Classical Economics in a Quantum World
The Fed unleashed a coming market inflection with the onset of normalization. In our global fiat system, as long as the dollar remains the world’s reserve currency, the Fed forces global central banks to adopt its policy. A Fed balance…
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Despite ample evidence that we have entered a new monetary normal defined by the advent of negative interest rates and stagnated growth, few understand the implications of massive excess reserves on Fed policy. Trump’s potential tax cuts are being equated…
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One way to look at central bank normalization is to envision optimum monetary and fiscal policy and work backward to what is actually possible. Optimum policy is the magic formula of stable money and low taxes. Stable money and low…
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The old rules for evaluating market performance no longer apply. From 1973 to 2008 one could predict market performance based on understanding the gold signal, how fiscal and geopolitical policy affected the supply and demand for base money, and how…
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The economic term normalization has entered the financial lexicon and will soon dominate markets. As with everything the Fed has done since Nixon ended dollar stability by severing its link to gold in 1971, the advent of normalization is just…
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The Fed learned from the taper tantrum that in our hybrid central bank commanded/market economy it is best not to surprise the market. This requires notifying the market far in advance of any change in Fed policy. The Fed has…
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