Demystifying Macroeconomic Events Is Challenging

When we take a deep dive into finance, it is like going down a rabbit hole. It is an Alice in Wonderland place where things go here and there and then twist back on themselves. This tends to all work like the edge of a cliff, or slipping into an abyss with risks increasing as we move towards the edge which in this case is a debt trap. Since everything moves along until it doesn't the risk of such an event is often discounted until it occurs.

The WTFinance videos or channel is the passion project of Anthony Fatseas. I interpret this to mean he does not pursue it to make money but because he enjoys pursuing economic and financial truth. In a recent episode of the WTFinance podcast,  Anthony had the pleasure of welcoming back Alasdair Macleod. Alasdair the Head of Research for Goldmoney.  

The reason this merits mentioning is because Mr. Macleod over many years has formed a lot of well-based views. Most sovereign fiat currencies are in a debt trap and politicians are showing little interest in reducing spending. One of his insights focuses on the idea that GDP increases based on government spending create the illusion things are better than they really are. 

       SPECULATION FUELS BUBBLES AND DEBT CREATES CRASHES 

Macleod to his credit points out that debt in the public center is the problem, Growing debt in the private sector directed to increasing production is not. Macleod is Head of Research for GoldMoney and advocates for sound money through demystifying finance and economics. For most of his career in the finance industry, he has centered much of  his efforts on demystifying macroeconomic events for his investing clients.

Mr. Macleod is convinced that the government's unsound monetary policies are a destructive weapon used against the common man and we must protect ourselves from the consequences. While Macleod has a lot of solid well-based views, I contend he may overestimate the UK and underestimate America. The UK is much farther down the path to decline. 

China is selling dollars because it needs to bring in wealth to fill in the holes being exposed as its economy continues to implode. As for the Chinese people's savings, when China's economy implodes much of its citizens' wealth is being sucked into a black hole never to be seen again. An example is, real estate investments gone bad. These investments yield no return and leave only the debt which often goes bad. In short, China has squandered much of the wealth that has flowed from America during the last two decades.

As always, in the comments section of the video, we find a few hidden gems. Such as: "This song was written and sung in the 1970s and here we are 50 years later." We tend to forget that eventually can be a very long time. This comment stands as a monument and reminder that some declines are long in the making. Another comment centered on, and used an interesting term I had not stumbled across before, it goes something like, Financial fuckery will be the death of us. This has occurred across the world and the financialization of everything is destroying the system. 

                        "We Must Always Remember It's A Relitve Game"

Yes, banking should be boring lending to real businesses that make stuff that results in true economic growth, but it has evolved into something else. True productivity has become masked by financial gimmickry, and the economy has become a fake facade, leaving rational economic watchers to question, "where's the beef?"

Across the world, a game is being played to take the wealth generated by the working classes and transfer it to governments, this is evident in soaring national deficits and debt. This is so they can continue playing the game of appropriating it to their minions. In this case, I'm using the term "minion" in reference to, or to mean those who obey or do their bidding and follow their orders. As such, governments become the "boss" with the people becoming the servants.

Deciphering the economy is not an easy task, it is cluttered with scads of variables. This is evident in the fact economists and financial pendants never reach the same conclusion as to where we are headed. A system based on currency debasement, the wealth effect, money passively invested into retirement funds, and financial engineering through stock buybacks all add to the growth of risk. Yes, eventually, the "Fed put" based on pouring the fuel of liquidity on the fire will prove problematic.

 

(Republishing this article is permitted with reference to Bruce Wilds/AdvancingTime Blog)