money supply

Blog

Say Goodbye to the Purchasing Power of the Dollar

Mr. Bernanke goes to Crazytown
Sunday, March 24, 2013, 11:29 PM

On a long solo car trip this past weekend, I downloaded several podcasts to listen to as the miles passed. One was a classic: The Invention of Money, originally released by NPR's Planet Money team back in January of 2011. I highly recommend listening (or re-listening) to it in full.

The podcast is a great reminder of how any currency in a monetary system is a fabricated construct. A simpler way to explain this is to say it has value simply because we believe it does. » Read more

Blog

The Tangled Relationship Between Wealth & Money

And why we're focusing on the wrong economic 'fixes'
Tuesday, January 22, 2013, 9:43 AM

One of the most dangerous mistakes possible to make in trying to understand the shape of the economic future is to think of the fundamental concepts of economics as simple and uncontroversial.  They aren’t. 

In economics, as in all other fields, the fundamentals are where disguised ideologies and unexamined presuppositions are most likely to hide out, precisely because nobody questions them. » Read more

Podcast

Paul Brodsky: Central Banks are Nearing the 'Inflate or Die' Stage

So hold tightly to your gold
Friday, July 6, 2012, 6:46 PM

"It's impossible to have a political solution to a balance sheet problem" says Paul Brodsky, bond market expert and co-founder of QB Asset Management.

The world has simply gotten itself into too much debt. There are creditors that expect to be paid, and debtors that are having an increasingly difficult time making their coupon payments. No amount of political or policy intervention is going to change that reality. (Unless a global "debt jubilee" transpires, which Paul thinks is unlikely).

Looking at the global monetary base, Paul sees it dwarfed by the staggering amount of debts that need to be repaid or serviced. The reckless use of leverage has resulted in a chasm between total credit and the money that can service it.

So how will this debt overhang be resolved?

Central bank money printing -- and lots of it -- thinks Paul. » Read more

video

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In order to understand the urgency I feel about the issues covered in the Crash Course, you need to understand the power of compounding. If something, such as a population, oil demand, a money supply, or anything else steadily increases in size in some proportion to its current size, and you graph it over time, the graph will look like a hockey stick.

Said more simply, if something is increasing over time on a percentage basis, it is growing exponentially. With exponential functions, the action really only heats up in the last few moments. There is simply not a lot of maneuvering room once you hop on the vertical portion of a compound graph.