Bitcoin Volatility is a Feature, Not a Bug.
The Zombie Ship of Theseus: Bitcoin vs Gold
The current fiat monetary system is a zombified version of the original and Bitcoin is no answer to the perversion of a gold sound money system.
Investment vs. Speculation: Where Does Your Profit Come From?
It matters where your profit comes from. Investment is not the same as speculation. Dividends are not the same as capital gains, despite what Central Banks want you to believe.
The Price of Statism: Flattening the Economy Because of The COVID-19 Virus
I fear the kind of government that can shut down public gatherings and centrally plan healthcare and everything else. I fear it much more than a virus.
Wealth Tax Consumes Capital To Appease Envy
Amongst Thomas Piketty, Elizabeth Warren, Bernie Sanders, Jerry Yang, and Jeremy Corbyn a wealth tax is all the rage as a means to rectify “wealth inequality”. But what does it really do?
Directive 10-289: A Chilling Directive
Our modern civilization is on a trajectory that will lead to a very dark place. History provides examples of what can happen. We refer to the period 1929-1945, and course to 476AD. If the monetary system is not changed, 476AD is where we will end. The raison d’etre of...
The Benefits of Issuing Gold Bonds
There are simple and clear fiscal benefits to a government that issues a gold bond.
Look Beyond Supply and Demand to Understand Labor
The marginal utility of human work does not diminish, as the number of workers increases. As the size of a market grows, the value of firms and workers within it rises.
Why Does the Left Support Wall Street?
The rhetoric from the Left is intransigent in its denunciation of wealth. However, Leftists in power behave differently than their rhetoric would lead us to expect. They enact legislation and regulation which actually helps enrich crony businesses, such as big banks. Why?
What Is Money Printing?
There is a populist idea of money printing. The idea is that banks can just print what they want, enriching themselves in a massive fraud. But, does it really work this way? Let’s start with a simple case, which is clearly not money printing. We will build a series of...
Falling Interest Causes Falling Profits
Most people assume that prices move as a result of changes in the money supply. Instead, let’s look at the effect of changes in interest.
Will a GDP Futures Market Be Liquid?
Scott Sumner said he had a “modest” proposal: there should be a highly liquid futures market in Nominal Gross Domestic Product (NGDP). Let’s look at that.
How Do People Destroy Their Capital?
The flip side of falling interest rates is the rising price of bonds. Bonds are in an endless, ferocious bull market. Why do I call it ferocious? Perhaps voracious is a better word, as it is gobbling up capital like the Cookie Monster jamming tollhouses into his maw. There are several mechanisms by which this occurs, let’s look at one here.
What’s Different about Monetary Policy?
Many people agree that it’s important to move to a free market in money (i.e. the gold standard). They also say that it’s just as important to fight bad taxes and regulation. In their view, government interference in the economy is like friction in a car. The more friction you add, the slower the car goes. One source of friction is much the same as any other.
Let me explain why money doesn’t quite work that way, using a few examples.
The Service Economy
Something clicked for me as I stared out my hotel window at a train station and seeing other public mass transportation moving on the street.
The Cotton Candy Market
If you borrow then it’s not income. This is why no one in his right mind borrows to buy consumer goods. Those who try cannot sustain it for long… But what if someone else borrows?
Take the notion of the efficient market. What does that mean? Today, hordes of people are coming out of economics and finance majors believing an absurdity. Yes, I said absurdity. They think that, if the market is efficient, it’s impossible to beat the average...
Move Over Entrepreneurs, Make Way for Speculation!
Central bank apologists assert that zero interest will help the economy. It hasn’t yet, and it never will. However, the main concern by both Fed defenders and foes alike is the worry that prices might rise. Well, prices aren’t rising now. So the former are smug and the latter are frustrated.
They miss the real harm of zero interest.
Who the Heck Consumes His Capital?!
To make people eat their seed corn, we need to add the essential element: a perverse incentive. Let’s look at monetary policy in this light.
The Economy is in Liquidation Mode
Imagine running a rink company at the end of the roller skating craze. You know it is not going to survive for long. How do you operate your business? You milk it. Well, that’s now happening across the entire economy.
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