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Cyprus Forced Into Bailout Deal
Do you think that depositors in Cyprus are being taxed? That their money is being taken from them to go to the government in Cyprus or to Europe? Most analysis of the Cyprus bailout is wrong on this...
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My new site
Posterous was acquired by Twitter a while ago. At first, it seemed like it was an expansion play by Twitter to cover blogging as well. But then they announced that they were shutting down Poster.com...
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Theory of Interest and Prices in Paper Currency Part I (Linearity)
Under gold in a free market, the theory of the formation of the rate of interest is straightforward.[1] The rate varies in the narrow range between the floor at the marginal time preference, and the...
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How Not to Trade the Dollar
I hope this essay provides some food for thought. It is not my intention to insult or belittle anyone, but using humor and cold logic, to help people understand an abstract topic with many...
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Theory of Interest and Prices in Paper Currency Part II (Mechanics)
In Part I, we looked at the concepts of nonlinearity, dynamics, multivariate, state, and contiguity. We showed that whatever the relationship may be between prices and the money supply in irredeemable...
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We Have Gold Coins: Why Don’t They Circulate?
The question asked by the title of this article is not rhetorical. It came up in the debate about Arizona Senate Bill 1439, which recognized gold and silver as legal tender. The bill passed in both the...
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KeithGram: From Bismark to Schaeuble
Wolfgang Schäuble, German finance minister (CDU) on March 9th 2011, during a pre-election party in Bensheim (Hesse). (Photo credit: Wikipedia) By Wolfgang Schaeuble’s own admission (he is finance...
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Theory of Interest and Prices in Paper Currency Part III (Credit)
In Part I, we looked at the concepts of nonlinearity, dynamics, multivariate, state, and contiguity. We showed that whatever the relationship may be between prices and the money supply in irredeemable...
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Theory of Interest and Prices in Paper Currency Part IV (Rising Cycle)
In Part I, we looked at the concepts of nonlinearity, dynamics, multivariate, state, and contiguity. We showed that whatever the relationship may be between prices and the money supply in irredeemable...
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Unemployment and the JOBS Act
Let’s start with an analogy to the federal deficit. Both the political Left and the Right talk about the deficit. There are two basic approaches. One is zero-sum: to increase taxes (favored by the...
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The Significance of Detroit’s Bankruptcy
Detroit has, by some estimates, $18.5B in debt. Its population is just 714,000, which means that the debt load is about $26,000 for every man, woman, and child in the city. Children don’t work and...
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Theory of Interest and Prices in Paper Currency Part V (Falling Cycle)
In Part I, we looked at the concepts of nonlinearity, dynamics, multivariate, state, and contiguity. We showed that whatever the relationship may be between prices and the money supply in irredeemable...
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“Central bankers have given up on fixing global finance”
That is the title of this opinion piece in the FInancial Times. It turns out that in the present regime of “floating” exchange rates, countries have a choice of the tiger, or the tiger. Either they can...
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Rising Interest Rates
Interest rates have risen since May of this year, from under 1.7% to over 2.7%. By any measure, that is an enormous move. I have mostly written about how falling interest rates cause capital...
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Magical Thinking Drags on Economics
Many economists often attempt to set arbitrary thresholds. For example, if debt hits X% of GDP (or whatever measure) then it is “too” large and “impedes economic growth”. This article on Acting Man...
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Oscillation, Feedback, and Resonance
I just saw this fascinating video of a bunch of metronomes that begin ticking out of sync with one another, but slowly line up until they all beat in unison. I really love the title slide where it says...
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Theory of Interest and Prices in Paper Currency Part VI (The End)
In Part I, we looked at the concepts of nonlinearity, dynamics, multivariate, state, and contiguity. We showed that whatever the relationship may be between prices and the money supply in irredeemable...
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The Theory of Interest and Prices in Practice
Medieval thinkers were tempted to believe that if you throw a rock it flies straight until it runs out of force, and then it falls straight down. Economists are tempted to think of prices as a linear...
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