There’s a lot of hand wringing about rising interest rates and how it will affect bonds and other income-based investments. There’s a lot of doom and gloom, too, predictions that the bond market will crash if the fed raises rates. There’s a few things to keep in mind: Bond ETFs and futures have mostly priced… Continue reading How Bonds Respond to Rate Hikes
Tag: economics
The Free Trade & Globalization Debate
From Vox Day: The Price of Free Trade In the context of this debate, ‘free trade’ includes exports, offshoring, and insourcing & outcsourcing (of labor), or just simply globalization. The problem with macro economics is with the exception of the fundamentals (like comparative advantage), there is seldom a consensus, unlike subjects such as mathematics and… Continue reading The Free Trade & Globalization Debate
The Nordic Fairytale
Why Denmark isn’t the utopian fantasy Bernie Sanders describes It is fantastic in theory, except that, in Denmark, the quality of the free education and health care is substandard: They are way down on the PISA [Programme for International Student Assessment] educational rankings, have the lowest life expectancy in the region, and the highest rates… Continue reading The Nordic Fairytale
Don’t Blame the Fed – Blame Stupid People, Liberalism, Democracy
Bitcoin keeps going up, now $110 higher than my post about it last week and over $220 higher than my purchase price: Anyway, someone posts: We all know the state of the financial world is far from good, just a few points: Government debt at unprecedented levels. Still at emergency easing levels 8 years later… Continue reading Don’t Blame the Fed – Blame Stupid People, Liberalism, Democracy
Resource Optimization & The Role of the State
Interesting article: There’s No Escaping Competition Scarcity is a defining characteristic of the human condition, and scarcity means there will be competition over who gets what. Market capitalism has the great advantage of channeling that competition through the price system, which not only ensures an ongoing supply of goods but also encourages their efficient production.… Continue reading Resource Optimization & The Role of the State
Obama Should Give His Nobel Prize to Bernanke
If Obama can get a Nobel Prize for doing nothing (and then later being a lousy president), maybe Bernanke deserves one for merely saving the economy in 2008? Full employment without inflation is in sight. The central bank did its job. What about everyone else? Agree, the central bank did a good job by stemming… Continue reading Obama Should Give His Nobel Prize to Bernanke
Economics Myths, Part 8: The Chinese Data is Fake
If you pay attention to the financial media inevitably you’ll come across unsubstantiated musings disguised as rigorous analysis about China’s economy being ‘fake’. But the funny thing is, you never hear similar stories about Brazil’s economy being fake, or about Turkey or Russia’s economy being fake, but China is a favorite target by the doom… Continue reading Economics Myths, Part 8: The Chinese Data is Fake
Economics Myths, Part 7: The Baltic Dry Index is a Reliable Economic Indicator
Doom and gloomers on Zerohedge and elsewhere frequently cite the falling Baltic Dry Index (BDI) as evidence the economy is weak, apparently oblivious to how the BDI works or its poor correlation with overall economic health. From Wikipedia: The Baltic Dry Index (BDI) is an economic indicator issued daily by the London-based Baltic Exchange. Not… Continue reading Economics Myths, Part 7: The Baltic Dry Index is a Reliable Economic Indicator
Economics Myths, Part 6: Alan Greenspan Caused The Financial Crisis
Greenspan: Fed Not Responsible for Financial Crisis If a lie is repeated often enough it becomes the truth, and there are few better examples than the tar and feathering of Alan Greenspan for his purported role the housing and financial crisis. But the preponderance of evidence suggests his culpability is limited or non-existent. In other… Continue reading Economics Myths, Part 6: Alan Greenspan Caused The Financial Crisis
Economics Myths, Part 5: QE (Quantitative Easing) Misconceptions
Few subjects cause as much confusion as QE. The confusion arises due to the politicization of the issue, as well as common misunderstandings and misconceptions about QE that reverberate throughout the blogging/media echo chambers. There are three major misconceptions about QE: 1. QE is money printing 2. Stocks are rising because of QE – and… Continue reading Economics Myths, Part 5: QE (Quantitative Easing) Misconceptions