Booms and Busts

Liquidity only disguises risk; it does not resolve solvency issues driven by collapsing cash flows while costs remain elevated.

Despite double-digit unemployment rates, banks are keeping loan-loss provisions low, no doubt assuming Uncle Sam will keep everyone’s boat afloat. But all good things come to an end.

The mother of all monetary stimuli could turn out to be worse than a dud—a catalyst to a slide into further recession just as the supply shock of pandemic recedes.

Just how is this magic created? The spurring of demand in the midst of a covid-created depression. The wizards at the Fed and Treasury have created an intoxicating frothy brew for stock and home buyers alike.

If we can spend a few trillion overnight to bail out investors and send out 150 million stimulus checks, why not also launch a universal basic income and a slavery reparations program?

Europe's path to long-term stagnation should serve as a reminder for the United States, again, of why it is not advisable to follow the eurozone policies. The results are invariably disastrous.

Despite double-digit unemployment rates, banks are keeping loan-loss provisions low, no doubt assuming Uncle Sam will keep everyone’s boat afloat. But all good things come to an end.

Since government creates nothing itself, all interventions are nothing more than transfers of wealth for the benefit of some and the destruction of wealth for everyone else.

Our high levels of malinvestment mean that negative interest rates will not have the steroidal effect that's hoped for. But they will deliver another few years of subpar debt-fueled economic activity.

The crisis we faced in 2008 has not gone away, as we failed to heed its warning to change course and reduce debt levels. Instead, it has become bigger and more dangerous.