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Tag Archives: currency

Money Buys Some Happiness; Health Buys You More

Can money buy happiness? Two centuries’ worth of books suggest it can Source: The Economist This is a fascinating look at a topic we have discussed many times before: What exactly is happiness, and how does money relate to that? The issue with many attempts to measure happiness or well-being is that too often, they tend to rely on problematic surveys. Asking people questions tells you what they believe to be true — not what is actually true. This is a nuanced but crucial distinction. Enter...

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In The Fed We TRUST – Part 2: What is Money?

Part one of this article can be found HERE. President Trump recently nominated Judy Shelton to fill an open seat on the Federal Reserve Board. She was recently quoted by the Washington Post as follows: “(I) would lower rates as fast, as efficiently, and as expeditiously as possible.” From a political perspective there is no doubting that Shelton is conservative. Janet Yellen, a Ph.D. economist from Brooklyn, New York, appointed by President Barack Obama, was the most liberal Fed...

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Negative Rates Are Destructive But Profitable

“Remember that Time is Money.” Benjamin Franklin, Advice to a Young Tradesman It’s unfortunate that such genius identifications as the above have long been forgotten by the economic community. First penned in 1748, Benjamin Franklin makes the connection between human effort—or rather the application of human effort towards productive work—and the effect/product, i.e. wealth. We measure this increase in prosperity, of course, in terms of money. Thus, “Time is Money” (or rather, time is...

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China’s Next Warning

Chinese monetary authorities announced today what will be for some of its banks a seventh round of “stimulus.” For the largest institutions, it will “only” be their sixth and the first one since January 2019. The PBOC has decided it is time for more RRR cuts. Effective September 16, the ratio all banks are required to hold of reserves will be reduced by 50 bps; applying to certain city banks, the decrease will be 100 bps. It sounds like a flood of stimulus, enabling China’s...

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The Fingerprints of Bumbling (China)

For a cabal of superpatient supergeniuses, the Chinese tend to play with fire quite often. According to many, the Communists have perfected the art of technocracy and are merely waiting out the impetuously free West. The dollar system will destroy itself (there’s the kernel of truth) allowing a perfectly positioned China to swoop in and rescue the global economy with its scientifically specified yuan. Some even have gone so far as to claim the new world order of CNY will surely be...

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Superforecasting A Bear Market

There’s an ongoing debate about whether or not the U.S. is approaching a recession. As an investor, this question is of utmost importance. It is precisely at these times when fortunes can be made and lost. There’s no shortage of pundits with strong opinions in both the affirmative and negative camps armed with plausible narratives and supporting data sets. How to decide which side to take? Applying some proven forecasting methods to historical data can help bring clarity to this question....

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Recovering Perma-Bear At A Crossroad

Hello, my name is Seth and I’m a recovering perma-bear. (Hi Seth.) It’s true that I used to think that doom was inevitably just another quarter or two away. I was hyper-aware of the business cycle and the encroachment of government into the free markets. Thus, I concluded that growth would end soon. From an investment perspective I was simply wrong. It’s only now that I know that I lacked a robust process—a way of making sense of the investment landscape so that I could act profitably; that...

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Investing On Persistent Foundations

The volatility in the investment markets over the past few months has been truly astonishing. Prices are violently fluctuating and the range of traditional volatility indicators like the VIX have exploded. Just look at the daily moves of the popular U.S. stock market indices for example. While it’s generally folly to attribute specific causes to market action (there are simply too many actors with too many motives), I think it’s fair to say that the trade negotiations with China likely played...

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China’s Big Stimulus

Earlier this month, the People’s Bank of China (PBOC) reduced the percentage of liquid reserves some banks are required to hold. Effective May 15, the Chinese central bank estimated that the policy change would release about RMB 280 billion into the system. This RRR discount, however, was only applied to small and medium-sized banks. The reserve rate for large banks has been the same since late January when the PBOC allowed for two reductions (on top of three others before them). Monetary...

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In The Fed We Trust – Part 1

This article is the first part of a two-part article. Due to its length and importance, we split it to help readers’ better digest the information. The purpose of the article is to define money and currency and discuss their differences and risks. It is with this knowledge that we can better appreciate the path that massive deficits and monetary tomfoolery are putting us on and what we can do to protect ourselves.   How often do you think about what the dollar bills in your wallet or the...

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