Home » Money (Page 79)

Category Archives: Money

Economics and commerce, all built from scratch.

Gets Warmer From Here

Posted on by | 8 Comments

The Superbowl is behind us, as are the depths of Winter.  In many ways the year really starts now that January is behind us and the plans for the year are set.  As we have come to expect since the real depth of the latest downturn, January 2010, there is good news always tempered with not so great news.

Jobs are growing, yes, but the shock was the downturn in GDP growth in 4Q12 – a 0.1% annualized loss.  Most analysts who didn’t see this coming (your humble writer included) expect this was due to uncertainty in Washington, a result that sounds like a cheap excuse.  But it’s all we have given that there really is no reason to expect that things are continuing to slowly, ever so slowly, improve.

Continue reading →

Money is a Tool

Posted on by | 11 Comments

What is money?  Your answer may depend a lot on how much of it you have.  Ultimately, the main purpose of money is convenience.  A system of barter works pretty well when two people have things each other need – someone with chickens meets up with someone else who recently slaughtered their pig and both have bacon and eggs.  But if you can also exchange those eggs for money you can save it up to buy something different or bigger.

As we’ve concluded before, Adam Smith was right – money is a matter of belief.  Whether it’s gold, Euros, or Canadian Tire Money it’s worth whatever you believe it is worth.  Our own US Dollar is backed by the “Full faith and credit of the US Government”, which is scary if you think about it.

But money is more than convenience and faith – it’s what it takes to make things happen.  And that’s worth thinking about some more.

Continue reading →

It Works Out – Because of the Bad Stuff

Posted on by | 9 Comments

Over the past year, we’ve been discussing how the current depression might end.  Two distinct scenarios have emerged as the likely candidates – a slow return to work for everyone as small companies complete a transition to a new economy and a collapse of the world’s economic system.  Which will it be?

There is plenty of evidence for both.  The decline in people of working age in the developed world (and soon the developing!) points to more opportunity and higher wages once everything evens out – something like a golden age.  But the recent World Economic Forum and ongoing trauma in Europe highlight the obvious weakness at the top, starting with leadership.

The best answer for crystal ball readers is an obvious one – both might happen simultaneously.  That’s not a punt, it’s a statement of deep belief that, in the long run, the Free Market is probably going to work.

Continue reading →

Skiing the Tough Slopes

Posted on by | 15 Comments

What’s the state of the world’s economy and financial system?  The annual gathering of the world’s leaders in the field at the World Economic Forum at the posh ski resort of Davos, Switzerland, painted a very nasty picture.  The financial world is crumbling, unfair, and full of unacceptable risk.

One of the great questions through this stage of the depression is how alarmed the great thinkers are about the current situation.  Make no mistake – this conference was sobering at best, terrifying at worst.  It you’re looking for good news, take comfort in the fact that the world’s leaders have clearly sounded the alarm bells.

Continue reading →

Growth? Hai Domo!

Posted on by | 15 Comments

Are you ready for the next Ronald Reagan?  Not here, in Japan.  The new Prime Minister, Shinzo Abe, has been in office for less than a month and is already making a lot of waves with a bold new vision – spending  whatever it takes and a strong dose of saber-rattling nationalism.  It’s the latest – or really the first – plan to get Japan out of the two decade long doldrums and back onto the world stage.  Will it work?

Continue reading →