Thanks to central banks’ easy money policies, historically low interest rates and a desperate search for yield have created new danger zones for investors trying to stay out of trouble. Original Article: “Thanks to Central Banks, the Old Investment Rules Don’t Apply Anymore” Sixty percent equities, 40 percent bonds. What has been considered the golden rule of portfolio theory for decades is of less and less value to investors today. Because central banks have...
Read More »What “Inflation” Really Means
Most commentators label increases in the prices of goods and services over a period of time as inflation. Ludwig von Mises however, held that the popular definition of inflation is erroneous. He wrote in Economic Freedom and Interventionism (p. 99), Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today...
Read More »The Great Reset, Part VI: Plans of a Technocratic Elite
In previous installments, I introduced the Great Reset idea1 and treated it in terms of its economic2 and ideological3 components. In this, the sixth installment, I will discuss what the Great Reset entails in terms of governance and the Fourth Industrial Revolution (4-IR), closing with remarks about the overall Great Reset project and its implications. According to Klaus Schwab, the founder and executive chair of the World Economic Forum (WEF), the 4-IR follows the...
Read More »Marxism versus Libertarianism: Two Types of Internationalism
There are two main philosophical and ideological schools of thought that include the problem of internationalism in their principles. The first is liberal internationalism, which developed within the framework of classical liberalism. The second is orthodox Marxism and its various derivatives that entertain the idea of proletarian internationalism. The concept of internationalism has different origins, meanings, and practical implementations in the two schools of...
Read More »The Federal Reserve’s Assault on Savers Continues
The front-page headline in the Wall Street Journal on October 14 says it all, “Inflation Is Back at Highest in over a Decade.” The Labor Department reported that the Consumer Price Index (CPI) increased 5.4 percent from a year ago. This should not have been a surprise to Federal Reserve chairman Jerome Powell and his fellow board members nor to its hundreds of PhD economists who drill into the economic data to forecast the economy. In 2020, when the US economy...
Read More »“Idle Resources” Are Problems Caused by the Central Bank
It is not possible to replace productive credit by means of the easy monetary policies of the central bank. If this could have been done, then the world would have already ended poverty. Original Article: “‘Idle Resources’ Are Problems Caused by the Central Bank” Resources that are utilized to promote economic prosperity in normal times become underutilized during recessions. Some experts are of the view that what is required are policies which will increase the...
Read More »Bharat Kanodia: How Subjective Value Generates Valuation In Business
All value is subjective. But often, when an exchange is to be made, a numerical value is required. It’s a special kind of economic calculation, what Bharat Kanodia terms “a subjective opinion based on objective facts”. Bharat has built a career on valuations, from 2-founder garage start-ups to the Eiffel Tower. He shares his knowledge, experience, and insights with the Economics For Business podcast. Key Takeaways And Actionable Insights Valuations start with a...
Read More »The Battle over the Free Market
Nicholas Wapshott is a British journalist and biographer with a strong interest in economic theory. He says that the Nobel laureate Edmund Phelps is his mentor. One theme in twentieth-century economics dominates his work: the clash between economists who favor the free market and those who support a “mixed economy,” in which the government plays a large role. Wapshott’s earlier book Keynes Hayek shows the way he works. He uses the personal relations between Keynes...
Read More »Thanks to Central Banks, the Old Investment Rules Don’t Apply Anymore
Sixty percent equities, 40 percent bonds. What has been considered the golden rule of portfolio theory for decades is of less and less value to investors today. Because central banks have backstopped almost every market, essentially mimicking the market maker of last and first resort, returns have been low, correlations have increased, and valuations are deprived of their meaning. To act as the ultimate market maker as such, central banks have been leveraging up...
Read More »Monetary Policy and the Present Trend toward Central Planning
Monetary Policy and the Present Trend toward All-around Planning The people of all countries agree that the present state of monetary affairs is unsatisfactory and that a change is highly desirable. However, ideas about the kind of reform needed and about the goal to be aimed at differ widely. There is some confused talk about stability and about a standard which is neither inflationary nor deflationary. The vagueness of the terms employed obscures the fact that...
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