Tag Archive: Keynes

“Keynes is the winner of the day, not Milton Friedman”

2022-11-10

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2022-11-10

To many of us, no matter how well versed in history, in political affairs or in socioeconomic issues, the present conditions in the West, and especially in Europe, can sometimes seem like the plot of a bad movie. It is often said that history doesn’t repeat itself, but it does rhyme, and what we’re seeing today is a great example of that.

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One of These Silver Days is Not Like the Other, 23 July

2020-07-24

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2020-07-24

Silver price vs Silver basis
Yesterday, the price of silver spiked about 10%. We wrote that it was driven by: “…buying of physical metal.” And we added: “This is a pretty good signal that a bull market may be returning to silver. Let’s watch the basis and price action closely and see how it develops, before we join the pack…”

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You Will Never Bring It Back Up If You Have No Idea Why It Falls Down And Stays Down

2019-12-10

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2019-12-10

Friedman's Plucking Model of Trend-cycle Analysis
It wasn’t actually Keynes who coined the term “pump priming”, though he became famous largely for advocating for it. Instead, it was Herbert Hoover, of all people, who began using it to describe (or try to) his Reconstruction Finance Corporation. Hardly the do-nothing Roosevelt accused Hoover of being, as President, FDR’s predecessor was the most aggressive in American history to that point, economically speaking.

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The End of an Epoch, Report 8 Dec

2019-12-10

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2019-12-10

“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

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Asset Inflation vs. Consumer Goods Inflation, Report 1 Sep

2019-09-03

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2019-09-03

Gold and Silver Prices
A paradigm is a mental framework. It has a both a positive pressure and a negative filter. It structures one’s thoughts, orients them in a certain direction, and rules out certain ideas. Paradigms can be very useful, for example the scientific method directs one to begin with facts, explain them in a consistent way, and to ignore peyote dreams from the smoke lodge and claims of mental spoon-bending.

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Obvious Capital Consumption, Report 28 Jul

2019-07-30

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2019-07-30

Gold and Silver Price
We have spilled many electrons on the topic of capital consumption. Still, this is a very abstract topic and we think many people still struggle to picture what it means. Thus, the inspiration for this week’s essay. Suppose a young man, Early Enterprise, inherits a car from his grandfather. Early decides to drive for Uber to earn a living. Being enterprising, he is up at dawn and drives all day.

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Monthly Macro Monitor: Well Worried

2019-03-28

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2019-03-28

Yield Curve and Lending Standards 1990-2018
Don’t waste your time worrying about things that are well worried. Well worried. One of the best turns of phrase I’ve ever heard in this business that has more than its fair share of adages and idioms. It is also one of the first – and best – lessons I learned from my original mentor in this business. The things you see in the headlines, the things everyone is already worried about, aren’t usually worth fretting over.

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On Board Keynes Express to Ruin, Report 24 Mar

2019-03-26

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2019-03-26

Gold and Silver Price
Last week, I ranted about the problem with our monetary system and trajectory: falling interest rates is Keynes’ evil genius plan to destroy civilization. This week, I continue the theme—if in a more measured tone—addressing the ideas predominant among the groups who are most likely to fight against Keynes’ destructionism.

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Keynes Was a Vicious Bastard, Report 17 Mar

2019-03-18

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2019-03-18

Gold and Silver Price
My goal is to make you mad. Not at me (though I expect to ruffle a few feathers with this one). At the evil being wrought in the name of fighting inflation and maximizing employment. And at the aggressive indifference to this evil, exhibited by the capitalists, the gold bugs, and the otherwise-free-marketers.

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The Duality of Money, Report 10 Mar

2019-03-11

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2019-03-11

Marginal Productivity of Debt 1952-2018
This is a pair of photographs taken by Keith Weiner, for a high school project. It seemed a fitting picture for the dual nature of money, the dual nature of wood both as logs to be consumed and dimensional lumber to be used to construct buildings.

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Central Planning Is More than Just Friction, Report 17 February

2019-02-19

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2019-02-19

Yield Curve
It is easy to think of government interference into the economy like a kind of friction. If producers and traders were fully free, then they could improve our quality of life—with new technologies, better products, and lower prices—at a rate of X. But the more that the government does, the more it burdens them. So instead of X rate of progress, we get the same end result but 10% slower or 20% slower.

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Surest Way to Overthrow Capitalism, Report 6 Jan 2019

2019-01-07

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2019-01-07

Gold and Silver Price
One of the most important problems in economics is: How do we know if an enterprise is creating or destroying wealth? The line between the two is objective, black and white. It should be clear that if business managers can’t tell the difference between a wealth-creating or wealth-destroying activity, then our whole society will be miserably poor.

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Falling Yields, Rising Asset Prices -Rising Yields,Falling Prices

Our paper currency causes falling productivity, though not in terms of bushels per acre. What falls is productivity per dollar or euro of savings. This is the real meaning of the falling interest rate. When the rate was 10 percent, $1,000 of principal produced $100 of return. When it falls to two percent, then the same capital generates a return of only $20. Now with the Swiss 10-year bond, CHF 1,000 earns only CHF 1.3. Keith Weiner argues that one...

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Did Ben Bernanke Call for Euthanasia of the Rentier or of the Pensioner?

Keynes called for “the euthanasia of the rentier” by government suppression of the interest rate (chapter 24 of General Theory). Bernanke did the same with pensioners, he threw them under a bus with low interest rates; still he “was concerned about those seniors as well.”

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Mainstream Economics, The Short Run

Blanchard Macroeconomics 6th edition


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All roads lead to a euro zone break-up

2012-08-10

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2012-08-10

2 solutions for euro zone will work acceptable for Germany
For us all roads lead to a euro zone break-up and multiple sovereign defaults.   Our reasoning can be summarized as follows: Equities are worthless when associated debt becomes encumbered (risk capital takes the  first loss). Equity is not an asset; it is merely the remainder that is left over once debt is subtracted from …

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Global PMIs Contracting More – Are Stocks Overvalued?

2012-08-07

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2012-08-07

Global PMIs July 2012
updated August 05,2012 We publish a detailed analysis of global PMIs and compare them with the main risk indicators S&P500, Copper, Brent and AUD/USD some days after most PMIs came out. Abstract: Thanks to positive US consumer confidence, stock markets are highly valued, whereas the Purchasing Manager Indices (PMIs) for the manufacturing industry are contracting …

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The “Sell in May, come back in October” effect and its equivalent for the SNB

2012-06-09

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2012-06-09

Sell in May, Come back in October
  The "Sell in May, come back in October" effect It is the same seasonal anomaly nearly every year: The statistically flawed (see here and here) Non-Farm Payrolls (NFP) report delivers some good winter readings with 200K new jobs, this time additionally fuelled by a weather effect; biased data that let hard-core Keynesian policy makers doubt Okun's law. Consequently the stock markets rally …

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The Chinese Government, a bubble creator or when finally does China consume ?

2012-05-12

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2012-05-12

The years 2009 to 2011 have seen four institutions that created bubbles in commodity, stock and real estate markets. 2008 and 2009 saw the massive Keynesian interventions by the US state and the Chinese government. In 2009 the first Quantitative Easing measures enabled a first flood of hot money into Emerging Markets. Summer 2010 witnessed …

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