Money and Finance
National Archives Opens Financial Crisis Inquiry Commission Records [H/T Linc] (LINK)
Prem Watsa's 2015 letter to shareholders [H/T ValueWalk] (LINK)
Chuck Feeney, Bill Gates' and Warren Buffett’s hero, honored by Ireland Fund [H/T Linc] (LINK)
Berkshire's Disintermediation: Buffett's New Managerial Model - by Lawrence A. Cunningham [Paper from last year] (LINK)
The Incredible Rise and Final Hours of Fracking King Aubrey McClendon (LINK)
Sergio Marchionne Has Seen the Auto Industry’s Future: He’s Not Interested [H/T @GSpier] (LINK)
The Economist: Greece’s biggest banks may appear to be out of danger, but they are not (LINK)
The Second Smartphone Revolution (LINK)
Marissa Mayer on Charlie Rose (video) (LINK)
The Epic Story of Dropbox’s Exodus From the Amazon Cloud Empire (LINK)
Hussman Weekly Market Comment: Bearishness Is Strictly For Informed Optimists (LINK)
- Links
FT interview with Google co-founder and CEO Larry Page (LINK) Related books: How Google Works, In The Plex Henry Blodget sits down with Clay Christensen (LINK) Related books: HEREHussman Weekly Market Comment: Losing Velocity: QE and the Massive Speculative...
- Is Monetary Policy A Science? - The Interaction Of Theory And Practice Over The Last 50 Years – By William R. White
And in case you missed the two quotes from White that I posted on Twitter last night as I was listening to his McAlvany podcast (these were in regards to economic modeling and the desire to try and control the economy through monetary policy): "I'm...
- John Mauldin: Can “it” Happen Here?
The beginning of the end of the Weimar Republic was some 89 years ago this week. There is a stream of opinion that the US is headed for the same type of end. How else can it be, given that we owe some $75-80 trillion dollars in the coming years, over...
- Hussman Weekly Market Comment: Sequential Signals
On the subject of inflation, I should emphasize that while I expect inflation pressures to be contained for several years, the impact of massive deficit spending should not be disregarded simply because Japan, with an enormously high savings rate, was...
- Hussman Weekly Market Comment: Two Choices: Restructure Debts Or Debase Currencies
In the end, as I've argued repeatedly over the years, monetary policy is only as good as fiscal policy. A central bank does not have wealth of its own. It is a zero-sum entity that can only enrich those from whom it purchases debt by debasing the...
Money and Finance
Links
National Archives Opens Financial Crisis Inquiry Commission Records [H/T Linc] (LINK)
Prem Watsa's 2015 letter to shareholders [H/T ValueWalk] (LINK)
Chuck Feeney, Bill Gates' and Warren Buffett’s hero, honored by Ireland Fund [H/T Linc] (LINK)
Related book: Berkshire Beyond Buffett: The Enduring Value of ValuesJack Bogle on the Masters in Business podcast (LINK)
The Incredible Rise and Final Hours of Fracking King Aubrey McClendon (LINK)
Sergio Marchionne Has Seen the Auto Industry’s Future: He’s Not Interested [H/T @GSpier] (LINK)
The Economist: Greece’s biggest banks may appear to be out of danger, but they are not (LINK)
The Second Smartphone Revolution (LINK)
Marissa Mayer on Charlie Rose (video) (LINK)
The Epic Story of Dropbox’s Exodus From the Amazon Cloud Empire (LINK)
Hussman Weekly Market Comment: Bearishness Is Strictly For Informed Optimists (LINK)
Beyond those general rules of thumb, what drives inflation? While many economists seem satisfied with having memorized a line from Milton Friedman about inflation being “always and everywhere a monetary phenomenon,” economic models of inflation turn out to be nearly useless for any practical purpose. It’s not difficult to explain inflation, using inflation itself as the main explanatory variable, and information on the output gap is also useful even if unemployment is not. But it’s very difficult to explain most episodes of inflation using monetary variables.
Yes, hyperinflation is always associated with monetary expansion, but monetary expansion isn’t actually enough. Examine major hyperinflations, and you’ll always find a government that has racked up huge external obligations to other countries, and has lost fiscal control by running massive deficits - effectively printing money to fund them. Hyperinflation involves a loss of both fiscal and monetary control, often coupled with a supply shock of some sort, and revulsion toward holding money itself because the willingness of the next person to accept it comes into question.
The long-term value of paper money relies on the confidence that someone else in the future will accept it in exchange for value, and ultimately, that’s a matter of varying confidence in the ability of the government to meet its long-term obligations. Early U.S. money such as confederate currency went to zero because that confidence was absent. Greenbacks held their value because of the expectation (validated in 1879) that convertibility with gold would ultimately be honored. Gold convertibility isn’t necessary, nor are balanced budgets required in the short-run, but confidence in long-run fiscal discipline is essential.
Where the Soldiers Are Scarier Than the Crocodiles (LINK)
- Links
FT interview with Google co-founder and CEO Larry Page (LINK) Related books: How Google Works, In The Plex Henry Blodget sits down with Clay Christensen (LINK) Related books: HEREHussman Weekly Market Comment: Losing Velocity: QE and the Massive Speculative...
- Is Monetary Policy A Science? - The Interaction Of Theory And Practice Over The Last 50 Years – By William R. White
And in case you missed the two quotes from White that I posted on Twitter last night as I was listening to his McAlvany podcast (these were in regards to economic modeling and the desire to try and control the economy through monetary policy): "I'm...
- John Mauldin: Can “it” Happen Here?
The beginning of the end of the Weimar Republic was some 89 years ago this week. There is a stream of opinion that the US is headed for the same type of end. How else can it be, given that we owe some $75-80 trillion dollars in the coming years, over...
- Hussman Weekly Market Comment: Sequential Signals
On the subject of inflation, I should emphasize that while I expect inflation pressures to be contained for several years, the impact of massive deficit spending should not be disregarded simply because Japan, with an enormously high savings rate, was...
- Hussman Weekly Market Comment: Two Choices: Restructure Debts Or Debase Currencies
In the end, as I've argued repeatedly over the years, monetary policy is only as good as fiscal policy. A central bank does not have wealth of its own. It is a zero-sum entity that can only enrich those from whom it purchases debt by debasing the...