Sublime

Follow the (Broad) Money

There are two primary ways to increase the broad money supply significantly.

The first method is that banks have to lend more, which increases the “money multiplier”, or in other words makes the broad money supply many times larger than the base money supply. Inversely, if debts are paid off, that destroys broad money.

The s

In short, continually expanded bank credit can keep the borrowers one step ahead of consumer retribution. For this, we have seen, is what the crisis and depression are: the restoration by consumers of an efficient economy, and the ending of the distortions of the boom.

Why not tell anyone who starts a business within the next three years that if he sells his business after five years, and has created some minimum number of new jobs, that he can sell his business when he wants for zero capital gains? That seems to us an incentive we can believe in.

Interestingly, the only country in the world that currently fits the bill for hyperinflation is the United Kingdom, where 100 percent of the budget deficit was monetized by the central bank. Unsurprisingly, ever since, inflation in the United Kingdom has consistently overshot the Bank of England’s own forecasts. Apparently, they don’t see a connect

The bust was staved off through a series of rapid interest rate reductions made by the US Federal Reserve; and these reductions marked the beginning of a lengthy period of ultra-easy monetary policy.

The more I think of it, especially after the passage of the One Big Beautiful Bill, it seems more clear that we could be on a path much like in the 60s and 70s. In fact, there are a lot of parallels, not a perfect match, but striking:

Fiscal Policy:

Then:

LBJ’s Great Society + Vietnam → soaring government spending and persistent deficits.

Now:

Post-COVI

You will certainly agree that such was the condition from 1929 to 1939. It was generally recognized and the government even went so far as to partially make up the spread between prices and income by direct relief—giving money away—and wages for made work—giving money away with a moralistic sugar coating. This would have been sensible had the gover

Every hyperinflation looked the same. “Hyperinflations are always caused by public budget deficits which are largely financed by money creation.” But even more interestingly, Bernholz identified the level at which hyperinflations can start. He concluded that “the figures demonstrate clearly that deficits amounting to 40 percent or more of expenditu

Locke’s political philosophy was, on the whole, adequate and useful until the industrial revolution. Since then, it has been increasingly unable to tackle the important problems. The power of property, as embodied in vast corporations, grew beyond anything imagined by Locke.