Category Archive: Bawerk

Chinese Philosopher Kings, Losing their Yuan FX Religion?

It took a while, but the world are slowly coming to grips with the simple fact that the red-suzerains in Beijing are not the infallible leaders en route to a new superior economic model as they thought they were. All the craze that emanated from the...

How to Invest in the New World Order

In our latest Toward a New World Order, Part III we ended by promising to look closer at investment implications from the political and economic shift we currently find ourselves in; and that story must begin with the dollar.

Toward A New World Order, part III

A new world order is coming of age and the transition is painful to accept for a Western middle class with a deep-seated sense of entitlement. We showed how the West feels threatened globally in Toward a New World Order and followed up explaining how...

Toward a New World Order, Part II

One of the most widespread misconceptions in the realm of politics is the notion of a left-right axis. This has been used over and over to explain political outcomes and paint the various factions as polar opposites. For example, in the US the two main...

Toward a New World Order?

A Brave New World is coming? Perhaps. We had a recent discussion with a group of people in the hopeless business of doing long term forecasting. This made us think about what the world will look like over the next 20 to 40 years. A pretty thankless...

“Subtle forward guidance”: The marriage between best practice central banking and commodity markets

In the years following the 2008 crash and today, the use of forward guidance from central banking policy makers has become increasingly important. What this nonsense ultimately has translated into is a ridiculous track record in posting upbeat...

USD ready for a second leg higher – then what?

One year ago we showed the following chart to explain the relative strong dollar that was on everyone’s mind at the time. With a second leg higher in the US dollar imminent, this particular chart will be more important than ever. Claims to dollars,...

Do our money managers really believe this will end well?

An economic bubble is essentially an economic activity that cannot sustain itself without a continuous influx of new money and credit to bid away real resources from self-funding endeavors. Financial bubbles are obviously closely related as financial...

The Road to Fascism in Just Two Charts

Laws of politics have been turned upside down. The Intellectuals Yet Idiots can make no sense of it. The underdog who ‘tell it how it is’ appeal to people while established reasoning does not.

Labour Productivity, Taxes and Okun’s Law

The great “science” of economics once discovered an empirical relationship between GDP and unemployment that has been dubbed Okun’s Law. It simply states that the unemployment rate rises as GDP contracts, or vice versa, as production shrinks less...

Mission Creep – How the Fed will justify maintaining its excessive balance sheet

FOMC have changed their normalizing strategy several times and we now see the contours of yet another shift. The Federal Reserve was supposed to reduce its elevated balance sheet before moving interest higher as it would be impossible to increase the...

The Dos Santos Succession Saga

Arguably one of the easier calls for us to make after 37 years in power was that President dos Santos would find ways of affording himself another 5 years in. Like any ‘effective’ leader, Mr. Santos made sure the final deal to do just that was stitched...

Norway: Towards Stagflation

We have all heard the incredible stories of housing riches in commodity producing hotspots such as Western Australia and Canada. People have become millionaires simply by leveraging up and holding on to properties. These are the beneficiaries of a...

The FOMC Butterfly that Will Ruin the World

Given the fact that the core CPI is currently over the arbitrarily set 2 per cent target unemployment below what the FOMC regards as full employment and GDP running at a rate far above the Federal Reserve’s own estimates of so-called potential; you...

Money confuses and blurs economic relations

Money, generally accepted medium of exchange, acts as a veil that confuse and blurs economic relations. This is especially true when it comes to intertemporal considerations. Whilst probably the most important institution in a free market, money can be...

South China Sea: Storm in an Indian Ocean Teacup

With global attention focused on BREXIT calamity, potentially more important questions are being overlooked, and especially in the South China Sea where storms are currently brewing between China and a range of littoral states for strategic control of...

China the lender of last resort for many oil producers

Bawerk explains how China will be the lender of last resort of many oil producers. China might let collapse a smaller producer and become much smarter at covering its political bases across producer states to protect longer term sunk costs.

Dumbest monetary experimental end game in history (including Havenstein and Gono’s)

The Greatest Keynesian monetary experiment is not sustainable. It will not continue ad infinitum. Our money masters are just postponing the inevitable bust that will eventually correct these imbalances through worldwide capital re-allocation. Bawerk...

Saudi-Arabia: Peg or Banking Crisis?

During the reign of the mighty petro-dollar standard, it was necessary for major oil exporters to recycle their dollar holdings back into the dollar-based financial system to maintain their self-imposed exchange rate pegs. US government bonds are the...
Page 1123