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 | Nathan Lewis - New World Economics |
| The View From 2011 |
| Today, we will continue our discussion of the “gold sterilization” of 1937.
June 18, 2017: The “Gold Sterilization” of 1937
June 25, 2017: The “Gold Sterilization” of 1937 #2: Fumbling and Bumbling
We will look at an influential 2011 paper by Douglas Irwin, available here:
http://www.nber.org/papers/w17595.pdf
All in all, I think the paper is pretty good, at least in its basic descriptions. It meanders into the usual channels of pointless Monetarism, with some equally pointless math, but it doesThursday, June 11, 2020 |
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| Nathan Lewis - New World Economics |
| The “Gold Sterilization” of 1937 |
| Today, we will start investigating the U.S. recession of 1937, and along with that, claims that the Federal Reserve caused it by some sort of misbehavior. As is our usual practice, we will begin with just looking at some general information about that time.
Industrial production had a short, sharp shock in 1937.
Here’s what it looked like in terms of nominal GDP:
I am not going to try to disentangle what was going on at that time. There were a lot of things, from the introduction of Social SecThursday, May 21, 2020 |
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 | Michael Pento - Delta Global Advisors |
| Four Percent 10-year Note Yield Will Be a Floor No... |
| The two most important factors in determining the level of sovereign bond yields are the credit and inflation risks extant within a nation. When determining a country’s ability to service its debt investors must analyze not only the absolute debt level, but also the ratios of debt and deficits to GDP. In addition, the current rate of inflation must also be viewed within the context of debt in order to make an accurate assumption as to the level of future inflation.
When analyzing historical measWednesday, February 21, 2018 |
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| Nathan Lewis - New World Economics |
| “Rules-Based” Monetary Proposals Won’t Create S... |
| (This item originally appeared at Forbes.com on February 9, 2018.)
https://www.forbes.com/sites/nathanlewis/2018/02/09/rules-based-monetary-proposals-wont-create-stable-money/#4b822c96128e
I often say that governments should follow the “Magic Formula,” which is: Low Taxes and Stable Money. Good things happen to governments that do this, and bad things happen to those that don’t.
“Stable Money” means: money that is stable in value. The traditional way to accomplish this is to link currencies to gMonday, February 12, 2018 |
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 | Alasdair Macleod - Finance and Eco. |
| When will the next credit crisis occur |
| The timing of any credit crisis is set by the rate at which the credit cycle progresses. People don’t think in terms of the credit cycle, wrongly believing it is a business cycle. The distinction is important, because a business cycle by its name suggests it emanates from business. In other words, the cycle of growth and recessions is due to instability in the private sector and this is generally believed by state planners and central bankers.This is untrue, because cycles of business activity hSunday, February 11, 2018 |
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| Bullion Vault |
| Gold Trading 'Calmer' as China's GDP Accelerates, UK Pound Jumps as Brexit Bill Passed |
| GOLD TRADING in London saw wholesale prices rally from near 1-week lows versus the Dollar on Thursday as the US currency fell again after new data said growth in China's economy accelerated last year for the first time since 2010.
Gold prices popped $5 higher but failed to hold above $1330 per ounce as global equities extended yesterday's new all-time highs in New York's stock markets.
Beijing'sThursday, January 18, 2018 |
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| Alasdair Macleod - Finance and Eco. |
| 2018 could be the year for gold |
| We approach 2018 having seen the seeds planted in recent years for a monetary revolution. They include the massive world-wide expansion of credit and debt since the last credit crisis, and the advent of potentially disruptive cryptocurrencies. Geopolitical shifts of tectonic scale have occurred, hardly noticed by the ordinary person. That was until now. We are now on board a train which is gathering speed towards its buffers: the end of dollar hegemony and its potential collapse.It might take a Thursday, December 21, 2017 |
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 | Thorsten Polleit |
| Asset Prices Are Prices Too |
| We live in inflationary times. Some people might consider this statement controversial. This is because these days inflation is widely understood as a rise in the consumer price index (CPI) of more than 2 percent per year. However, there are convincing reasons to question this viewpoint. On the one hand, the CPI does not include “assets” such as, for instance, stocks, housing, real estate, etc. As a result, the price developments of these goods are not accounted for by the changes in the CPI.OnWednesday, December 13, 2017 |
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| Nathan Lewis - New World Economics |
| Applied Mainline Economics (2017), by Matthew Mitchell and Peter Boettke |
| Matthew Mitchell and Peter Boettke are academic economists at the Mercatus Center, a think tank associated with George Mason University. I like Mercatus and its work a lot, as it explicitly builds upon and follows the work of people like F.A. Hayek, Adam Smith, and James Buchanan. I don’t follow the academics too closely, but they often have some good insights, so I was looking forward to a book that might summarize some of those insights and let me know where to look for more detail.
The idea bSaturday, December 9, 2017 |
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| Sprott Money |
| The Size Of The Financial Avalanche Coming Grows Larger - Dave Kranzler |
| Inflation vs deflation. The true economic definition of “inflation”
is the rate of increase in the money supply in excess of the rate of
increase in wealth output. Inflation is monetary in nature. Rising
prices are the manifestation of inflation. Someone I follow on Twitter
posted an ingenious example from which to conceptualize the true concept
of inflation using the game of Monopoly:
The players all start out with reasonable
amounts of money to speculate on real estate. As the game proceTuesday, November 14, 2017 |
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 | Steve Saville - Speculative Investor |
| The Quantity versus the Austrian Theory of Money |
| The Quantity Theory of Money (QTM) has been around since the time of Copernicus (the 1500s). In its original and most basic form it held that the general price level would change in direct proportion to the change in the supply of money, but to get around the problem that what was observed didn’t match this theory it was subsequently ‘enhanced’ by adding a fudge factor called “velocity”. From then on, rather than being solely a function of the money supply it was held that the general price leveThursday, November 9, 2017 |
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 | Frank Shostak |
| Can Gradual Interest-Rate Tightening Prevent a Bust |
| Fed policy makers are of the view that if there is the need to tighten the interest rate stance the tightening should be gradual as to not destabilize the economy.The gradual approach gives individuals plenty of time to adjust to the tighter monetary stance. This adjustment in turn will neutralize the possible harmful effect that such a tighter stance may have on the economy.But is it possible by means of a gradual monetary policy to undo the damage inflicted to the economy by previous loose monFriday, November 3, 2017 |
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| Alasdair Macleod - Finance and Eco. |
| America’s stagflation |
| The accumulation of monetary policy errors by the Fed is increasingly certain to culminate in the credit crisis that always marks the end of the credit cycle. Credit crises are the result of globally coordinated monetary policies nowadays, so the timing of the forthcoming crunch is not only dependant on the Fed’s actions, but is equally likely to be triggered from elsewhere. Candidates for triggering a global credit crisis include economic and financial developments in Europe, Japan and China.ThThursday, October 26, 2017 |
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 | Mark O'Byrne - gold.ie |
| Global Outlook – Mad, Mad, Mad, MAD World: News in Charts |
| by
Alarm bells are ringing for economic fundamentalists such as Fathom Consulting.
Asset prices look increasingly out of step with fundamentals, and in some cases they look downright bubbly. And other geopolitical developments are similarly alarming. One might even describe them as…
Mad:
Equity prices in developed economies, and specifically in the US, are more than one standard deviation higher than their long-run average in relation to nominal GDP.
Mad:
The Nasdaq has again played its part, Sunday, October 8, 2017 |
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| Alasdair Macleod - Finance and Eco. |
| The upcoming increase in interest rates |
| Last week, both Janet Yellen of the Fed and Mark Carney of the Bank of England prepared financial markets for interest rate increases. The working assumption should be that this was coordinated, and that both the ECB and the Bank of Japan must be considering similar moves.Central banks coordinate their monetary policies as much as possible, which is why we can take the view we are about to embark on a new policy phase of higher interest rates. The intention of this new phase must be to normaliseFriday, October 6, 2017 |
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| Nathan Lewis - New World Economics |
| The GOP’s Tax Framework Looks Good. Let’s Do It. |
| (This item originally appeared at Forbes.com on October 5, 2017.)
https://www.forbes.com/sites/nathanlewis/2017/10/05/the-gops-tax-framework-looks-good-lets-do-it/#509e95f5784a
The Republican Party has released its framework for tax reform. I like it a lot.
First, let me congratulate all those, within Congress and throughout the policymaking intelligentsia, who kept their eye on what really matters:
It’s the economy, stupid. A healthy economy helps solve every other problem. It reduces the deThursday, October 5, 2017 |
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| Nathan Lewis - New World Economics |
| Britain’s Path To A 19 Corporate Tax Rate |
| (This item originally appeared at Forbes.com on September 26, 2017.)
https://www.forbes.com/sites/nathanlewis/2017/09/26/britains-path-to-a-19-corporate-tax-rate/#2812c344772e
If the U.S. reduced its Federal corporate tax rate to 15%, it would produce a combined effective corporate tax rate of about 19% — the same as Britain today. There are now 15 governments among the OECD with a corporate tax rate of 22% or less. On average, they get more revenue from this (2.26% of GDP) than the U.S. gets tTuesday, September 26, 2017 |
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 | John Butler - Goldmoney |
| The Golden Revolution, Revisited: Chapter 10 |
| This Insight continues the serial publication of the new, Revisited edition of my book, The Golden Revolution (John Wiley and Sons, 2012). (The first instalment can be found here.) The book is being published by Goldmoney and will also appear as a special series of Goldmoney Insights over the coming months. This instalment comprises the fifth chapter of Section II.View the Entire Research Piece as a PDF here.An Unstable Equilibrium“A Nash equilibrium is defined as a strategy combination with theWednesday, September 13, 2017 |
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| Nathan Lewis - New World Economics |
| Alan Reynolds Argues For the Gold Standard, 1982 |
| Here are Allan Meltzer and Alan Reynolds, arguing for Monetarism and the gold standard, in 1982. I think it is an interesting exchange. You could say that things haven’t changed much since then. But, I don’t think that is true. Nobody really takes the Monetarism of that era seriously anymore. The Monetarists themselves had to give up all the fantasies of those days, and are now on what I call third-generation Monetarism, which is Nominal GDP Targeting.
There is a lot of talk about “rules-based” Monday, September 11, 2017 |
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| Nathan Lewis - New World Economics |
| A 15 Corporate Tax Would Have A Lot Of Upside Without Much Risk |
| (This item originally appeared at Forbes.com on September 7, 2017.)
https://www.forbes.com/sites/nathanlewis/2017/09/07/a-15-corporate-tax-would-have-a-lot-of-upside-without-much-risk
I recently argued that a country is far better off with a simple tax system and a low rate, like Hong Kong with its 16.5% corporate tax, than an obscenely complex system with a high rate, such as the U.S. with a 40% corporate tax (including the average of state taxes). Not only does the economy perform better, butSunday, September 10, 2017 |
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