Have you ever wondered why economic conditions are challenging, despite easy access to credit for cars, homes and shopping? In this edition of the Sound Money Monthly we cover one the most important macroeconomic trends, debt. (16 minute read) TLDR: Economic growth, job quality and social mobility are declining. Yet the policy response is the cause … More SM (ed. 1) Debt constrains our future
Subsequent my March 2020 post “Protect Capital: The Case for Gold” the yellow metal has rallied 20% to all-time highs of $1975/ounce. Record highs incorrectly suggest to some that gold is expensive and that the rally is long in the tooth, but evidence refutes this inclination. Volatility and drawdowns should be expected, but current gold … More Gold thesis intact after ATHs
More credit is not the panacea for debt! That is the message from Garet Garrett’s 1932 book, the Bubble that Broke the World. The overuse of debt was a critical cause of the Great Depression (I detailed the other causes here and here). America was a funder of WW1 before entering the war and extended … More The Bubble that Broke the World
With 200%+ returns per annum since 2010, Bitcoin has generated one of the best investment returns in recent years, perhaps ever! It has also experienced massive volatility and huge drawdowns during the 4 bull and 3 bear markets since its creation in 2009. HODLers who average their purchase prices through time and don’t intend to … More Bitcoin Investment Analysis | Preparing for the coming bull-market
The 1920s-1930s and 1960s-1970s are two periods with remarked monetary disorder, similar to today. After reading Rothbard’s America’s Great Depression, I read French economist Jacques Rueff’s “the monetary sin of the west” to gain a few insights on the 60’s. The world was meant to be on a gold standard during both the 20s and … More The Monetary Sin of the West
An article for Alexander Forbes clients appeared in Money Web and the Citizen this week: https://www.moneyweb.co.za/news/markets/all-cycles-turn-eventually/ COVID-19 is the trigger, not cause, for global recession Volatility and risk repricing after years of complacency Long-term asset class return expectations improve Coast is not clear in short term Value in South African real interest rates Ripe conditions … More All Cycles Turn Eventually
A wonderful exposition of Austrian Economics by Frank Shostak and the dangers of seemingly innocuous mathematical economics in this article: https://mises.org/wire/problem-velocity-money. I’ll re-hash so that I solidify this critical concept in my own head… This is unlikely to be valuable to those who haven’t studied formal economics. Mathematical economists manipulate; (1) Velocity (V) = Value … More Velocity and the Dangers of Mathematical Economics
Although painful, the solution to the 2020 economic recession is simple – uncover our problems, let prices adjust and reallocate capital towards productive usages. The quicker we adjust, the shorter the recession and the sooner we create a sustainable economic foundation for future prosperity. This approach is the polar opposite to the current interventionist and … More Inflationary Intervention Triggers Depression Risks
The 4th Turning by Strauss and Howe is the best book I’ve read in recent time. Using a combination of demographics, economics and sociology, the authors analyse American history through generations. Rather than the orthodox approach, looking at history through the eye of the leaders, they pinpoint the influence of key events on each generation. … More “History never repeats but it rhymes” – 4th Turning Crisis Preparation
Covid19 is a trigger that will push a fragile global economy into recession, not the cause. The pending economic conditions are the consequence of poor economic policy and an inability to take difficult decisions, not the virus. Policymakers have favoured short-term patch-work solutions over long-term term sustainable solutions. “Short-termism”, as I like to call it, … More Short-termism is the more dangerous pandemic
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