Category Archives: Economics in the Age of Fiat Money

July 17, 2016

The World Is $300 Trillion In Debt

Credit growth has been the driver of economic growth for decades. That was the theme of my third book, The New Depression, and the subject of numerous Macro Watch videos since then. Up until now, my work has always focused on credit growth in the United States. In the latest Macro Watch video, uploaded today,…
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June 13, 2016

China’s Economic Crisis, Part 4: One World Is Not Enough

China’s economy is freakishly unbalanced. Investment (Gross Fixed Capital Formation) makes up 44% of China’s GDP, whereas Household Consumption makes up only 38% of GDP. For the world as a whole, Investment makes up just 24% of global GDP, while Household Consumption makes up 57%. Perhaps not since the Pharaohs built the Pyramids with slave…
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June 1, 2016

China’s Economic Crisis, Part 3: The Risks Of Chinese QE

China’s economic growth engine is fuelled by extraordinarily large amounts of credit. In 2015, it took RMB 15.4 trillion (US$2.4 trillion) of credit growth to generate RMB 4.1 trillion (US$631 billion) of economic growth. In this video, the third in a series on the economic crisis now unfolding in China, we consider how much new…
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May 15, 2016

China’s Economic Crisis: Part 2, The Colossal Boom (1990 – 2014)

Chinese Investment increased 50-fold between 1990 and 2014. Investment (i.e. Gross Fixed Capital Formation or GFCF) in China grew from US$92 billion in 1990 to US$4.6 trillion in 2014. During the last 25 years in China: The Gross Output Value of Construction increased by 134 times, growing at an average annual rate of 21%. Building…
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May 6, 2016

Macro Voices Podcast: Highly Recommended

I highly recommend you listen to this free MacroVoices podcast.  It explains the real origins of our global economic crisis.  It also describes how the crisis is likely to play out during the years ahead. Richard Duncan: What the history of monetary policy tells us about our future Erik Townsend welcomes Richard Duncan to MacroVoices….
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May 2, 2016

The China Crisis Series (Part One)

China’s economy resembles a spinning top that is running out of momentum. It is wobbling and gyrating erratically.   A stock market crash, diminishing returns on credit, a plunge in imports, capital flight and currency volatility are all signs that China’s great economic boom is now coming to an end. In all probability, this is just…
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April 25, 2016

America’s Future: When’s The Day Of Reckoning?

This interview was conducted by Andrew Mazzone, President of the Henry George School of Social Science.  Click on the link below to watch the video. Here are some of the topics we discussed: What caused the global economic crisis? Was the crisis the result of a plan or did it just happen by chance? What…
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April 18, 2016

Our Economic and Political Problems Look Set To Multiply

Seven years of weak credit growth in the US have brought the world to the brink of a deflationary global recession. As a result, political instability is increasing and geopolitical tensions are on the rise. In the new Macro Watch video, uploaded today, we first consider why the increase in debt in the United States…
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April 8, 2016

Analyzing The Central Banks: Watch Free Video

The Central Banks have become the most powerful players in the global economy in recent years. Consequently, since its launch in 2013, Macro Watch has published a series of videos that analyze central bank policy. Please find them listed below, each with a brief description. Macro Watch subscribers may find this list helpful in indentifying…
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April 1, 2016

ECB Policy: Everything You Need To Know

Do you want to understand what the European Central Bank is doing and why it is doing it? I have just uploaded two Macro Watch videos that will explain everything you need to know about the ECB. The first video describes the credit boom that caused the economic crisis in the Eurozone in the first…
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March 11, 2016

Are The Central Banks Out Of Ammunition?

Yesterday, the European Central Bank expanded its QE program by one-third and cut bank deposit rates deeper into negative territory. How did the markets react? Stock prices fell, while bond yields and the Euro rose – the exact opposite of what the ECB had expected and hoped for. Is this yet another indication that central…
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February 26, 2016

Negative Interest Rates: How Did This Happen?

Until recently, negative interest rates were considered inconceivable. Now, however, $7 trillion worth of bonds are trading at negative yields. That means the owners of those bonds are guaranteed to lose money unless interest rates plunge even further. The latest Macro Watch video, uploaded today, explains how this disaster came about. There are five reasons…
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February 13, 2016

Death Spiral? Make That Plural

Last week Citi made headlines by publishing a report claiming the global economy is trapped in a “Death Spiral”. The timing of the report was perfect. Financial markets were in full PANIC! Oil fell to $26 per barrel, 10-year US government bond yields dropped to 1.52%, the MSCI World Equity Index fell into a bear…
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February 3, 2016

Negative Liquidity Will Drive Stocks Lower

Liquidity in the United States turned negative in the fourth quarter of 2015. I believe this played an important role in the severe stock market selloff that began around that time. If so, the outlook for stocks and other asset prices is disturbing since Liquidity appears likely to remain negative FOR THE NEXT FIVE YEARS….
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January 24, 2016

How My Career Shaped My Views On The Global Economy

In the new Macro Watch video uploaded today, I describe how my 30-year career in the investment industry has shaped my views on what drives the global economy and the financial markets. There have been several important “aha” moments: Soon after I began my career in Hong Kong in 1986, I realized that ultra-low wages…
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January 3, 2016

Weak Credit Growth Signals Recession Ahead

Between 1952 and 2008, every time US credit growth (adjusted for inflation) fell below 2%, the United States went into recession. During that period, the ratio of total credit to GDP rose from 150% to 380%. In other words, credit growth drove economic growth; and when credit did not grow, neither did the economy. In…
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December 19, 2015

Rate Hike: Trouble Ahead

On December 16th, the Fed hiked interest rates for the first time in nearly 10 years. The world did not come to an end, but there is clearly trouble ahead. In the latest Macro Watch video, we take a look at what the Fed has done and the reasons they gave for doing it. We…
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December 6, 2015

American Meltdown: The Crisis Of 2008

In 2008 the American Financial System failed. In this video, uploaded today, we take a look back at the systemic meltdown of the US financial sector and at the crisis measures the government adopted to reflate the system and keep the world from collapsing into a new Great Depression. It is an absolutely incredible story….
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