economics

Exporting capital means importing demand, and except in a few restricted and very specific cases, importing capital, especially for rich countries, will mean slower growth and rising unemployment. The “currency wars” that have been much in the news recently are simply “wars” in which countries try desperately to export their unwanted savings to

When we invest in commodities, we refer to a broad basket of commodities, weighted in a manner that is largely consistent with each commodity’s contribution to economic activity

Second, the decision by countries like China to buy U.S. government obligations is not a discretionary decision that can be made or unmade at will. Remember that the People’s Bank of China does not purchase huge amounts of U.S. government bonds simply because it has a lot of money lying around and doesn’t know what to do with it. Its purchase of

The main weakness of China isn’t the money or talent, but the ideological underpinning. The strategy of internal self-sufficiency for food, raw materials, energy, and now technology, coupled with a focus on exports to push other countries into dependency is essentially mercantilism, a 17th century doctrine which failed both practically and

When you keep forecasting that simple, you free up time and bandwidth for other activities. I like studying the investing behaviors that never change, and I’d never have the time to do that if I spent my day predicting what the economy will do next quarter.

New technologies often interfere with the smooth operation of the capital cycle.

countries and even regions are subject to market-related risks and shocks that can disrupt their behavior, just as companies are, and these risks are transmitted in the same way: through their capital structures. In fact any economic entity’s capital structure can be seen as a sort of volatility machine, one of whose main functions is precisely to

Migrant workers are also unable to get residence permits, called hukou, and without hukou what limited protection workers may have is sharply reduced because living in an urban area without the proper hukou is tolerated but technically illegal.

When commodities are weak, the US Dollar is strong as producer economies underperform. They then set interest rates lower, and lose capital to the US safe haven. US Dollar based borrowing in these countries will sometimes precipitate a crisis at the same time as a strengthening US Dollar makes it harder to repay loans.