economics

This means that the continuation of the current housing boom may be heavily dependent on interest rates staying low.

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.

This was a direct challenge to a core thesis of the classical economists: “Savings are always beneficial because they allow greater accumulation of capital.

From a capital cycle perspective, the above situations only become attractive when stock market valuations fall to a fraction of replacement cost and a path opens up for dealing with the excess capacity.

It is widely understood in economic theory that financial distress costs for overly indebted businesses are actually incurred not at bankruptcy but long before, when weakening credit forces stakeholders to behave in ways that undermine growth and reinforce credit deterioration.

A central reason for policy intervention in this boom-bust process, Minsky emphasized, is the ever-present danger that the contraction will get out of control and spread into a system-wide debt-deflation. In this way, a normal business recession can become instead a deep and long-lasting depression, such as happened in 1929-1933 when debt deflation

Take Base Power Company. What’s the Why Now for Base?

There are many, and that’s the point.

Growing renewable generation and electrification of demand has destabilized the grid. Batteries have gotten much cheaper. Engineers have gotten better at distributed systems software. Consumer software keeps getting better. Digital customer acquisition is

False Solutions

The larger problem, as we will see, is that when something “essential” like healthcare or childcare becomes difficult to afford, the knee-jerk reaction of the government is to subsidize it, either by redistributing taxpayer funds and/or borrowing those funds from the future. The problem is that these subsidies will increase the

In April, we returned to the theme in a piece titled “Generational Arbitrage.” As the name implies, a historic price disparity had broken out between the two fuels in North America. This was driven by global oil prices being held artificially high by the Organization of the Petroleum Exporting Countries (OPEC) and the fact that marginal oil