Dominos: From Financial Crisis to Economic Crisis to Government Crisis
The dominos are falling. It’s the modern version of a 1930’s bank run. Since everything is bigger (the leverage) and faster (the computers) these days, so is the downfall in financial prices and...
View ArticleThe Dumpster for Toxic Euro Sovereign Debt
Some might be wondering why the euro zone rescue focus turned to saving banks as opposed to saving governments. The reasons are illuminating. Consider the following: When a government has a debt...
View ArticleHow Monetization Happens: Being at the Helm When the Ship Goes Down
The consequences of excess debt are now facing the leaders of Europe head on, and a monumental decision must be made whether explicitly or implicitly. Excess debt leads to a long chain of D words:...
View Article2012: Off to a Good Start; More to Come
Contact Beck Capital Investments In December, when my 2012 view became positive, I questioned whether I was misinterpreting the value of the LTRO and the Chinese reduction in their Bank Reserve...
View ArticlePreserving the Debt: The Helium Express
How much country debt is too much? This is an issue of relativity. In this case relativity depends on the income flows from which debt service can be paid. Whether the debt belongs to the consumer or...
View ArticleWarren Buffet and the New Calculus of Gold
There has long been a disconnect between gold and institutional investors. The instincts of these managers of large sums are typically tied to the generation of cash flows to feed the monster — that...
View ArticleAmerica’s Exorbitant Privilege is Skating on Thin Ice
The willingness of the rest of the world to hold a block of its assets denominated in the U.S. dollar means that U. S. asset prices are enhanced and the U. S. is able to sell a substantial portion of...
View ArticleThe Evils of Serial Quantitative Ease and the “Welfare of Everyone”
Not since the days when Mark Twain’s Tom Sawyer charged his friends for the privilege of painting his fence has the world gone quite so upside down and backwards as when the European Central Bank...
View ArticleThe Keynesian Dead End: A Watershed Moment
John Maynard Keynes had an idea that seemed good at the time (the 1930s): Governments can stimulate an economy with what he called “loan-expenditures” — that is, debt-financed spending. This past week,...
View ArticleThe Deflationary Trap and the Central Bank Game of Chess
Few who lived through the “runaway” inflation of the 1970s would have dreamed that someday inflation would be a desirable public policy? We have come to find out that it surely beats deflation. But how...
View ArticleGoodbye to the Robinson Crusoe Bond Market
With the U. S. economy having achieved lift-off momentum, the Federal Reserve has ended it epic and historic bond buy known as quantitative ease. The corollary reflex is that interest rates will return...
View ArticleOil Boombustology
It’s long been in the DNA of market observers that when money growth outpaces the economy’s growth, booms are created and so are busts. The latest is the oil boombustology with greater impact than is...
View ArticleThe Point of No Return for Government Debt
The developed world economies have high government debt loads and as a result retard economic growth. The adoption of central bank quantitative ease (QE) is billed as a monetary policy but in reality...
View Article2012: Off to a Good Start; More to Come
Contact Beck Capital Investments In December, when my 2012 view became positive, I questioned whether I was misinterpreting the value of the LTRO and the Chinese reduction in their Bank Reserve...
View ArticlePreserving the Debt: The Helium Express
How much country debt is too much? This is an issue of relativity. In this case relativity depends on the income flows from which debt service can be paid. Whether the debt belongs to the consumer or...
View ArticleManna from Heaven and Government Debt
Baby Boomer entitlements are now upon us with an acceleration in the government debt overhang. In a novel approach to debt containment, the European Central Bank pays high enough prices for existing...
View ArticleThe Cats and Dogs of the Equity Markets
Driving the economy to fuller employment is a macroeconomic policy success. But it comes at a cost of higher employee costs and generally reduced profit and stock returns. Some firms, in this global...
View ArticleCountry Debt Enablers and the Greek Conundrum
For a country with little penchant to tax and a greater penchant to spend, financing its fiscal deficit is an ongoing chore. When it comes to financing its deficits, governments have tricks up their...
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