The invisible hand of economics on December 18, 2017The invisible hand of American presidential politics is economics. Almost imperceptibly guiding the electorate, no other issue is as determinant of a presidency’s success. Currently, it is supporting Donald Trump through his political problems and could push him to re-election, as it has so many others. Adam Smith in “The Wealth of Nations” observed that […]
The high cost of subsidised credit g Artificially low interest rates encourage risky borrowing on May 1, 2016The global economy is sick and its central bank doctors risk making it sicker. There has been a steady worldwide march toward cheaper credit, in hopes of resuscitating lagging growth. However, this treatment threatens a twofold risk: encouraging moral hazard in the short run and harming the market mechanism in the long run. In January, […]
The catastrophically high pricing of assets suggests we’re heading for another financial crisis on May 1, 2016The conditions for a new financial crisis are firmly in place. Mispricing of assets has now reached epidemic proportions. Since 2009, global equities prices have increased strongly. Banks argue that the falls of August 2015 and early 2016 represent a healthy correction and present good buying opportunities. Volatility -the fear and greed index, at least […]