Demographics is not destiny, but it can set parameters.

Japan has been in deflation for years, but a regime change in inflation finally may be emerging. We consider the implications for monetary policy, government bonds, and the yen.

In the beginning was the loan, and the loan carried interest. For at least five millennia people have been borrowing and lending at interest. The practice wasn’t always popular—in the ancient world, usury was generally viewed as exploitative, a potential path to debt bondage and slavery.

Hugh Hendry on de-dollarization

After his death, the military fought for control over the land Alexander had conquered and this, combined with the silver Alexander had brought from the Middle East, led to one of the first inflations in history.

It’s ironic that I had planned this column a couple days ago and started writing it yesterday…because the very concerns I talk about below are behind the overnight news that Fitch is lowering its long-term debt rating for US government bonds one notch to AA+. That matches S&P’s rating (Moody’s is still at Aaa).

Portfolio Managers Greg Wilensky and Jeremiah Buckley offer a framework for interpreting economic news for investment decision making.

"It is interesting to compare the performance of the German and Austrian stock markets between 1845 and 1914. Between 1845 and the 1880s, the two markets behaved similarly, in part because corporations in Austria listed on German exchanges and vice versa. The first stock to list on the Frankfurt exchange was the Austrian National Bank."

Excerpt

Anyone remember Apple's commercial of the late 1990s, ”Here's to the crazy ones”?

”Our conclusion is clear: the world was sold a bill of goods about lockdowns. Covid lockdowns represent the biggest policy mistake in modern times.”

Excerpt / Quote

BIS Working Papers No 1099

Monetary and Economic Department

Context is always a friend.

An influential book from 1895 on the social psychology of crowds, originally written in French (“Psychologie des Foules”).

Many impossible things are happening in the investment world at the moment; like the bluebottle which sits upside-down on the ceiling, we have to come to realise these things were not so impossible, after all.

Forthcoming, Review of Financial Studies

In this week's inflation roundup, #Zimbabwe is in 2nd place. On Mar 23, I accurately measured Zim's inflation at 473%/yr, almost 2x ZimStat's official inflation rate of 243.8%/yr. Phony measurements from Taguma Mahonde & ZimStat.