The pursuit of excess often leads to a harsh awakening; discontinuing such behaviors proves to be far more challenging than initiating them. This unsettling truth lurks, waiting patiently until after one has crossed an irreversible threshold, where recovery becomes impossible.
In his 1935 publication, The General Theory of Employment, Interest and Money, John Maynard Keynes, a prominent figure in modern economic thought, penned:
“Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”
In late November 2008, then Federal Reserve Chairman Ben Bernanke executed a decisive act, perhaps without foreseeing its long-term consequences; he was, unfortunately, blinded by his own academic biases.
Bernanke, an expert on the Great Depression and a man of high academic distinction, looked back 80 years and identified parallels in the credit markets, which led him to a predetermined conclusion. Continue reading
The ongoing conflict between Russia and Ukraine has now extended beyond 90 days, with no resolution in sight.
This week, Henry Kissinger suggested at the World Economic Forum that Ukraine should concede territory to Russia, a proposal that Ukrainian President Volodymyr Zelenskyy firmly rejects. The real significance of this conflict is only just beginning to unfold.
Do you recall the reasons behind this conflict? If you do, you’re among the few.
President Biden, often at a loss for clarity, stated at the recent Quad summit in Japan that Russia’s actions in Ukraine were “unprovoked.” Once again, a grasp of historical facts is clearly not Biden’s forte.
Vladimir Putin, the aggressor in this situation, has over two decades of grievances he can cite. Declassified documents from U.S., Soviet, German, British, and French sources, published on December 12, 2017, by the National Security Archive at George Washington University, reveal that the U.S. had previously committed to not expand NATO. Continue reading
In the midst of rising consumer price inflation, an unusual phenomenon is emerging: the U.S. dollar is becoming more valuable—though not against goods and services, but rather against foreign currencies.
The U.S. dollar index, which measures the dollar’s strength against a collection of foreign currencies, has recently surpassed the 105 mark, its highest level since December 2002. This is remarkable, especially considering the turmoil in tech stocks during that time.
Indeed, the dollar has performed impressively. It saw an increase of over 6 percent in 2021 and has continued to rise by more than 7 percent in 2022 thus far. Despite the ongoing risks associated with dollar weaponization policies, the dollar maintains its status as the world’s primary reserve currency.
Just this week, however, the dollar index dipped slightly, closing at 102.91 on May 19. Is this the peak for the dollar, or merely a temporary pause before another surge? Continue reading
“I can calculate the motion of heavenly bodies, but not the madness of people.”
Sir Isaac Newton uttered this remark in 1720 after suffering substantial losses—£20,000—while speculating on South Sea Company shares, a large sum at the time.
The irrationality of human behavior, as Newton discovered, is impossible to quantify. It often runs counter to logic, driven by emotions and best observed from a distance.
Though a brilliant mathematician and physicist, Newton, like the rest of humanity, was not immune to the influences of fear and greed when it came to financial matters.
While the irrationality of crowds may not be directly calculable, it can certainly be measured and observed—especially when reviewing stock price charts in hindsight.
The South Sea Bubble of 1720 serves as a prime example of a government-induced financial crisis, where Parliament granted the South Sea Company a monopoly over New World trade in exchange for financing national debt at advantageous interest rates. Continue reading
