economics

It is solved precisely through the price system. It is solved through the constantly changing interrelationships of costs of production, prices and profits.

Go down the list of historical investing blunders, and I’m telling you, no less than 90 percent of them are caused by investors trying to compress this natural, “most convenient” time horizon.

A budget deficit, in short, is inflationary only to the extent that it causes an increase in the money supply. And inflation can occur even with a budget surplus if there is an increase in the money supply notwithstanding.

When deflation is a threat, however, this decoupling can last for several years.

In 1944, the US led other countries in putting together the Bretton Woods system, in which most currencies were pegged to the dollar, and the dollar was pegged to gold.

In 1971, however, the US defaulted on this system, rendering the dollar no longer redeemable for or fixed against gold. After that, all currencies rapidly fell vs gold, and along

We now introduce net investment, or creation of tangible wealth, into the model economy. Investment has two components: net fixed investment (the net increase in the economy’s stock of structures and equipment) and inventory investment.

Potential Winners and Losers: In an inflationary environment: o Losers: Long-duration bonds, high-growth tech companies reliant on cheap capital, and heavily indebted entities vulnerable to rising interest rates.

o Winners: Real assets like commodities, infrastructure, and companies with pricing power or exposure to supply chain restructuring.

Regardless of what happens next, the Great Banking Transition is very real, very large, and very tangible.

It has been affecting three key pillars of banking: the balance sheet, transactions, and distribution.