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Archive for the ‘Gold’ Category

Economic Musings X: Legal Tender – Legal or Tender or What?

2010-04-16 9 comments

After World War II when the German Reichsmark was discredited and people were starving they would travel from their city to the local farms … Read more…

Economic Musings IX: We could all be millionaires …

2010-04-10 3 comments

… if we hadn’t destroyed literally trillions over the last 200 years!

Read more…

Economic Musings II: The Euro as a Basket Case

2010-02-24 8 comments

How not to Introduce a New Currency

The Euro has been touted as something of a capstone of the European Unification project. Now it may well prove its stumbling block. How ironic. And at the same time how stupid and humiliating!

How (and why) has it all happened? Read more…

Bloom of Doom IV: Safe Assets and Sore Surprises

2010-02-02 2 comments

Many still think sovereign debt is safe (although I’d like to know how many “elder statesmen” still invest in these “assets” themselves today). This is astonishing at the best of times: would you give credit to a boy who still lived at home at the age of 200+ with no income of his own? Oh, of course, I see, you hope his Mum and Dad Taxpayer will foot the bill. So if he goes to the “Royal Casino” and buys chips, looses big time, then even scraps his old, but perfectly serviceable car to get a new one, you still give him more credit and more, and more?

Read more…

Economic Fallacy I: Harmful Currency Undervaluation?

2010-01-26 3 comments

This is the first article in the “Economic Fallacies” series. An economic fallacy is a concept of economic policy or a statement of “fact” or the proposition of an economic “law” which often sound very convincing while being at least incomplete if not utterly false and thus leading to ineffective, wrong, counter-productive, in short: to mostly harmful economic policies.

One of the more dangerous concepts is the myth of the effects of currency undervaluation, i.e. currency pegs at an exchange rate that tries to keep a currency lower than an unfettered market exchange would effectuate. Read more…

Do we see a gold bubble?

In times where within less than a generation humankind has seen several asset bubbles come and go (Japan’s real estate and stock market bubbles, the tiger states, the Dotcom bubble and now housing in the US, but equally e.g. in Spain and elsewhere plus one brewing in China and maybe one again in the US) and still left standing albeit on feet of clay,  the recent rallies in gold obviously beg the question if we not only see another bubble, this time in gold. The argument seems to rest on the assumption that any price change with a certain gradient above “what feels right” must be unjustified. Read more…

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