Classical Economics in a Quantum World
Understanding Gold 6 Gold’s many properties define it as a monetary proxy. Gold has no real use other than its role as a monetary commodity. Mankind selected it for this role because history has proven the stability of its value. …
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Jude Wanniski in his seminal book The Way the World Works equates the political market with the economic marketplace. If the market is efficient for goods and services, it is equally efficient at processing the known information surrounding a political…
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There is a palpable glee among some that is evident whenever the price of gold falls.¹ It manifests itself in the media, academia, pundits, and certain segments of the investment world. Paul Krugman becomes orgasmic. A fall in the price…
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The Opening Salvo Regardless of what you think about Trump, he recently did the world a big service. He pointed out, in his unique, unadulterated style, the monetary elephant in the room to a global audience. Trump’s attack on the…
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Fed Operating Targets The latest round of will-the-Fed-or-won’t-the-Fed-finally-hike-rates has passed. The world waited breathlessly for the Federal Reserve to announce their latest FOMC decision. Once again, the Fed punted on announcing another measly .25% funds rate hike and averted the…
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Understanding Gold 5 I deem the idea that everyone understands gold’s value but few understand why it has value, the gold paradox. The primary reason is that academia, over the last 80 years, has increasingly dismissed gold as a monetary…
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Understanding Gold 4 On August 15, 1971, Nixon, by executive order, broke the dollar-gold link that had anchored the Bretton Woods international monetary system since 1944. (The link was officially severed in February 1973.) This was the beginning of the…
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“Central banks are treading in uncharted waters. Sidney Homer and Richard Sylla, the authors of A History of Interest Rates found no instance of negative rates in 5,000 years. Now there are $11.7 trillion invested in negative-yield sovereign debt, including $7.9 trillion in Japanese…
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Despite its present day seeming omnipotent power, the Fed still retains only one significant economic lever.¹ This has been true since the Fed’s creation in 1913. The Fed can create base money or remove it. The Fed has complete, total…
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The monetary reference point is where debtors and creditors are in balance. There is no inflation or deflation and neither creditors or debtors benefit at the expense of the other. There is no risk penalty added to terms of trade…
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