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Here’s Why Modern Unbacked Money Derives Value from Gold
Here’s Why Modern Unbacked Money Derives Value from Gold Photo by Giorgio Trovato This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: The value behind money, why gold’s price has grudgingly responded to recent market turmoil and what higher energy prices mean for gold and […]
TOTAL MARKET INSANITY: Toyota vs. Tesla
TOTAL MARKET INSANITY: Toyota vs. Tesla The present market insanity reminds me of the similar mentality of Americans right before the 1929 stock market crash and the pre-1999 Tech Bubble. However, the big difference today is that technology has destroyed the ability of investors to understand the meaning of VALUE. The notion that technology makes […]
“Money’s Not Worth Anything Anymore” – Ex-Credit Suisse CEO Blasts “Crazy” Negative Rates
“Money’s Not Worth Anything Anymore” – Ex-Credit Suisse CEO Blasts “Crazy” Negative Rates Oswald Gruebel, who served as Credit Suisse CEO from 2004 to 2007 and as UBS Group AG’s top executive from 2009 to 2011, has slammed ECB policy in an interview with Swiss newspaper NZZ am Sonntag. “Negative interest rates are crazy. That means […]
2019: Zombie Markets Before The Fall
2019: Zombie Markets Before The Fall Francis Tattegrain La ramasseuse d’épaves (The Beachcomber) 1880 I haven’t really written about finance since April of this year, and given recent fluctuations in what people persist in calling the markets, maybe it’s time. Then again, nothing has changed since that article in April entitled This Is Not A […]
“But, it’s not backed by anything?”
“But, it’s not backed by anything?” One of the most common arguments against Bitcoin is that it is not backed by anything. That it’s price is just speculation. But what does it mean for an asset or a currency to be backed by something in the first place? To find this out, we first need […]
James Madison’s Essay on Money
JAMES MADISON’S ESSAY ON MONEY The following is by James Madison, the primary author of the US Constitution and fourth president. For those who wish to get a further view on this, here is a paper from the Cleveland Fed on Madison’s essay: https://www.clevelandfed.org/newsroom-and-events/publications/discontinued-publications/economic-review/1998-economic-review/er-1998q1-james-madisons-monetary-economics.aspx Money Observations written posterior to the circular Address of Congress in Sept. […]
Does Subjective Valuation Mean Arbitrary Valuation?
DOES SUBJECTIVE VALUATION MEAN ARBITRARY VALUATION? Why do individuals pay much higher prices for some goods versus other goods? The common reply to this is the law of supply and demand. However, what is behind this law? To provide an answer to this question economists refer to the law of diminishing marginal utility. Mainstream economics […]
Bubble-nomics
Bubble-nomics Question: What is a bubble? Answer: A bubble is trade in an asset at a price range that strongly exceeds the asset’s intrinsic value. Or it could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future. Question: How do you know […]
Ron Paul Says to Watch the Petrodollar
Ron Paul Says to Watch the Petrodollar The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or euros. […]
Discovery
Discovery It looks like 2016 will be the year that humanfolk learn that the stuff they value was not worth as much as they thought it was. It will be a harrowing process because a great many humans are abandoning ownership of things that are rapidly losing value — e.g. stocks on the Shanghai exchange […]
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 […]
Today’s Money Regimes Are Doomed To Failure
Today’s Money Regimes Are Doomed To Failure Centrally issued money centralizes wealth and generates systemic inequality. A Thought Experiment on Money Let’s imagine a small mountain kingdom with only ten very scarce and thus highly valued seashells in circulation. These few shells are certainly valuable in terms of scarcity, but there aren’t enough of them […]
Dollars are worthless without crude oil
Dollars are worthless without crude oil In my previous post I drew some parallels between energy and money – and more specifically, energy and banking – and pointed out that when money is at stake, the presence of energy is likely lurking somewhere in the shadows. It was mostly hypotheses and observations I was throwing around about […]
