Category Archive: 6b) Austrian Economics

Eugen von Böhm Bawerk
“Value does not come out of the workshop, but out of the wants that goods satisfy” The quote by Mr Eugen von Böhm-Bawerk is as true today as it was more than 100 years ago, even though modern pundits often ignore the simple fact. This blog is not an attempt to revive Mr Böhm-Bawerks thoughts, life and deeds, but from a sober view of the world comment on and analyze ongoing events. We aim to take the analysis a step further. We question accepted truths and always strive to answer the simple question “why?” We are opinionated.

A Take On How Negative Interest Rates Hurt Banks That You Will Not See Anywhere Else

The Bank of Japan and the ECB are assisting me in teaching the world's savers, banking clients and corporations about the benefits of blockchain-based finance for the masses. How? Today, the Wall Street Journal published "Negative Rates: How One Swis...

Read More »

China – A Reversal of Urbanization?

  Economic and Demographic Changes We have discussed China’s debt and malinvestment problems in these pages extensively in the past (most recently we have looked at various efforts to keep the yuan propped up). In a way, China is like the proverbial ...

Read More »

Argentina – The Times, They Are A-Changing

  Our Argentine “Ranch Rebellion” Is Over… for Now… BUENOS AIRES, Argentina – Not much action on Wall Street yesterday. The Dow sold off slightly. Gold and oil were up a bit. How about here in Argentina? “Everything has changed. Everything.”   Mauric...

Read More »

State of Fear – Corruption in High Places

  Mr. X and his Mysterious Benefactors As the Australian Broadcasting Corporation (ABC) reports, a money-laundering alarm was triggered at AmBank in Malaysia, a bank part-owned by one of Australia’s “big four” banks, ANZ. What had triggered the alarm...

Read More »

In Memoriam: Dr. Tibor Machan

  A Rara Avis – The World Is Poorer Without Him In It Our friend Dr. Tibor Machan, a greatly valued contributor to this site, has passed away on March 24.   Dr. Tibor Machan, libertarian philosopher   Unfortunately, we haven’t known Tibor for very lo...

Read More »

ZIRP, NIRP, QE, Bank Collapse and Helicopters Coming Too Late – The Lehman Effect Hits Europe – Hard!

It's official, I'm calling a banking crisis in Europe. Things didn't go well the last time I did this. Of course, many will say, "But the rating agencies have learned their collective lessons. They would most assuredely warn us if the European banks...

Read More »

A Fatal Flaw in the System

  The Hard Rocks of Real Life BALTIMORE – The Dow dropped 174 points on Thursday, the biggest fall in six weeks. Not the end of the world. Maybe not even the end of this year’s bounce-back bull run. As you’ll recall, stocks sold off at the beginning ...

Read More »

Frisky Yen Upsets Japan’s GOSPLAN

  It Wasn’t Supposed to Do That… When you’re a central banker in a pure fiat money system and even your ability to print your own currency into oblivion is questioned by the markets, you really have a problem. This is actually funny on quite a number...

Read More »

Going Into Debt to Invest Into Debt…

  Bankers Hate It When You Hold Cash In an extraordinary turn of events, last week we were contacted by our local bankers. Since we were turned down for a mortgage in 1982 (our business finances were thought to be “too shaky”), we have had little tru...

Read More »

Rotten to the Core

  Poison Money BALTIMORE – We live in a world of sin and sorrow, infected by a fraudulent democracy, Facebook, and a corrupt money system. Wheezing, weak, and weary from the exertion of trying to appear “normal,” the economy staggers on.   Staggering...

Read More »

A Tribute to the Jackass Money System

  A Witless Tool of the Deep State? Finance or politics? We don’t know which is jollier. The Republican presidential primary and Fed monetary policies seem to compete for headlines. Which can be most absurd? Which can be most outrageous? Which can ge...

Read More »

The Other Problem with Debt No One is Talking About

  Faux Growth Recovery Nearly 7 years have elapsed since the official end of the Great Recession.  By now it’s painfully obvious the rising tide of economic recovery has failed to lift all boats.  In fact, many boats bottomed out on the rocks in earl...

Read More »

Federal Devolution

  Leaning Into the Wind BALTIMORE – During our lifetime, three Fed chiefs have faced a similar challenge. Each occupied the chairman’s seat at a time when “normalization” of interest rates was in order.   Recently, we remembered William McChesney Mar...

Read More »

The Path to the Final Crisis and Negative Rates

  Reader Questions on Negative Interest Rates Our reader L from Mumbai has mailed us a number of questions about the negative interest rate regime and its possible consequences. Since these questions are probably of general interest, we have decided ...

Read More »

Are We Becoming a Nation of Silver-Haired Crooks?

  A Salutary Effect BALTIMORE – “Ike and Dick Sure to Click” was an exciting election slogan. Their Democratic opponents, Adlai Stevenson and Estes Kefauver, had their snazzy campaign jingle, too: “Adlai and Estes… They’re the Bestes.” Surely, the me...

Read More »

The Pitfalls of Currency Manipulation – A History of Interventionist Failure

  The G-20 and Policy Coordination Readers may recall that the last G20 pow-wow (see “The Gasbag Gabfest” for details) featured an uncharacteristic lack of grandiose announcements, a fact we welcomed with great relief. The previously announced “900 p...

Read More »

OPEC’s Doha Dilemma: 3mb/d US lock in?

Bawerk shows that more than 3 mb/d of American oil production was helped by US$55.5bn in credit facilities, by excessive debt. This production is now at risk and the debt may not be repaid. The big OPEC players are playing against US shale oil and some smaller OPEC members that have higher costs.

Read More »

Latin America – Seven Ugly Sisters in Deep Political Trouble

Get beyond endless Latin American headlines burning column inches and you come to far broader strategic conclusion: The seven ‘ugly Latino sisters’, namely Brazil, Venezuela, Ecuador, Bolivia, Colombia, Mexico and Argentina are all deep political trouble from collapsed benchmark prices.

Read More »

Is that Buzzing Sound Helicopter Money?

Helicopter money is the rage.  Central banks are talking about it.  Economists are debating it.  The media is rife with coverage.     While it sounds important, it is not precisely clear what helicopter money means. It appears to have originated with Milton Friedman.  In 1969, he wrote: "Let us suppose now that one day a helicopter … Continue reading »

Read More »

Greenspan, the Sheepherder

It is common knowledge by now that Federal Reserve Chairman Alan Greenspan oversaw, enabled and approved of, a major transition in the US economy. His infamous “Greenspan-put” in which his actions at the central bank would be driven, if not dictated,...

Read More »