a_kind_of_chicken

Hell has put forward his opinion that markets are currently in a bubble of mega proportions; something which he terms the casino economy. As anyone that follows his blog knows, I agree with his proposition that most assets are over-valued but disagree with his analysis of today's phenomenon in terms of a traditional bubble. In this post, I will formally develop my arguments.  I propose that the current asset market bubble is not driven by greed but by fear; fear of a total political / economic meltdown of the global economy. When we view the stock market, bit coin and gold price go through the roof, we should not think of them as bubbles that will eventually deflate but as an ever growing price for insuring against catastrophic financial collapse.  Similarly, when we view the apparently irrational boom in momentum driven assets, we should not think of it as irrational behaviour of dumb people but the rational behaviour of investors who think that the long term does not exist.  If c

 Facts:  Paul Krugman, a Nobel prize winner, has repeatedly claimed the following: "And huge emphasis on monetary aggregates, which have been totally useless at predicting inflation (Milton Friedman got this repeatedly wrong in the 1980s)"   Krugman used the chart below as validation.     The red curve shows the rate of change of inflation and the blue curve shows the rate of change of M1. The amount of  inflation is the area under the red curve; The total M1 is the area under the blue curve; this is high school mathematics.   The total inflation (over a long period of time), aligns quite well with the total M1 (over a long period of time); hence, this chart is  not evidence that inflation is not  correlated with M1; indeed, the chart indicates the opposite.   The chart does indicate that inflation is not instantaneously related to M1; but to be honest, no one cares if money printed today causes hyper-inflation tomorrow, or in two years time. I suggest that these series of po

Democracy assumes that the majority of the population cares about the country more than themselves. This is increasingly not so. As the Greeks warned so, pure democracy is dangerous.  If we have a democratic system where everyone  focuses only on himself, everyone will keep garbing from the government, resulting in a erosion of social and moral values. The following proposal is suggests a system that can promote the ideals on which the United States of America is founded, while providing a mechanism for transiting from the current system. ################################################# America citizenship is a honor to be earned, not a right to be demanded because of accident of birth. Citizenship is open to everyone, regardless of race, language or creed. 1) All men are not equal. We acknowledge this by giving those that contribute more a greater number of votes, better welfare, medical care, etc. 2) There are twelve ranks of citizens.  3) Each citizen  in ranks 1-10 is entitled to

Abstract MMT suggests that money printing is an answer to consumption collapse, in which there exist a free-lunch, where the printed money can be spent without causing inflation. This conclusion is so counter-intuitive that some have termed it "a theory so stupid that only a modern academic would accept it". However, MMT seems to be the only explanation for current empirical evidence. In this post, a non-economist proposes an alternative, theoretical explanation for current events that models the current financial system as a Ponzi scheme which rapidly absorbs wealth from the economy around it. This scheme can be kept going through the constant printing of money for it to absorb. Further, there is no apparently inflation, as the Ponzi scheme is absorbing the new money. We explain that while apparently attractive, such a scheme will lead to decreasing efficiency and market dysfunction, with inflation re-appearing as an end game scenario. Our theory concludes that there is no f