Inflation Fears and a Coin Flip

Steve Waldman has a new post up on why rich people, and not so rich people, might prefer hard money over greater wealth. This post was a response to Paul Krugman, and Cullen adds some good thoughts too. Here’s Steve: ““Full employment” means ungrateful job receivers have the capacity to make demands that could blunt […]

Why Did the Natural Rate of Interest Plummet? Take 2

One of the more remarkable claims since the financial crisis of 2008 is that the natural rate of interest is now below zero, and it has been below zero since the financial crisis. If you look at the very best estimates of the natural rate of interest over the last 50 years, one broad fact […]

Cullen’s New Book

He’s been a bit modest about it, but Cullen has written a book which looks dang interesting: Pragmatic Capitalism: What Every Investor Needs to Know About Money and Finance I don’t have my copy yet, so I can’t do a full review. Cullen has run an investment advisory for the last several years, and this […]

Screen Shot 2014-06-05 at 9.53.19 AM

China Asks: How much will it cost us to make Solar Cheaper than Coal?

Do you remember when Dr. Evil was going to hold the world ransom for $1,000,000? This is what we are facing today in Solar – the Dr. Evil ultimatum. The cost to get Solar to coal parity is going to be laughably tiny. The cost sounds like a lot of money to old people, or […]

Hey Guys! Let’s Reinvent The Wheel! VA edition

GOP leaders, whistle-blower join in calls to privatize veterans’ care The idea of privatization has gained steam since allegations of a wait-list at a VA facility in Phoenix were exposed last month, but the concept has been posed for years by conservative lawmakers, including Sen. John McCain, R-Ariz., in 2008 and GOP presidential nominee Mitt […]

A tale of 2 r’s

The Piketty data problems are the huge talk right now, but I want to point out something entirely different. Brad Delong points out there are 4 different rates and Piketty does not do a great job differentiating them: The four different r’s are: The real interest rate at which metropolitan governments can borrow: call this […]

A Fiat Currency Valuation Model?

JP Koning says: “But there may be another solution to the backwards induction problem. I’m going to show that the market establishes the value of modern fiat money under a CPI standard in the exact same way that it establishes the value of a very familiar instrument; the standard corporate bond. Since corporate bonds are […]

Why are You Freaking Out Over Inflation When We Don’t have Inflation? Part II

Months ago, I (really Steve Waldman of Interfluidity) proposed a possible reason people were freaking out over inflation: The returns to cash after accounting for BOTH short term interest rates and inflation were negative for the first time in 30 years.  We were seeing actual debasement for holders of cash. However, there is another reason […]

Startups, Matt Busigin’s Unemployment, and the Low Rate Environment

Yesterday, I examined a possible reason why we are seeing fewer startups is because the return to capital is higher than growth.  Matt Busigin writes an astonishing post that examines this idea with far more rigor and  says: “This necessarily implies that, if the risk-adjusted expected return is not highest in net new investment, the business manager […]

r > g and Startup Formation

One of the broad facts which might be true in a world where r > g is there should be ever fewer new businesses started, because the returns to starting and growing a new business are less economically attractive than trying to control the rents from owning existing capital. That’s what we are seeing now: […]