Hegel Meets Kierkegaard on Wall Street: The Unintended Consequences of Placebo Treatments
This year marks the 100th anniversary of Kierkegaard’s birth. The father of existentialism had a clear target, to show that Hegel’s attempt to systematize all reality was an exercise in futility. According to Kierkegaard, Hegel left out the most important element of...
Speculating into the Void: The Demarcation of Absorption Capacity
It has been a week now since the Japanese markets have been exhibiting significant volatility. What we have been observing is that both equities and bonds show signs of turmoil. This may continue, however we anticipate that the Japanese stock market will end up the...
On Gold, the Proclaimed “Success Stories”, and the Placebo Treatment: Is there Substance in Recent Developments?
Late last year I wrote that we anticipate precious metals to suffer losses in 2013. We would not be surprised if this lasts more than a year. In one of the commentaries late last year, I was also wondering if this year would be crowned as a year of vindication for...
At the Intersection of Equities Road and Monetary Boulevard: Seeking Collateral Base
Could it be that the over-collateralization and re-hypothecation of paper assets via the derivatives avenue has created a huge hole in the financial system that the monetary authorities are called to fill in order to save the day? If that could serve as our null...
The Eureka Moment of the EU, Market Cyclicality, and Monetary Aggregates: Approaching a Crossroad
A few days ago Jose Manuel Barroso (President of the European Commission) declared that austerity has its limits. The Eureka moment which says that you cannot add by subtracting finally arrived in the EU. When Archimedes proclaimed the “Eureka” moment he run with...
Resilient Markets Searching for Vitality: Incompatible Affections and Inept Detachments
I do not think that we would have had a hard time if we desired to find alarming market signals. However, the message from the markets seems to be a resilient one. This past week new record highs were achieved, while the arch-enemy of fiat money (gold) reached its...
An Attempt to Explain Stagnation, Growth, and Inflationary Episodes in the Post Bretton Woods II Era: The Absorption Framework
I think we are all puzzled by the fact that despite the pumping of credit via monetary reserves in several western nations, we still feel that stagnation prevails and certainly growth is not optimal. At the same time we are still wondering why we have experienced so...
“It is Finished”: Financial Institutions, Economic Stability, and Hades
Last Thursday (March 28) professor Simon Johnson of the MIT (former chief economist of the IMF) published an excellent piece in his blog (http://economix.blogs.nytimes.com/2013/03/28/the-debate-on-bank-size-is-over/#postComment). Needless to say that nothing else...
10 to Midnight in the Garden of Credit: Socrates Wonders About Cardinal Rules, Historical Precedents, Matter-Antimatter, and the Fantasy Era of Fiat Money Creation
The unfolding events – by the hour – in Cyprus shine light to a historical precedent: When the next crisis comes around bank deposits may not be spared. This is presented to the public as a “just” decision due to the Cypriot “banking sins”. We will be exploring...
Lasciate Ogne Speranza, Voi Ch’intrate: Dante Meets Pandora in Aphrodite’s Island a.k.a. Cyprus
In Dante’s Inferno, the poet is guided in the underworld by the great Roman poet Virgil. As he enters the gate of Hell (Inferno) the inscription reads “Lasciate ogne speranza, voi ch'intrate” i.e. “abandon all hope those who enter”. It seems that the EU leaders in the...
