Category Archives: Uncategorized

Why do the Japanese want growth?

It seems to be a universal truth that growth is good. There almost can be no bad growth. But what exactly is the purpose of growth, and why do we want it? Instead of viewing economic growth as the objective, … Continue reading

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Why do stock markets crash?

With the S&P 500 off 5% from all-time highs, and the 10-day volatility in the 87th percentile, some observers are anticipating a 1987-style market correction. In this piece, we analyze the conditions that presaged prior violent corrections. Starting with what the … Continue reading

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Dear Ms Yellen: Raise the inflation target

Dear Ms Yellen: Congratulations on both your appointment as well as becoming the first woman to head the Federal Reserve. This will potentially make you, at times, the most powerful and important person in the world. We are more alike … Continue reading

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Estimating the impact of monetary policy normalisation on assets

A New Age of Policy Transparency The Federal Reserve, beginning in 2011, began a new era of transparency that began with the publishing of economic and monetary policy projections from Open Market Committee members.  Along with projections for unemployment and GDP, they … Continue reading

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Will this be a lost decade for profits?

On Memorial Day this year, we lost our best friend, Godiva.  This piece is dedicated to the wonderful memories she gave us. It seems absurd to consider that 2013-2023 will be a decade of lost profits when they have grown … Continue reading

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Unemployment in the Age of Capital Abundance

I – The Nominal and the Real In economics, there are two kinds of problems:  real problems and nominal problems. The deforestation on Easter Island destroyed most of the Rapa Nui.  When it was necessary to leave the island and … Continue reading

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The Three Types of Marginal Capital Allocation

As we discovered before, the marginal decision on cashflow re-allocation drives cyclicality. There are principally three types of capital allocation transactions. If you are expanding capital stock, or you are funding the expansion of capital stock, you are investing.  This … Continue reading

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The State of Rentierism

Interest in rentierism has begun to percolate in the last few years.  I propose a framework for analysing and discussing the modern state of rentierism in the terms of behaviours, incentives and empirical impact on the economy. Both the capitalist and … Continue reading

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Welcome to Peak Capitalism

Has the United States of America reached, and perhaps passed, “peak capitalism” – the point where the maximum number of people participate in capitalist relationships? The argument could be made, at least on a relative basis, that it has indeed … Continue reading

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Investment: Lever of the Economy

Investment: Driver of Cyclicality GDP, the measure of the nation’s income, is the sum of 4 components: Y (GDP) = C (Consumption) + I (Investment) + G (Government Spending) + (X [Exports] – M [Imports]) The most volatile component is investment. … Continue reading

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