The Money Bubble

organizations are suffering from “peak complexity,” a concept crucial to understanding the recent evolution – and coming difficulties – of the broader economy.

Japan is the world’s most rapidly-aging nation. To cite just one of many extraordinary data points, in 2012 its citizens bought more diapers for adults than for children.

Ludwig von Mises, a pioneer in the Austrian School of economics, called this sudden loss of faith in a fiat currency a “crack-up boom,” and historically it has spelled the end of the currency in question.

So in 2013 the industry adopted “all-in sustaining costs” as the preferred measure. As Chuck Jeannes, CEO of Canadian miner Goldcorp admitted in his company’s 2012 annual report, “The traditional measure of cash costs is not a realistic view. To produce an ounce of gold, we not only incur operating costs, but we spend sustaining capital at the site

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But because so many of the uses to which these borrowed funds were put turned out to be unwise or unprofitable, debt ended up growing faster than productive assets. This “malinvestment” left the country poorer than it would have been had the money never been borrowed.

Chinese proverb says wisdom begins with calling things by their right name.

Shortly after his inauguration in 1933, President Franklin Roosevelt concluded that US problems were serious enough to warrant devaluation of the dollar, among other aggressive policies. Under Article I, Section 8 of the Constitution, only Congress had the power to “regulate” 6 the relationship between the dollar and gold, but FDR claimed that auth

But in a fiat currency system, where money is not redeemable into a tangible asset and circulates solely because the government says one kind of paper is valuable and other kinds aren’t, perception isn’t just another tool of monetary policy – it is the policy’s prime directive. Because once perception-management fails, the next option is direct coe