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Profits of Chaos

Austrian Economics for Investors. With Professor Peter St Onge. To get free updates just type your email in the box.

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bear-vs-bullToday’s post is a bit more technical than usual, because I’ll be at Doug Casey’s Summit next week and want to get some thoughts out there.

One of the biggest questions for a 2014 asset manager is what’s next for bonds. The answer is both easy and hard: the easy part is that bond prices depend on inflation, since the Fed is obsessed with inflation and happens to controls bond prices.

The harder question is what’s next for inflation? There are two stages here. First stage is what comes out of the economy itself, “in the wild” so to speak. The second stage is how the Fed reacts.

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piperBack when Quebec was weighing secession from Canada, I was a lowly American undergrad living in Montreal. It was an exciting time, since in America we have our railroads torn up and population starved when we secede. Now that Scotland is going through the motions, I figured I’d stir the pot, economically. [click to continue…]

What Makes a Tax Go Bad?

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taxman7A former student asked me to write up a piece on pro’s and con’s of different types of taxes. Of course all taxation is armed robbery. But whether you’re running a protection racket or voting in a democracy, it’s worth getting into why particular types of taxes are chosen, and whether one type is “less bad” than others.

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Reversing the Strangle

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The world economy is being slowly strangled. Can it be reversed?

We can start in Asia. The mainstream narrative is that China will take over the world while Japan watches from its deathbed. Last week I argued that Japan’s decline is greatly exaggerated, a myth that covers the big swindle. This week it’s China’s turn under the microscope. More accurately, it’s democracy’s turn under the microscope.

What makes China unique among major economies is neither its fast growth nor its size. It’s the simple fact that [click to continue…]

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Shinzo on the MikeOne of the great economic myths of our time is Japan’s “lost decades.” As Japan doubles-down on inflationary stimulus, it’s worth reviewing the facts.

The truth is that the Japanese and US economies have performed in lock-step since 2000, and their  performance has matched each other going as far back as 1980 (!)

Either Japan’s not in crisis, or the US has been in crisis for a good 35 years. You can’t have it both ways.

Here’s a chart of [click to continue…]