economics

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

China’s economic planners have failed to recognize that the real driving force of innovation is disruption. To truly foster this kind of creativity, entrepreneurs would need unfettered access to domestic capital markets and private capital, a situation that would undermine Beijing’s control of China’s business elites. Without the possibility of

separation between the real and financial economies results in protracted capital misallocation, as flows of funds and created credit are focused into purchasing existing assets in the pursuit of stable savings returns from known predictable cashflows and anticipated capital gains in asset values.

In so doing it reduces consumption by reducing disposable household income and increases production by lowering input costs, thus pushing up the savings rate. But notice again that Fredonia’s higher savings rate has nothing to do with Fredonians deciding to become thriftier or harder working.

China doesn’t have a competitive market system in which only the best competitors survive, and governments are notoriously bad at picking winners. Lithography development and setting up foundries are both extremely expensive programs, and just throwing money at random companies is going to produce a lot of waste.

In retrospect, these were obvious markets for hard drives, but at the time, their ultimate size and significance were highly uncertain.

It is inconvenient to the narrative then that the effect of a depreciating currency, in addition to the import tariffs and oil price spikes, all happened after 1971. In reality, however, inflation was already biting by the end of the ‘60s, making the cited reasons for the Great Inflation merely events that exacerbated a problem that was already

Emerging markets as we currently know them didn’t exist during the 1980’s dollar spike. The MSCI Emerging Market Index was created shortly afterward in 1987, and it was a small share of global GDP at the time. Developing countries of course existed during this dollar spike, but just weren’t significant players in the dollar market. So, this 1980’s

Notably, Stephen Miran and Nouriel Roubini recently published a paper about “Activist Treasury Issuance” which is their term that refers to the Treasury Department taking unusual actions to offset the Fed’s tightness. Both Miran and Roubini are economics PhDs and worked in various capacities with the Treasury Department in the past.

In the paper,