The Ticking Time Bomb of Higher Interest Rates
Most mainstream economic commentary focuses on large headline numbers like the level of the Dow Jones and S&P 500, on the number of jobs created, or on the unemployment rate. But far more important numbers are often ignored – interest rates. Very few people understand the concept of interest, or the importance of interest rates to the functioning of...
Continued Stock Market Upheaval Makes the Case for Gold
The horrendous stock market performance last week has hopefully put to rest any notions that the Dow Jones will continue pushing upward to set new highs. A market that is reliant on easy money and investor euphoria for its continued growth is a market that is destined to crash, and to crash hard. The economy is under attack on...
Deposit Insurance Leads to Moral Hazard
The fractional reserve banking system is a system that is doomed to fail, it’s just a matter of when, not if. Governments throughout history have taken steps to prop up that system, but in the long run nothing has ever worked. You just can’t loan out deposits while telling depositors they can retrieve their money at any time without...
More Tariffs Means the Economy Is in for a Rough Spell
With his recent decision to place tariffs on imported steel and aluminum, President Trump could cause some serious disruption to the economy. In an attempt to rectify what he sees as an uneven trade deficit, he could harm American industries and consumers. But with so much discussion of the trade deficit, it is surprising that no one seems to...
New Fed Chief Doesn’t Inspire Confidence
Last week saw the first Congressional testimony of new Federal Reserve Chairman Jerome “Jay” Powell. Anyone who expected anything groundbreaking from his testimony was, of course, disappointed. But Powell’s appearance did show signs of his thinking and of what we might expect from the Fed going forward. For investors, both Powell’s testimony and his answers to questions didn’t inspire...