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Pragmatic Capitalism

Practical Views on Money & Finance

‘Special Reports’

A LOOK INSIDE THE FED’S LIMITED TOOLKIT

By now, we all know that QE2 wasn’t all that effective in helping the economy.   And after extraordinary measures, ZIRP, bank bailouts, endless loans, etc, some are saying that the Fed is completely out of bullets.  Still, like a group of masochists, we are looking to Jackson Hole and Bernanke’s speech to shed some… Read More

THE INNOVATION INITIATIVE

Let’s leverage our greatest resources and understanding of the monetary system in an effort to unleash a whirlwind of innovation of the likes that mankind has never witnessed before.

QUANTITATIVE EASING 3 – ANOTHER MONETARY NON-EVENT?

* This post was written in 2011 before Mr. Roche founded Monetary Realism, which was formed due to several disagreements Mr. Roche and many other former MMT proponents had with the school of thought.  For more info on the difference in views please see here.  For more on MR’s views please see here. Yesterday’s stock surge off… Read More

WHY WE BELIEVE WE ARE IN A SECULAR BEAR MARKET

Looking back at the long history of the U.S. stock market it is clear that there are long periods when the trend is distinctly up or down. We call these long trend “secular” markets as opposed to the commonly-known cyclical market trends that last about four years on average. In our view we are currently in a secular bear market that began when the market peaked over 11 years ago in early 2000.

THE BALANCE SHEET RECESSION CONTINUES

This may very well be the most important data point that we are currently receiving every quarter.  Yesterday’s Z1 released by the Federal Reserve showed a continuing decline in household credit.   The latest reading showed a -2% decline in total household debt growth versus last year.  The Fed summarized the data: “Household debt declined… Read More

DOW 20,000? NOT ANYTIME SOON

This past week, as I watched our recent predictions about economic weakness and a market correction
unfold in front of me, I ran across the James Altucher article entitled “Next Stop: Dow 20,000 –10 reasons why the market will soar.” I am always intrigued by the never ending optimism that abounds in most market journalists but James Altucher is no slouch so it really got my attention.

CREATIVE DESTRUCTION AND FINANCE

Joseph Schumpeter is famous for coining the phrase “creative destruction”.  He described it as a  “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”  This is a necessary component of capitalism.  The strong survive and the weak die. A new paper out… Read More

BUFFETT’S “SILLY TALK” ABOUT THE U.S. DEBT

* This post was written in 2011 before Mr. Roche founded Monetary Realism, a post-MMT school that was formed due to several disagreements Mr. Roche and many other former MMT proponents had with the school of thought.  For more info on the difference in views please see here.  For more on MR’s views please see here. Some… Read More