Economic Analysis

The BIS Warns on China

Outside the Box

September 21, 2016

I’ve been saying for the past couple years that the next recession here in the US will probably be triggered by an external macro event or cascade of events, coming out of Europe or China. Today’s Outside the Box sharpens our focus on China, which had already got quite a lot sharper with Michael Pettis’s piece in Outside the Box on Sept. 2.

Today’s post comes from Ambrose Evans-Pritchard of the London Telegraph. He is commenting on the recently released quarterly report of the Bank for...

Negative Rates Nail Savers

Thoughts from the Frontline

September 14, 2016

“You shall not crucify mankind upon a cross of gold.”

– William Jennings Bryan, July 9, 1896

“You shall not crucify the retiree and saver on a cross of negative rates.”

– John Mauldin, September 14, 2016

Calling an Economic Audible

Thoughts from the Frontline

September 11, 2016

Dear Friends,

Now is the time I would normally be sending you Thoughts from the Frontline, but this week I’m calling an audible. Rather than leave you wondering, I’m sending this short note to explain the new game plan.

BioTime Makes History with Announcement of First Stem Cell Spinal Cord Therapy Results

Outside the Box

September 7, 2016

As my regular readers know, I am heavily focused on the massive monetary policy errors that are being foisted on the world by central bankers. This is not going to end well. My letter this weekend will probably be one of the most controversial that I have ever written, and I will probably lose a few longtime readers from the Federal Reserve. (Yes, some of them actually read me, probably more for the humor than the instruction, and for talking about me around the water cooler). For this week’s...

Monetary Mountain Madness

Thoughts from the Frontline

September 4, 2016

“Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”
– John Maynard Keynes

Does It Matter If China Cleans Up Its Banks?

Outside the Box

September 2, 2016

It has been a while since we have taken a close look at China. After the dustup with Chinese “depreciation” about this time last year and all the hysteria, all eyes have been trained on the rest of the world. It has been only a little more than a year since we published the book I co-wrote with Worth Wray on China, which we called “A Great Leap Forward?” The title was meant to be ironic, because the original Great Leap Forward imposed by Mao in the ’60s was one of the most economically...

Six Ways NIRP Is Economically Negative

Thoughts from the Frontline

August 29, 2016

“Positive anything is better than negative nothing.”

– Elbert Hubbard

“Once you replace negative thoughts with positive ones, you’ll start having positive results.”

– Willie Nelson

Renzi’s Great Gamble

Outside the Box

August 24, 2016

There is an extremely important election coming up, and I am not talking about the US presidential election. The upcoming referendum in either October or November in Italy may have as much or even more macroeconomic impact on the world as the US election, but hardly anyone outside of Italy is paying much attention to it – yet.

I have been saying for some time in interviews around the country that I think the referendum in Italy has even more potential impact than the Brexit vote did in the...

Weapons of Economic Misdirection

Thoughts from the Frontline

August 21, 2016

“Measurement theory shows that strong assumptions are required for certain statistics to provide meaningful information about reality. Measurement theory encourages people to think about the meaning of their data. It encourages critical assessment of the assumptions behind the analysis.

“In ‘pure’ science, we can form a better, more coherent, and objective picture of the world, based on the information measurement provides. The information allows us to create models of (parts of) the world and...

The Globalization Disconnect

Outside the Box

August 17, 2016

There has been a monster debate going on in economic circles as we try to assess the reasons for Brexit/Trump/Sanders and the developed world’s rejection of the directions in which the establishment wants to take us. There are many explanations, which try to spin answers to fit the authors’ own economic or political views; but it all goes back to my thesis that the benefits of globalization, like the future, are unevenly distributed. Those who have been on the short end of the distribution...