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Today is the 50th anniversary of the “Nixon shock”, the day President Richard Nixon closed the gold window and ended the post-WWII Bretton Woods currency agreement. That agreement, largely a product of John Maynard Keynes, pegged the dollar to gold and most other currencies to the dollar. It wasn’t a true gold standard as only other countries that were party to the agreement could demand gold in exchange for their dollars, but it was at least a standard of some...

Sometimes, bad luck can strike. But other times, a catastrophe comes from a series of bad decisions, each the reaction to the consequences of the previous one. On August 15, 1971, President Nixon decreed that the US dollar would no longer be redeemable for the gold owed, even to foreign governments. This bad decision is the latter, a desperate attempt to avoid the consequences of previous bad decisions. Tricky Dicky’s Catastrophe Richard “Tricky Dicky” Nixon...

Profit-taking on long dollar positions was seen ahead of the weekend.  The yield on the December 2022 Eurodollar futures slipped to finish unchanged on the week that saw CPI and PPI reports. The preliminary University of Michigan's consumer confidence measure tumbled to its lowest level since 2011 as the delta variant flares, leading to new social restrictions and delays in the return to work in the US for many. The market appears to have fully discounted a Fed hike...

For some unknown reason, there seems to be some secrecy on the part of the National Archives and Records Administration (NARA) over the still-secret 58-year-old records of the CIA and other federal agencies relating to the Kennedy assassination. On July 29, 2021, I submitted the following request for information through the NARA website: Would you please advise me whether any federal agencies, especially the CIA, have expressed an interest in seeking an extension...

I moved aside and watched our twelve-year-old van pull into the driveway. My wife opened the door, smiled, and told me she got the job. Putting the basketball down, I hugged her and told her I was proud. The job was a part-time evening and weekend position at the local country health food store, a good fit considering my wife’s interests. But deep down, a sense of sadness and partial defeat rolled over me. The ten-year period leading up to this moment had found my...

Abstract: The new “secular stagnation hypothesis” developed by Lawrence H. Summers attempts to justify why the demand stimulus applied in the aftermath of the global financial crisis failed to revive growth in a satisfactory manner. Building on previous ideas of Keynes, Hansen, and Bernanke, Summers claims that excess savings together with feeble investment drove the natural rate of interest down to zero and advanced economies into stagnation. As the US monetary...

The following article was written by Keith Weiner, CEO of Monetary Metals, as a counterpoint to this article, POINT: Should the US Return to the Gold Standard? No It was originally published at InsideSources, here: COUNTERPOINT: Is the Gold Standard the Economists’ Punching Bag? In many gyms, there is a punching bag in the corner. When someone feels frustrated or wants to show off, he can hit it. The gold standard is the punching bag in the economists’ gym. In an...

Abstract: China is currently the world’s largest installer of wind power. However, with twice the installed wind capacity compared to the United States in 2015, the Chinese produce less power. The question is: Why is this the case? This article shows that Chinese grid connectivity is low, Chinese firms have few international patents, and that export is low even though production capacity far exceeds domestic production needs. Using the tools of Austrian economics,...

© Marcos del Mazo | Dreamstime.com Swissmedic, Switzerland’s drug approval agency, extended approval of the Moderna Covid-19 vaccine for use on 12 to 17 year olds this week. On 9 August 2021, Swissmedic said that it had carefully examined an application from Moderna Switzerland and had decided to extend the temporary authorisation for the use of its Spikevax vaccine on 12 to 17 year olds. The application, which included data on 3,732 vaccinated children aged between...

Overview: The global capital markets are subdued today as investors wrestle with the rising virus, the shifting stance of several central banks, and a more tense geopolitical backdrop.  Equity markets are struggling today.  Most of the large bourses in the Asia Pacific region, including Japan, China, Hong Kong, and Taiwan, moved lower, and Europe's Dow Jones Stoxx 600 threatens to snap an eight-session advance.  US futures are narrowly mixed.   The US 10-year yield...