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September 19, 2019 | Democracy Doomed the Money System

YOUGHAL, IRELAND – Yesterday, the Federal Reserve did as expected, cutting its key lending rate by another 25 basis points (0.25%). This was not what the president was hoping for. Yahoo Finance: President Donald Trump on Wednesday harshly rebuked the Federal Reserve, accusing the central bank and Fed Chair Jerome Powell of having no “guts” […]

September 14, 2019 | All Major Economies Are Caught in an Inflate-or-Die Trap

YOUGHAL, IRELAND – We’re exploring the old adage: What goes around comes around. And what we see coming around almost everywhere is inflation. We make haste to explain that we’re not talking about common consumer price inflation, but about inflation of the money supply, which could show up almost anywhere. More Fake Money In the […]

September 7, 2019 | Markets Revert to the Mean Eventually

YOUGHAL, IRELAND – This week, we’ve been working our way down the very short list of things we think we know. At first glance, our second lesson, described yesterday, does not seem very helpful. “Nobody knows anything,” may be Gospel Truth. But it doesn’t tell you what movie to watch or what stock to buy. Still, […]

September 5, 2019 | The Internet Age Distorted the Meaning of Wealth

YOUGHAL, IRELAND – The ferry from Cherbourg was calm, almost eerily silent all the way to Dublin. Truck drivers sat drinking their beer. Retired couples collected their trays and ate their dinners. Some chatted in French. A few spoke Polish with the ship’s crew. Most were Irish, speaking with each other softly. It was nothing […]

August 22, 2019 | Our Fake-Money Bubble Will Burst

The mills of the gods grind slowly, but they grind small. – Sextus Empiricus POITOU, FRANCE – The year moves ahead. Here in France, leaves are already beginning to dry, curl, and fall to the ground. A gentle breeze shuffles them along, driving them into corners and under bushes. Last night was cold. We were […]

August 19, 2019 | Negative Interest Rates Are Not Normal

Something is rotten in the state of Denmark. – William Shakespeare, Hamlet POITOU, FRANCE – Every week, we reach new heights of weirdness: …the worldwide total of debt trading at negative interest rates rose to $17 trillion… …nearly 15% of S&P 500 companies no longer earn enough money to even cover the interest on their loans… […]

August 18, 2019 | Inflation Has Eroded the U.S. and Chinese Economies

One day, the China trade imbalance is such a national emergency that you’re willing to disrupt hundreds of billions in world trade and risk a global recession to set it right. The next, you call it off because it might interfere with the Christmas shopping season. That was the big news yesterday. Once again, Trump […]

August 13, 2019 | The Fed Should Let the Market Set Rates

POITOU, FRANCE – Yesterday, stocks traded down. Investors are getting spooked by high bond prices (low yields). MarketWatch: The yield for the longest-dated Treasury bond is now a hair’s breadth away from plumbing its lowest level in history. Investors said the $22 trillion U.S. government debt market was now approaching this key milestone on a […]

August 6, 2019 | Why We’re Keeping Our “Crash Alert” Flag Up

POITOU, FRANCE – Watch out, Dear Reader, this could be a tough week for investors. Investor’s Business Daily reports: Dow Jones futures sold off sharply Sunday night, along with S&P 500 futures and Nasdaq futures, as China’s yuan tumbled to a record low. That follows a tough week for the current stock market rally as new […]

July 23, 2019 | It’s the Era of Inflate or Die

  PARIS – Oh boy… Paris is in for a real scorcher. The temperature is rising… and is expected to crest at 108 degrees on Thursday, a new record. Tourists wilt. The streets are empty. Shutters are closed against the sun during the day… and open wide for whatever cool air the night offers. We’re […]

July 19, 2019 | Two Reasons the Feds Can’t Sit Still

YOUGHAL, IRELAND – Once again, a beautiful summer day here in Ireland. But we have no time to smell the flowers. It’s Inflate or Die, the new era that began, more or less officially, in May of this year. It was then that the Fed abandoned any pretense of sensible monetary policy and looked for […]

July 12, 2019 | The Federal Reserve Continues to “Mend” the Economy

In this hard world we have to earn before we spend. – John James Cowperthwaite, British civil servant and former financial secretary of Hong Kong YOUGHAL, IRELAND – The week is ending as it began, with a cacophony of numbskulls. Yesterday, one of them – speaking to his empty-headed brethren – gave out more wrong-headed, […]

July 9, 2019 | Why Everyone Wants More Inflation

  DUBLIN – Our little galaxy pals were scratching their juicer heads. Negative rates… financialization… backasswards time, something from nothing… They are affronts to God and Nature… breaches of the laws of physics and the universe… and invitations to economic catastrophe. Why would anyone believe they could stimulate an economy with fake money? Or that a small […]

July 5, 2019 | Main Street Relies on Rate Cuts

YOUGHAL, IRELAND – It’s a beautiful day here in Ireland. People are out and about, wearing shorts and T-shirts. “This is an Irish summer,” a carpenter explained. Sunny skies. Flowers in bloom. Top temperature: 66 degrees. Construction Site We moved into our house a week ago. But it is still a construction site. Every morning […]

June 28, 2019 | Inflation Has Distorted The U.S. Markets

PORTLAW, IRELAND – Yesterday, once again, the Dow rose in the morning – on news that a deal with China was 90% done – and fell later, as investors realized that they couldn’t believe anything that came out of Washington. Meanwhile, the president of the United States of America says he’d rather have a European […]

June 22, 2019 | The Financial World’s Most Popular Delusion

DUBAI – “What do people do here?” we asked a local. “Well, they go out to dinner. And they go shopping. We have the nicest malls in the world.” The whole city depends on air-conditioning. Without it, it would be uninhabitable… like Antarctica. Or West Baltimore. Yes, there were people here before AC was invented, […]

June 10, 2019 | How Hot Money Put America in Hot Water

YOUGHAL, IRELAND – Two newsworthy things happened on Friday. As to the first, we were right after all. Mr. Trump isn’t going “Full Retard” in his trade war. At least, not with Mexico. His dramatic declaration of an escalating tariff… until the flow of illegal immigrants “STOPS”… must have been just another of the showman’s […]

June 4, 2019 | Stocks Have a Rendezvous With Destiny

DUBLIN, IRELAND – Stocks couldn’t decide where to go yesterday. Up? Down? So, they went nowhere. Nowhere is about as good as it gets in this market. Because signs of an impending slowdown are arriving in the news every day. The latest item was a sharp drop in the Purchasing Managers’ Index (PMI), which measures […]

May 28, 2019 | Have We Passed “Peak Prosperity”?

YOUGHAL, IRELAND – There are three important decisions in life: What you do… with whom you do it… and where you do it. What. Who. Where. Keep it simple. And you only have a limited amount of time; you want to make sure you get those basics right. Otherwise, you arrive as one of those […]

May 21, 2019 | How America Goes Full-Venezuela

LONDON – We first came to London a half-century ago. Back then, the city was tired and drab. We stayed in a hotel, where we had to put coins in a heater to get any warmth and use the bathroom down the hall. Now, London is a different city, full of young people, energy, and […]

May 17, 2019 | Here’s What Uber Is Really Worth

PARIS – Wall Street continued its recovery yesterday, the Dow rising 116 points. Investors believe – as we do – that the trade war will blow over… or at least calm down into tweety skirmishes. The Donald himself is already backing off, calling it only a “squabble.” The Trump administration also signaled that it would […]

May 16, 2019 | Here’s What Uber Is Really Worth

PARIS – Wall Street continued its recovery yesterday, the Dow rising 116 points. Investors believe – as we do – that the trade war will blow over… or at least calm down into tweety skirmishes. The Donald himself is already backing off, calling it only a “squabble.” The Trump administration also signaled that it would […]

May 15, 2019 | The Nice Thing About Donald Trump…

In the fire of spring Your winter garment of repentance fling: The bird of time has but a little way To flutter – And the bird is on the wing. – Omar Khayyám, Rubáiyát PARIS – We are sitting at a sidewalk café in the 7th arrondissement. The sun is shining. People come and go; endless streams from the […]

May 14, 2019 | Should Alabama Impose Tariffs on California?

YOUGHAL, IRELAND – We bet that Trump would never go full retard in his trade war with China. Were we wrong? Maybe.   Out of the Money Last week, our no-real-trade-war bet was moving further and further out of the money. Team Trump didn’t yet go full retard, but – raising tariffs on $200 billion of Chinese […]

May 10, 2019 | The Only Real Way to “Fix” Capitalism

YOUGHAL, IRELAND – World stock markets are already down more than $2 trillion – supposedly on “trade war worries.” And now, Friday has come. Tariffs have gone up. $200 billion worth of Chinese imports now face levies of 25%, up from 10%. And the trade negotiations with China continue. Foreign markets are selling off a […]

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