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Pragmatic Capitalism

Practical Views on Money, Finance & Life

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What Does it Mean to be a “Modern” Monetary System?

macro

When I wrote my popular paper on the monetary system (which is now, to my shock, ranked #7 all-time on SSRN) I specifically wrote it with the “modern” monetary system in mind. But what does it mean to be a “modern” monetary system?  It’s a strange and interesting question that I always find myself pondering… Read More

Ten Attributes of Great Fundamental Investors

strategy

Fantastic note here by Michael Mauboussin of Credit Suisse. Mauboussin is the rare fundamental analyst who is both a good analyst and a good communicator. That is, he can break big complex matters down in such a way that they don’t just sound like a bunch of numbers thrown at a wall. In his latest… Read More

Do Savers Deserve a Risk Free Return?

strategy

Low interest rates have led many people to conclude that savers are being unjustly punished by a lack of interest bearing savings. In this case, we’re referring specifically to people who are trying to generate a reasonable return in a risk free or nearly risk free instrument like a Treasury Bill, CD or money market… Read More

Donald Trump is a Keynesian on Steroids

macro

Moody’s is out with a new analysis on the Clinton and Trump economic plans.¹ The short story is, Moody’s says the Clinton plan is superior to the Trump plan generating 2.6% RGDP for Clinton vs 0.6% RGPD for Trump in their first terms. But there’s a potential flaw in the Moody’s report in which they… Read More

Everyone Has a Home Bias & No One Should

strategy

Here’s an awesome chart from a recent Vanguard research piece: What this chart is showing is that every country has a home bias. So, if you’re an American investor you tend to hold mostly domestic stocks. If you’re a Japanese investor you tend to hold mostly Japanese stocks. So on and so forth. And what’s crazy… Read More

Yeah, The Fed Didn’t Cause That….

macro

There are all sorts of crazy myths surrounding central banks. Which is strange because once you understand the operational realities of the monetary system you realize that Central Banks are actually pretty boring entities who mostly serve as bank clearinghouses with far less control over the economy than some think. But that doesn’t stop people… Read More

NGDP Futures Targeting – Still Doesn’t Work….

macro

This post is pretty nerdy. If you’re a normal person you might consider skipping it…. It’s been a while since I talked about monetary policy, but the old debate about NGDP Futures Targeting kicked up again last week with a number of very smart people criticizing the mechanics of the idea. Here’s economist Noah Smith… Read More

Revisiting My “Useless” 2016 Predictions

macro

Well, 2016 is over half way in the books. And since I am a big fan of personal accountability I am going to hold myself personally accountable for my “useless” predictions for 2016. I must say, however, since they’re “useless” and forecasting is out of fashion these days (not sure how anyone can make decisions about… Read More