Classical Economics in a Quantum World
In January 2018, I saw a market inflection occurring due to Fed normalization. I wrote Market Memo: Market Inflection. The week I wrote it, the Dow hit 26,600 and then began a decline. Capital flows to where it receives the…
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The Fed creates money based on a monetary standard. Think of a monetary standard as the Fed’s carburetor that regulates how much liquidity gets injected into the economic engine. To maintain a standard requires adjusting base money supply to hit a specific…
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The clearest way to understand current Fed policy and its effect on markets is to view it through interest rates. Interest rates are the price of credit. Credit is not money. When a bank creates credit, it does not create…
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