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.

The Santa Claus Rally is Especially Pronounced in the DAX

Every year a certain stock market phenomenon is said to recur, anticipated with excitement by investors: the Santa Claus rally. It is held that stock prices typically rise quite frequently and particularly strongly just before the turn of the year. I want to show you the Santa Claus rally in the German DAX Index as an example. Price moves are often exaggerated in the German stock market, which leads to quite pronounced – and hence profitable –...

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The Party of Spend More vs. the Party of Tax Less

The Senate just passed a 500-page tax reform bill. Assuming it lives up to its promise, it will cut taxes on corporations and individuals. Predictably, the Left hates it and the Right loves it. I am writing to argue why the Right should hate it (no, not for the reason the Left does, a desire to get the rich).

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The Complete Idiot’s Guide to Being an Idiot

There are many things that could be said about the GOP tax bill. But one thing is certain. It has been a great show. Obviously, the time for real solutions to the debt problem that’s ailing the United States came and went many decades ago. Instead of addressing the Country’s mounting insolvency, lawmakers chose expediency without exception. They kicked the can from yesterday to today.

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Japan: It isn’t What the Media Tell You

For the past few decades, Japan has been known for its stagnant economy, falling stock market, and most importantly its terrible demographics. For almost three decades, Japan’s GDP growth has mostly been less than 2%, has been negative for several of these years, and has often hovered close to zero. The net result is that its GDP is almost at the same level as 25 years ago.

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Lessons from Squanto

Governments across the planet will go to any length to meddle in the lives and private affairs of their citizens. This is what our experiences and observations have shown. What gives? For one, politicians have an aversion to freedom and liberty. They want to control your behavior, choices, and decisions. What’s more, they want to use your money to do so.

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The Precious Metals Bears’ Fear of Fridays

In the last issue of Seasonal Insights I have shown that the gold price behaves quite peculiarly in the course of the trading week. On average, prices rise almost exclusively on Friday. It is as though investors in this market were mired in deep sleep for most of the week.

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How Uncle Sam Inflates Away Your Life

“Inflation is always and everywhere a monetary phenomenon,” economist and Nobel Prize recipient Milton Friedman once remarked. He likely meant that inflation is the more rapid increase in the supply of money relative to the output of goods and services which money is traded for.

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Business Cycles and Inflation, Part II

We recently received the following charts via email with a query whether they should worry stock market investors. They show two short term interest rates, namely the 2-year t-note yield and 3 month t-bill discount rate. Evidently the moves in short term rates over the past ~18 – 24 months were quite large, even if their absolute levels remain historically low.

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Business Cycles and Inflation – Part I

Incrementum Advisory Board Meeting Q4 2017 – Special Guest Ben Hunt, Author and Editor of Epsilon Theory. The quarterly meeting of the Incrementum Fund’s Advisory Board took place on October 10 and we had the great pleasure to be joined by special guest Ben Hunt this time, who is probably known to many of our readers as the main author and editor of Epsilon Theory.

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What President Trump and the West Can Learn from China

Expensive Politics. Instead of a demonstration of its overwhelming military might intended to intimidate tiny North Korea and pressure China to lean on its defiant communist neighbor, President Trump and the West should try to learn a few things from China.

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Heat Death of the Economic Universe

Physicists say that the universe is expanding. However, they hotly debate (OK, pun intended as a foreshadowing device) if the rate of expansion is sufficient to overcome gravity—called escape velocity. It may seem like an arcane topic, but the consequences are dire either way.

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The Downright Sinister Rearrangement of Riches

Simple Classifications. Let’s begin with facts. Cold hard unadorned facts. Water boils at 212 degrees Fahrenheit at standard atmospheric pressure. Squaring the circle using a compass and straightedge is impossible. The sun is a star.

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The Strange Behavior of Gold Investors from Monday to Thursday

Known and Unknown Anomalies. Readers are undoubtedly aware of one or another stock market anomaly, such as e.g. the frequently observed weakness in stock markets in the summer months, which the well-known saying “sell in May and go away” refers to. Apart from such widely known anomalies, there are many others though, which most investors have never heard of.

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Credit Spreads: The Coming Resurrection of Polly

Suspicion isn’t Merely Asleep – It is in a Coma (or Dead). There is an old Monty Python skit about a parrot whose lack of movement and refusal to respond to prodding leads to an intense debate over what state it is in. Is it just sleeping, as the proprietor of the shop that sold it insists? A very tired parrot taking a really deep rest?

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Is a Rapid Advance in the Japanese Stock Market Imminent?

The Japanese stock market is quite unique: it would need to rally by approximately 80% to reach its former historical peak. What’s more, said peak was attained on the final trading day of 1989, more than 25 years ago. In short, Japanese stocks have been anything but a good investment in recent years.

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How to Survive the Winter

One of the fringe benefits of living in a country that’s in dire need of a political, financial, and cultural reset, is the twisted amusement that comes with bearing witness to its unraveling. Day by day we’re greeted with escalating madness. Indeed, the great fiasco must be taken lightly, so as not to be demoralized by its enormity.

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Marc Faber, Freedom of Speech & Capitalism

Political Correctness Hampers Honest Debate. What would the world be like today had Europeans never colonized Americas, Africa, the Middle East, Australia, New Zealand, and South Asia? Most of these societies would still not have discovered the wheel. It takes a huge amount of reality-avoidance and ineptitude for outsiders who travel there not to realize that a billion or more people in the Third World still wouldn’t have discovered the wheel.

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Wie Sozialisten den Kapitalismus prägten – Teil 3

Im zweiten Teil dieser Analyse wurde zu zeigen versucht, weshalb es für das eigentliche Verständnis unseres heutigen Geldsystems und dessen spezifischen Eigenschaften wenig sinnvoll ist, in der Kritik desselbigen zwischen Staat, Zentralbank und Geschäftsbank zu unterscheiden. Alle drei Akteure sind für die in Teil Zwei beschriebene «monetäre Revolution» unabdingbar und haben die von der natürlichen Knappheit losgelöste Kreditgeldschöpfung erst...

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Can Switzerland Save the World?

Switzerland: Far from Flawless, but still a Unique Country – An Interview with Claudio Grass. Our friend Claudio Grass has discussed Switzerland in these pages before, and on one of these occasions we added some background information on country’s truly unique political system (see “The People Against the Establishment” for the details).

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On the Marc Faber Controversy

By this time anyone reading this particular article on Acting Man will know about the controversy surrounding Marc Faber these last days, when a single paragraph of many from his October 2017 newsletter was published out of context.

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