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Pragmatic Capitalism

Practical Views on Money & Finance

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Lessons From a(nother) Fund Collapse

I saw this story over at Josh Brown’s site about an “apple only hedge fund” that has apparently imploded.  These sorts of stories are nothing new, but it does get frustrating to see how people keep falling for these sorts of investment schemes.  And yes, they are schemes because they can’t deliver what they promise.… Read More

Is A “Great Rotation” Underway?

It’s been difficult to escape discussion about the “great rotation” in recent weeks. In case you’ve been hiding underneath a rock, the idea of the “great rotation” is that investors will rotate out of bonds and into stocks. There are three big misunderstandings being made behind this thesis:

Did Keynes Understand Endogenous Money?

One of the core understandings of MR is the endogeneity of money. Endogenous money is based on the understanding that the money supply is high powered money + broad money and that these variables are determined by the private sector’s demand for money. That is, almost all of the money in our monetary system is created… Read More

“Loans Create Deposits” – In Context

Loans create deposits. We’ve heard it many times now. But how well is it understood? The phrase is typically invoked accurately, in conjunction with a rejection of the ‘money multiplier’ fable found in economic textbooks.

Barrons Doesn’t Do Monetary Realism

Just when you think the word might be spreading….It was interesting that Barrons ran this great quote from a regular reader here at Pragcap last week:  We must be careful comparing the federal government with a household (or state or business) because Washington has no solvency constraint. The federal government can’t run out of money… Read More