Das Aufpumpen, La Inflazione, L'inflation Augmente, Inflación No matter how you spell inflation, whether you are German, Italian, French or Spanish, it means loss of purchasing power. Europe is finally experiencing the aftereffects of- (1) a zero-interest rate policy and (2) an increase in the money supply (M2). It got so crazy in Europe last year when suppressed interest rates became negative that a Danish homeowner (Hans Peter Christensen) [...]

Is the pursuit of a college degree still the value proposition that it once was? There is no doubt that the wage gap still exists between those with a bachelor’s degree and those with a high school diploma.  In fact, according to a Federal Reserve Bank of New York study on The Labor Market for Recent College Grads, the median wage gap for full-time workers has only widened during [...]

So, what recent break-up is more tragic and noteworthy that any romance in Hollywood?  It is the break-up of the Federal Reserve with Wall Street. Quantitative Easing (QE) officially ended last week.  No more Fed money printed out of thin air.  No more money that helped propel the S&P up over 500% and the Nasdaq over 1,100% from the March 2009 bottom.  No more artificial suppression of interest rates [...]

There’s been a lot of talk and almost constant storylines in the media about inflation.  Is inflation here to stay?  Is it transitory?  What will the Fed do with rates? Let’s take a step back to some more fundamental economics.  For Milton Friedman, inflation was never a cost-push, demand-pull or the effect of a rate increase, but a national phenomenon produced by monetary policy.  Friedman concluded that inflation was always [...]

There seems to be at least a subtle change to the approach governments are taking to handle the Coronavirus.  The story below describes how Spain is preparing to treat the virus as an illness to handle, like the flu or the measles, as part of a new endemic response to the pandemic.  Other countries are also moving in this direction- an ‘endemic phase’ is being considered in Portugal, and [...]

There was a good article posted earlier this week by my good friend and colleague Brian Kasal in The Leadership Matrix on how the average consumer pays for the energy consumption of Bitcoin. The amount of energy consumed to produce Bitcoin is simply astounding.  Truth is, as more cryptocurrencies hit the market, there will be a greater and greater amount of electricity needed.  The real problem is the increased [...]

The value of the Turkish Lira is in absolute free fall, having lost 50% of its value since September.  This drop-off started when President Recep Erdogan ordered the Turkish central bank to slash rates to combat runaway inflation.  You heard that right- interest rates are being cut in Turkey to address inflation!  To be precise, four interest rate cuts have been implemented since September.  For perspective, central banks around [...]

It seems like at every turn, the effects of the semiconductor shortage can be seen.  An earlier Collar Stocks post touched upon how semiconductor supply chains are no longer ‘Fit For Purpose’ in the automotive industry.  It’s not just about the manufacture of cars- the chip shortage affects about any tech-related product.  In one way or another, semiconductor technology is imbued into many of the products used today.  A [...]

My good friend and colleague Brian Kasal of FourStar just posted a great piece on the century-old dispute over who has the right to brew one of the most recognizable beers in the world- Budweiser. Reading his post brought to mind another famous intellectual property dispute that involved a patent on the machinery invented to produce one of the first ready to eat breakfast cereals, Shredded Wheat.  The inventor, [...]

Despite an uncertain consensus (see The Consensus Outlook on Inflation is… Uncertain!) on the risk for a period of prolonged inflation, a narrative is starting to develop that inflation is actually here.  The real question is whether the inflation is transitory, prolonged, or perhaps something in between. Will it stay or will it go? Here are some inflationary observations by John Cochrane, senior fellow of the Hoover Institution at [...]