Central banks have been expanding the money supply hoping to raise inflation to their arbitrary 2% target. The theory they are working from is that increasing money supply generates aggregate demand through encouraging lending and investment. The problem they face however is that money is not in short supply. Indeed there is too much money...Continue reading

The Fed and other central banks across the globe are printing more money. Even India is buying their government bonds at a sharper pace. The globe is monetising debt. That is to say, under this fiat money system, we are printing cash to spend on (currently) financial assets relative to producing assets and services. Governments...Continue reading

The majority of central banks focus on a 2% inflation target. In the developed world, we are experiencing inflation well below this level. I argue this is creating a debt spiral which is completely unnecessary if the true objective should be to increase GDP per capita and equality of income and wealth. Over the past...Continue reading

When a child misbehaves the best method is to correct their behaviour immediately, little and often. This keeps them 'honest'. Not doing so only enforces a message that misbehaviour is acceptable. Giving in to bad behaviour is even worse, it condones bad behaviour. As banks are required to hold reserves at the Fed under capital...Continue reading