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by
Chris Martenson
Executive Summary
- The case of the missing credit impulse
- The credit impulse is the worst its been in recent history
- How the situation is deteriorating fast
- Why a credit impulse-driven recession is nigh
If you have not yet read Part 1: The Pin To Pop This Mother Of All Bubbles? available free to all readers, please click here to read it first.
The Case Of The Missing Credit Impulse
An enormous oversight of nearly every major economist is the role of debt in both fostering current growth but also stealing from future growth.
It seems like such a simple concept, and it’s one I covered in great detail back in 2008 in the original Crash Course, but it remains a mysterious oversight of most here in 2017. The concept is easy enough; if I borrow money to increase my spending here today, it probably makes sense to take note of that if you're an economist responsible for tracking spending.
My debt-funded spending today is my lack of spending in the future when I pay down the debt.
Professor Steve Keen has this topic nailed beautifully. In it, he explains how even simply keeping a massive pile of previously accumulated debt at the same level as last year is a net negative on economic growth. A very simple and a very profound concept that still is not a part of conventional thinking.
Now here where things get interesting. And frightening. If we look at…
Everything You Need To Know About The Credit Impulse
PREVIEW by Chris MartensonExecutive Summary
- The case of the missing credit impulse
- The credit impulse is the worst its been in recent history
- How the situation is deteriorating fast
- Why a credit impulse-driven recession is nigh
If you have not yet read Part 1: The Pin To Pop This Mother Of All Bubbles? available free to all readers, please click here to read it first.
The Case Of The Missing Credit Impulse
An enormous oversight of nearly every major economist is the role of debt in both fostering current growth but also stealing from future growth.
It seems like such a simple concept, and it’s one I covered in great detail back in 2008 in the original Crash Course, but it remains a mysterious oversight of most here in 2017. The concept is easy enough; if I borrow money to increase my spending here today, it probably makes sense to take note of that if you're an economist responsible for tracking spending.
My debt-funded spending today is my lack of spending in the future when I pay down the debt.
Professor Steve Keen has this topic nailed beautifully. In it, he explains how even simply keeping a massive pile of previously accumulated debt at the same level as last year is a net negative on economic growth. A very simple and a very profound concept that still is not a part of conventional thinking.
Now here where things get interesting. And frightening. If we look at…
by
charleshughsmith
Executive Summary
- Why No Nation Truly Has Full Control Over Its Currency
- Why Sovereign Efforts To Control Currencies Is Driving Capital Into Digital Currencies
- The Driver's Of Digital Currency & Value
- Calculating Bitcoin's Fair Value
If you have not yet read Part 1: Why The U.S. Dollar And Bitcoin Keep Rising available free to all readers, please click here to read it first.
In Part 1, we reviewed the dynamics of demand and utility that drive the valuation of any tradeable good, service, commodity and currency. We established that it’s impossible to understand how a fiat currency such as the U.S. dollar can retain a value above its tangible value of zero unless we accept its utility value and its non-tangible sources of value, i.e. the wealth and wealth generation of the issuing nation and state.
We now turn to the second half of the question posed in Part 1: Why isn’t the market value of a digital currency such as bitcoin zero?
Or perhaps more interestingly: How high might the price of bitcoin go?
To answer this question, we must investigate another question: Can any state control the value of its currency and its place in the global economy? I suggest the answer is no. Beneath a surface veneer of status quo continuity, nations and states are losing the ability to control their role in the global economy and thus the utility of their currency.
To understand why, we turn to socio-historian Immanuel Wallerstein.
Who Controls a Rapidly Changing World-System?
Wallerstein is recognized for advancing the concept of world-system, his term for what I call a global Mode of Production, i.e., the political, social, financial and economic system that governs the relations of power, labor, capital, trade and resources (broadly speaking, our understanding of Nature and the extraction of its resources). In a recent essay China is Confident: How Realistic?, he observed that "countries (have lost the ability) to control what happens to them in the ongoing life of the modern world-system."
These two paragraphs get to the essence of his analysis…
Estimating Bitcoin’s Fair Value
PREVIEW by charleshughsmithExecutive Summary
- Why No Nation Truly Has Full Control Over Its Currency
- Why Sovereign Efforts To Control Currencies Is Driving Capital Into Digital Currencies
- The Driver's Of Digital Currency & Value
- Calculating Bitcoin's Fair Value
If you have not yet read Part 1: Why The U.S. Dollar And Bitcoin Keep Rising available free to all readers, please click here to read it first.
In Part 1, we reviewed the dynamics of demand and utility that drive the valuation of any tradeable good, service, commodity and currency. We established that it’s impossible to understand how a fiat currency such as the U.S. dollar can retain a value above its tangible value of zero unless we accept its utility value and its non-tangible sources of value, i.e. the wealth and wealth generation of the issuing nation and state.
We now turn to the second half of the question posed in Part 1: Why isn’t the market value of a digital currency such as bitcoin zero?
Or perhaps more interestingly: How high might the price of bitcoin go?
To answer this question, we must investigate another question: Can any state control the value of its currency and its place in the global economy? I suggest the answer is no. Beneath a surface veneer of status quo continuity, nations and states are losing the ability to control their role in the global economy and thus the utility of their currency.
To understand why, we turn to socio-historian Immanuel Wallerstein.
Who Controls a Rapidly Changing World-System?
Wallerstein is recognized for advancing the concept of world-system, his term for what I call a global Mode of Production, i.e., the political, social, financial and economic system that governs the relations of power, labor, capital, trade and resources (broadly speaking, our understanding of Nature and the extraction of its resources). In a recent essay China is Confident: How Realistic?, he observed that "countries (have lost the ability) to control what happens to them in the ongoing life of the modern world-system."
These two paragraphs get to the essence of his analysis…
by
David Collum
Every year, friend-of-the-site David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. As with past years, he has graciously selected PeakProsperity.com as the site where it will be published in full. It's quite longer than our usual posts, but worth the time to read in full.
2016 Year In Review
by David CollumEvery year, friend-of-the-site David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. As with past years, he has graciously selected PeakProsperity.com as the site where it will be published in full. It's quite longer than our usual posts, but worth the time to read in full.
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