fiat currencies appears to be moving towards a crisis point for the US dollar as the international currency. The battle over global energy, commodity, and grain supplies is the continuation of an intensifying financial war between the […]
The end of fiat hoving into view…
The end of fiat hoving into view… Tragic though the situation in Ukraine has become, the real war which started out as financial in character some time ago has now become both financial and about commodities. Putin made a huge mistake invading Ukraine but the West’s reaction by seeking to isolate Russia and its commodity […]
When normality is exposed as a Ponzi
When normality is exposed as a Ponzi Putin’s hubris, yes-men for generals, lack of fighting conviction among the men, poor logistics and strong Ukrainian leadership and determination have combined to turn the Russian invasion of Ukraine into a military quagmire. Meanwhile, the West has upped the stakes in a financial war. The underlying assumption is […]
Money supply and rising interest rates
Money supply and rising interest rates The establishment, including the state, central banks and most investors are thoroughly Keynesian, the latter category having profited greatly in recent decades from their slavish following of the common meme. That is about to change. The world of continual Keynesian stimulus is coming to its inevitable end with prices […]
Waypoints on the road to currency destruction — and how to avoid it
Waypoints on the road to currency destruction — and how to avoid it The few economists who recognise classical human subjectivity see the dangers of a looming currency collapse. It can easily be avoided by halting currency expansion and cutting government spending so that their budgets balance. No democratic government nor any of its agencies […]
The funny-money game
The funny-money game The sense of general unease that I detect among those I meet and discuss economics and financial matters with is increasing —with good reason. Clearly, what everyone calls inflation, rising prices or more accurately currency debasement, will lead to higher interest rates, threatening markets which are unmistakably in bubble territory. The consequences […]
Hyperinflation is here
Hyperinflation is here Definition: Hyperinflation is the condition whereby monetary authorities accelerate the expansion of the quantity of money to the point where it proves impossible for them to regain control. It ends when the state’s fiat currency is finally worthless. It is an evolving crisis, not just a climactic event. Summary This article defines […]
The emerging evidence of hyperinflation
The emerging evidence of hyperinflation Note: all references to inflation are of the quantity of money and not to the effect on prices unless otherwise indicated. In last week’s article I showed why empirical evidence of fiat money collapses are relevant to monetary conditions today. In this article I explain why the purchasing power of […]
China is killing the dollar
China is killing the dollar In the wake of the Fed’s promise of 23 March to print money without limit in order to rescue the covid-stricken US economy, China changed its policy of importing industrial materials to a more aggressive stance. In examining the rationale behind this move, this article concludes that while there are […]
Inflation, deflation and other fallacies
Inflation, deflation and other fallacies There can be little doubt that macroeconomic policies are failing around the world. The fallacies being exposed are so entrenched that there are bound to be twists and turns yet to come. This article explains the fallacies behind inflation, deflation, economic performance and interest rates. They arise from the modern […]
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 […]
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 […]
