How Essential is ‘Essential’?

In the drive to prevent (viral) death by means of mass (economic) suicide, our Overlords have begun to order the cessation of activities in all ‘non-essential’ businesses.

While one can sympathise with the sentiment, it is, sadly, yet another example of the ignorant doing harm by trying to do good, since it shows absolutely no understanding of the complexity of the modern economy or of the elevated degree of interdependency which exists within it.

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Overstretch

Markets have paradoxically both been on edge – and in the throes of euphoria – since the repo shock in mid-September, being at the same time alarmed and yet strangely reassured by the Fed’s frantic backpedalling and the $400+ billion boost to its balance sheet which this entailed. Extreme levels of overstretch are everywhere apparent.

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CHART PACK: Cracked China

In line with the trends – both real and monetary – whose development we have long been documenting, China’s economic situation continues its sharp deterioration. Much of this is principally domestic in origin even if patently being aggravated by President Trump’s ‘Trade War’ – something which is actually providing a not entirely unhelpful, political fig-leaf for the regime. Here, we present a short, but concentrated overview of the nation’s woes. [CLICK FOR PDF: 19-08-19 Cracked China]

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CHART PACK: Why the Fed will cut – and why it shouldn’t

Charts prepared just ahead of the June FOMC, then a detailed synopsis of the economic and financial conditions informing the July decision, prepared for TV appearances on CNBC Europe’s Squawk Box and IG-TV’s Jeremy Naylor show  [CLICK HERE FOR PDF: 19-08-20 FOMC June & July]

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PODCAST “Beguiled by their Own Augury”

When Fed Chairman Jay Powell cleared his throat to speak at the Council for Foreign Relations late in June, the air was one of rapt attention, fully in keeping with that remarkable feature of the Modern Age, the heed we pay to the pronouncements of men such as he.

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PODCAST “Consuming Folly Pt II”

This concludes our rehabilitation of Say’s Law with a summary of the principal Austrian School arguments against that form of capital consumption which comes about when artificially cheap and too-easily monetized credit promotes increased consumption at the same time that it is fostering an outbreak of that ‘Destructve Creation’  we call ‘malinvestment’.  

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PODCAST “Consuming Folly Pt I”

Here I have considered in much more detail whether there is such a thing as a ‘Consumer’ in isolation? I ask if a person’s role as producer is not more important. I look at the part played by interest rates, capital, and entrepreneurs, as well as by the state. I argue that worship of that False God – the ‘Consumer’ – not only slows economic progress in general and encourages heavy-handed and often harmful policies of intervention but also that it leads directly to the wastefulness of Boom and Bust.

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PODCAST “Duck Hunting”

I’ve entitled this episode of Cantillon Effects, ‘Duck Hunting’, not because I have any sudden urge to blast waterfowl out of the sky, but because a number of economic canards clearly need shooting down before they can find a safe place to roost in the general consciousness and there begin to breed even more confusion than already exists.

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PODCAST “The Man Who Would Be King”

With his latest sophomoric outpourings, Ray Dalio confirms our impression that here we have a man who is undoubtedly a first-class money-maker but who has recently quit that lucrative last in order to display his second-rate intellect by peddling distinctly third-hand ideas.

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PODCAST “Behind the Curve”

The phrase on everyone’s lips at the moment is ‘Yield Curve’ – largely for its supposedly unerring ability to predict a recession if not, as its most extreme devotees seem to imply, actually to cause one. But is that a valid interpretation of what is afoot in financial markets and does that jibe with how the real economy is developing?

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