Human desires seem infinite. There is always a newer, upgraded version of the latest gadgets to pursue, reminiscent of a donkey stubbornly chasing after a tempting carrot. Some individuals display remarkable ingenuity in competing for these ever-elusive rewards.
When it comes to finances, everyone seems to yearn for a little extra, regardless of their income bracket. A middle-income individual may believe that a $10,000 salary increase would be the answer to their needs. However, once that raise arrives, they discover a pressing need for yet another $10,000. Similarly, a prosperous entrepreneur who enjoys $1 million in profits quickly thinks that $2 million would be even better.
At its core, money serves merely as a tool to fulfill one’s desires. Those desires extend beyond material possessions; they include meaningful experiences as well.
This is why time reigns supreme as the ultimate commodity. Money can always be earned back, but once time has been spent, it is lost forever.
Just ask the 16th-century Spanish explorer Juan Ponce de León. Continue reading
A win-win scenario describes a transaction where all participants gain benefits. Typically, this means both sides enjoy profits. Here’s a straightforward illustration of how it works…
Imagine an entrepreneur sketching out plans for a profitable venture, perhaps an automatic car wash. He analyzes the numbers, balances overhead against expected income, and identifies solid profit potential. Subsequently, he secures a loan from his local credit union to launch the business.
If he has a good understanding of business dynamics, this arrangement will yield positive outcomes for both him and the bank. He will cover his expenses and walk away with significant profits, while the credit union will maintain a performing loan. However, if the venture falters, the credit union faces loss, and the entrepreneur might need to seek employment until he devises a new—and hopefully more successful—business idea.
In private enterprises, win-win arrangements are the norm, promoting wealth creation. In contrast, win-win outcomes in public dealings, often influenced by political motives, are largely illusory. They tend to erode wealth instead. Continue reading
History has witnessed several significant periods of price deflation in America. The Great Depression remains memorable for many, but if we look back another century, we find an even more substantial bout of deflation.
The Panic of 1837 unfolded in the wake of an ambitious experiment in central banking. The rampant issuance of unbacked paper currency by the Second Bank of the United States spurred excessive speculation and price inflation. Much like current times, the combination of central banking, legal tender laws, fractional reserve banking, and government deficits led to an explosion in the money and credit supply, encouraging individuals to borrow for purchases they couldn’t afford and couldn’t repay.
Murray N. Rothbard thoroughly documented this extensive monetary inflation in his influential works. Continue reading
Last week, new developments emerged in the economic landscape as the Labor Department reported the addition of 163,000 jobs in July. Yet, despite this uptick, the unemployment rate edged up to 8.3 percent.
“Many people are still actively seeking work,” stated President Obama. Fortunately, he proposes solutions for those seeking employment: pizza and infrastructure.
No, this is not a joke. It was the solution he presented to residents in Ohio last week. For those skeptical, the lecture is available for viewing here.
Perhaps President Obama is onto something. Maybe pizza and roads are key to economic growth.
Nonetheless, an essential distinction should be made regarding the source of funding for purchasing the pizza and constructing the roads. Is it derived from an economy that prioritizes savings and investments in capital markets? Or is it supplied by a debt-driven government stimulus? Continue reading
This revised version enhances the readability and flow while retaining the original structure and content. A brief introduction and conclusion encapsulate the themes discussed throughout.
