Who’s Your Piggy?

I was looking for a chart of private debt by year for the USA. (Why? Watching The Flaw on Link TV they had it, and I think there is something important in what it says…)

But I haven’t found that chart yet. (Though I only looked for a little while).

Instead, I found one that illustrates another rather important part of the Global Economic Problem:

Countries  Percentage Debt

Countries Percentage Debt

From this original article.

There are a couple of interesting things that can be seen in this chart. The most striking, in my opinion, is that long top bar of Japan. Haven’t heard about Japan as part of the “Debt Crisis”, have you?

Scan on down to Ireland and it has a longer bar, in total, but the blue part at the start of the line, that government part, is smaller. Much smaller. In fact, most of the debt for Ireland comes from the Financial Institutions and Non-Financial Businesses. Typically ‘leverage’ to make money via business is given more ‘slack’ than government debt. Government debt is typically used for consumption (and a lot is wasted or redirected to private pockets…) while private business debt is typically expected to earn more than it costs.

So why is Ireland one of the PIIGS? Largely due to two causes. First, and most obvious, is that when the “Sub-Prime” mortgages-on-nearly-nothing-down bubble collapsed, that “Financial Institutions” part became a threat and burden rather than a profit maker. While the private sector Household debt is also high (too high) and tends to exacerbate the risk to financial institutions, I think that isn’t the biggest “2nd Factor”. Japan has their own currency. They can just print more via an easy money policy to keep interest rates down. Ireland does not.

So for Ireland, as with Portugal, Italy, Spain, and even Greece, their real problem; THE thing that prevents them from managing their debt, is there membership in the Euro Zone. Ireland was able to “clean up” their Financial institutions, so are somewhat off the chopping block with the EU. For the rest of the PIIGS, they have a relatively high public sector debt. More than the UK (though not exceptionally more) yet far less than Japan. The UK and Japan are not seen as major “problems” despite both having total debt bars (as percentage) larger than anyone but Ireland. But both have their own Central Bank and their own currency.

You could argue the case that Greece, with such a small Financial sector debt and with very low non-financial zone debt, is likely “under invested” in productive capacity. That the Public Sector is overwhelming the Private Sector. (The classic Socialism Death Spiral). There’s much to be said for that. Yet it’s pretty clear that, as debt levels go, Japan makes them look irrelevant. Both in percentage levels as shown here, and certainly in absolute levels where the Japanese Yen is a large international currency.

Oddly, on this chart, the USA is hard to distinguish from Germany. That great bastion of Fiscal Responsibility and source of Slush Fund Money in the EU. Spain and Portugal, as well, are completely nondescript. France is in about the same, or worse shape, on the basis of this data.

My Conclusions?

It is always risky to use one chart, one axis through a single data set, to reach any large conclusions. A whole lot of other things really ought to be looked at. Things like “What is the instantaneous national income?” and “What is the return on capital stock?” Basically, “Is the economy making money and productive?”. Clearly part of the problem with Ireland is that their emphasis on a Financial Industry put them in a big bind when Finance became a dirty word and income to service their debt became an issue. Also, similarly, Greece looks to have too little productive investment to support their public sector. Yet that still leaves France vs Spain and Germany vs The USA as curious examples.

While it’s a ‘bit of a leap’, I think there are two conclusions that can be (tentatively) drawn from this chart.

1) There are a lot more countries with lousy debt postures than just the PIIGS and the global economy is really sick.

2) It’s Good To Own The Bank! Japan, UK, USA… we all have our own currencies. The Central Bank can buy up all the government debt possible and float more currency. There’s never a need to default, and you can set the interest rates nice and low, if desired, to keep debt service costs at any desired level. (Yes, there are other consequences… just not debt service and ability to fund issuance of more debt.) In the EU, someone controls the bank and someone else wants the money. That doesn’t work so well. I would suggest that internal EU political dynamics are more important to the PIIGS crisis than any actual monetary / economic / national debt issues. France and Germany run the EU. Gee, isn’t it amazing that THEY are not among the PIIGS?…

Unlimited Easing

So why am I not all warm and fuzzy about just letting that central bank game play out? Have the PIIGS get their own currencies so they can have the same virtues as the UK, USA, and Japan?

Because I’ve got this creepy feeling that it’s just an extension of time on life support, not a cure.

In just the last few weeks, we’ve had statements from all of them that we’re going to have a lot, and I do mean A LOT, of “quantitative easing”. Japan has been in a stagnant economic state for what, 20 years now? 30? Between 0% and 0.5% interest rates. Lots of “easy money”. Yet they still stagnate. “Easing” has NOT ‘stimulated growth’.

Basically, the real physical economy and ‘facts on the ground’ trump money games.

So now we have the EU, UK, Japan and the USA all taking actions for yet more easy money and Quantitative Easing. Given the Japan precedent , why would we ever expect this to work? It looks to me like we will all just become Japan (those of us with some real productivity) or Argentina (for those without).

Overall, the impression I get is that there are Money Games being played. Either from a sincere belief it will fix things it does not fix, or “for effect” in that someone makes money on this, even if it doesn’t work.

My conflict here is that there’s a lot of “Consensus Economics” that says easing stimulates economic expansion. Yet my core beliefs are that the real economy trumps that in the long run; and we have the Japan experience… If it was as easy as “just set rates low and let The Fed buy bonds” to get economic growth, then any country in the world could have massive growth overnight. Just issue bonds and go…

So, with no more than that as basis (and it is way too little basis) I have this strong suspicion that the new round of “Easing Everywhere Easing For All” is not going to work. That, on a global basis, we’re going to be more like Argentina than Japan, but neither one is a very good model.

We could add another layer to this. Private income rates, and disparities. (The thesis of “The Flaw” and based in part on the Marxist doctrine of the fundamental contradiction of capital; that wealth disparity rises until the poor can’t consume, then the system collapses into the People’s Revolution.) We could ask: “Are we just running out of people with enough money to consume goods?” leading to stagnation of economies. It’s clear that there is a large FUTURE planned expenditures way in excess of the income to support that expenditure.

Those unfunded pensions, unfunded government obligations. We are expecting to consume far more than our income supports. It’s also clear that at present the lower and middle classes are NOT able to buy more (and stimulate the real economy with actual growth producing demand). We’ve been busy supporting our current livestyles on the credit card, then on the home mortgage cash out, and now moving on to a ‘third party via the government’. But that game is reaching an end. The credit cards are full, the house is ‘under water’, and the government is already “levered up” (see chart above…)

So WAS Marx right? Are we reaching that end point of the “contradiction of capital”? Is this what it looks like? Or do we just have a Ship Of State run by a ship of fools, doing Keynesian Easing for way longer than he said it would work (during a crash, not during a recovery) and making non-financial rules that are so stifling that it kills the real economy?

My emotional reaction is that it’s the latter. We’re just strangling the private enterprise system in an effort to turn it into Socialism Lite. Central Planning via massive “Thou Shalt NOT!” regulatory sets that must be massive to define what one thing you are allowed to do by declaring all the others off limits. A “self fulfilling prophecy” by the Progressives / Socialists as they “transform” Government and the economy to their ends.

Yet can it really be that way, given that the same end game seems to be unfolding from Japan, through the EU, to the USA? While I hate to think it, to accept it, I have to allow that it might be possible that Marx had a point. That “graph I can’t find” shows a rise of the percentage of income by the top 1% of the population. It has a strong peak at about 25% just before The Great Depression. Then a drop and it hangs out near 10% through most of the “Glory Years” of the USA, and starts rising again in the late ’70s – 80s and is now back at 25-30%. So if you have 1/3 going to The Rich and another 1/3 going to total government, it doesn’t leave a whole lot to run the economy…

So I’d add Smith’s Corollary to Marx on Capital: BOTH the rich capitalists AND the Government contribute to a crisis of capital by taking large shares, to the point where the economy slows, eventually to stagnate, or decay into revolution.

This captures reality a bit better than Marx, IMHO. Does it really matter if I can’t start my new, novel, Widget Company due to The Rich Evil Bastard owning the bank and the competition and not letting me have room to breath; or if I can’t because the Government Evil Bastard makes regulations that block my ability to breath; or if between them they both just suck up all the money to the point where my customer just can’t buy one anyway and I can’t get money to build a factory?

To my way of thinking, it doesn’t really matter if it’s an EU Regulatory Burden, a Japanese Keiretsu, or a USA Capitalist Monopoly Pig that squashed me and my potential customers. I’m squashed in any case.

What was relatively unique about the big growth times was the lack of large Evil Bastards sucking the air out of the room. Not too big a share to the rich, not too big a share to Government, not too much regulation. In Japan, the Keiretsu system let things be large enough to compete on the global scale, so they grew fast for a while; but the end game is no room for the new kids and new ideas. An ossification once they’ve occupied the space. Similarly, the EU is ossifying under regulations to strangle a moose. The USA is having a “two way” with 2/3 (or more) of the “pie” being split between Government and The Rich, leaving little for everyone else. Basically, the problem is DIS-economies of scale writ large and “Monopoly Power” in organizations. It doesn’t matter if the TooBig Fat Evil Bastard is a Capitalist Pig, a Japanese Keiretsu, or a Socialist Commissar; or even just a fat Ministry Of Central Services. They ALL squash and suppress the emergent behaviour of the “Self Organizing System” of entrepreneurship. Of small business.

And no amount of Quantitative Easing can fix that.

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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31 Responses to Who’s Your Piggy?

  1. philjourdan says:

    QE fixes nothing. It only masks the real problems – for a short time.

  2. DirkH says:

    “So WAS Marx right? Are we reaching that end point of the “contradiction of capital”? Is this what it looks like?”

    Marx had two different but equally wrong ideas about why capitalism would end:
    a) Competition drives profits to zero so capitalism can’t work. (He forgot that new products and production processes are developed all of the time.)
    b) After capitalism has reached absolute control over everything, worker exploitation becomes so hard that a mass uprising takes place. (He didn’t foresee mass unemployment, or the fact that competition drives prices for goods so low that everyone can afford a decent lifestyle)

    Don’t you ever come to me with “Was Marx right”. He built his entire work on the mistake that the value of a good is equal to the amount of labor used for the production – hadn’t heard of marginal use value.

    Another funny thing: According to Marx, the revolution erects the socialist state that owns all productive means.

    Later, communism comes into being – a state is no more needed, nor any ownership of anything by anyone. He never explains how the socialist state magically dissolves… I guess from boredom.

    He was a hack.

  3. DirkH says:

    A remark about the similarity of Germany and the USA in the chart: The chart does not show the velocity. The US deficit is 7% of GDP a year so that’s how fast the debt grows. German deficit is close to zero (we might lose some money if a Euro state defaults, though).

    And the German Bundesbank has more than 660 bn EUR good in the Target2 system (when a central bank of a Euro country needs to borrow money from the ECB, the other nations basically lend it). Don’t know how the Target2 imbalance is represented in the chart.

  4. E.M.Smith says:


    Never heard of a “Rhetorical Device”, eh? ;-)

    It’s important when looking at things to look at them in all lights, even the ugly black light ones… sometime you see things not otherwise seen…

    FWIW, my “complaints” about Marx roughly parallel yours, but have even more range. There’s a whole lot of things he “got wrong”… Mostly on the “how to fix it” and “outcomes” side, IMHO.

    However, I think he has a grain of truth in the idea that too much concentrated power is a problem AND that power tends to concentrate. ( So we need anti-Trust and anti-Monopoly laws; something else I think he didn’t anticipate…) But where he, IMHO, went severely off the rails was in his solution to too much capitalist concentration of wealth and power… to hand all the wealth and power over to ONE State Monopoly. Just daft on the face of it…

    (How do you fix too much concentrated power with more concentration of power?… Another rhetorical question…)


    I think QE can do one thing that is a ‘fix’ of sorts. When you are in a monetary compression, the injection of more money can stop that phase. Basically, when the velocity of money is headed way low due to The Folks having an Oh Shit! moment, it can prop up the velocity of money. Folks want to pull money out of the banks in a ‘run on the banks’? No problem, flush them with cash… However, when there are structural reasons for a lower velocity of money (i.e. I’m not making any so how can I spend it?) then QE does nothing good. Putting more money in bank vaults that still doesn’t get into my hands doesn’t do anything, really. Loaning cheaper money to a company that isn’t selling more widgets is not going to get them building another widget factory nor hiring more people.

    IMHO, it’s that distinction that is lost on our “Rulers” in D.C., Brussels, Tokyo, London, et. al.

    Keynsian QE works DURING a velocity of money crisis (that is very short lived, BTW) but not for structural or non-velocity problems. Governments keep trying to use monetary policy to fix fiscal problems. It can’t.

  5. crosspatch says:

    The Japanese threw out their progressives bigtime in elections yesterday. The Democratic Party of Japan lost 80% of their seats in the Japanese legislature. The Liberal Democratic Party (think classical liberal, like the “liberal” party of Australia) has been swept into power in a big way and campaigned on addressing the debt and economics issues. They also campaigned on ramping up the nuclear power production.

  6. DirkH says:

    BTW I found the full original “Flaw” Greenspan answer to Waxman:

  7. DirkH says:

    crosspatch says:
    17 December 2012 at 11:59 pm
    “The Liberal Democratic Party (think classical liberal, like the “liberal” party of Australia) has been swept into power in a big way and campaigned on addressing the debt and economics issues.”

    …promising stimulus (let me guess, QE) and infrastructure building…. (They’ve been building infrastructure since 1991 to stimulate the economy…)

  8. Richard Hill says:

    EM: you say “but the end game is no room for the new kids and new ideas. ” the deep problem is demographics. There arent enough new kids and new ideas these days. Isnt Greece at 1.2 babies per woman? USA at 1.9. The “social contract” is a ponzi scheme with fewer new players.

  9. adolfogiurfa says:

    Circulation of real goods and real money, representing those goods, makes the economy going. If instead of real goods circulates by far more papers representing virtual goods and, instead of real money circulates faked currency.
    The obvious solution, when an economic system collapses, is when people (once again) goes to trade real goods and services of their own. It has happened before and, hopefully, it will happen again: That´s what the people of Spain, Greece, etc. have to do, and not to wait for the next faked government check.

  10. crosspatch says:

    They’ve been building infrastructure since 1991 to stimulate the economy

    What they need to do is stimulate either immigration (which goes against their culture) or provide some massive incentive for having children. Their primary problem at the moment is their inverted population pyramid. Adult diaper sales now exceed baby diaper sales in Japan. They don’t have enough young people. Many of the country towns and villages are nearly entirely populated with pensioners. It is currently estimated that by 2060, 40% of the population will be over 65 years old with a population down to 85 million and that is unsustainable. Current pension logic came about when life spans were much shorter. In 2010 the fertility rate was down to 1.39. They need to get that up at least to 2.1 if they are going to support that number of old people.

  11. John F. Hultquist says:

    “Greece looks to have too little productive investment to support their public sector.”

    Last year I read an article about the problems in Greece. I recall the theme being about the large government ownership of what should be productive things – land, buildings, activities. This is the end-state of things like the U.S. Postal Service or something similar that doesn’t pay its own way. Or there is the other model like the nationalized petroleum industry of Venezuela that provides substantial funding for the government’s social and political projects. This leads to a lack of reinvestment in the industry. In the article about Greece there were buildings – state owned – going unused because no one had an incentive to use them. Further, if someone had and idea for a use, there was almost no way to work through the layers of government to get control of the land or space. I looked for, but could not find a Greek industry, such as Venezuela’s PDVSA, that can provide the level of funds the government needs. I don’t remember much more except to think that things would never get better. It appears that Germany, for now, keeps the place alive.

  12. nickleaton says:

    You figure for the UK debt is a work of fantasy.

    http://www.ons.gov.uk/ons/dcp171766_263808.pdf Page 4.

    4.7 trillion GBP hidden off the books for pensions 7.6 trillion USD.

    That’s on top of the other government debts. I make those debts around the 7 trillion mark, tax revenues of 0.55 trillion and a 0.73 trillion spending habit.

    14 times geared. You can’t inflate your way out, because the vast majority of those debts are linked to inflation.

    Most of Europe is in a far worse position. They are running even more generous pensions. France is the interesting one to watch. Like the UK, that will end up in violence.

  13. nickleaton says:

    John, on Greece.

    Politicians claim that Greece is a mess because Greeks aren’t paying taxes.

    However, its the other way round. Politicians in Greece are fraudsters, and now most of the taxes are going on debt payments not services. Only an idiot would pay taxes to fraudsters for nothing back.

  14. nickleaton says:

    They need to get that up at least to 2.1 if they are going to support that number of old people.


    That doesn’t work. The problem is that the states have taken money and spent it.

    I did the calculations for the UK. Median wage is 26K a year. If people had been allowed to put the NI (national insurance – social security) contributions into the risky FTSE, they would have had a fund of 550,000 GBP. Instead they get a state pension costing 130,000. 420,000 pounds looted from someone earning 26,000 a year

    You can’t get a better standard of life when your earnings are distributed to that extent. However, if you are allowed to invest, earn capital gains and compound interest, you can be better off.

    That’s the problem in the UK and most of Europe. The state has robbed people blind, and now can’t afford to pay what they promised.

  15. nickleaton says:

    Another interesting point about the UK.

    Quantative easing. 375 bn in total

    345 bn spent on Gilts. The government lending to the government.

    Deficit over the same period?

    About 350 bn.

    No one is lending to the UK government, unless forced.

    Think that through. The only way they can stay afloat is financial trickery.

  16. DirkH says:

    nickleaton says:
    18 December 2012 at 9:18 am
    “Another interesting point about the UK.
    Quantative easing. 375 bn in total”

    Yes they had a lot of QE but it looks like they are currently generating only little new money.

    Current TMS2 for USA, Eurozone, Japan, UK: DEC12

    If they can maintain that, this just means that the expansionary phase devaluated old money and old debt, and they continue on a new valuation level. Of course theoretically they could try to bring TMS2 down again but I don’t think any politician has an interest in that.

  17. nickleaton says:

    Of course. Its just gone in spending, not in upping the balance sheets of banks. At the same time they are tightening up on capital requirements. So lending will come down.

    You’ve also going to have a slow move to models like peer to peer lending and peer to peer funding (eg Kickstarter).

    Peer to peer funding has no problems.

    Peer to peer lending however will contract the money supply.

  18. DirkH says:

    Don’t confuse GDP and money supply. Spending a Dollar doesn’t change the money supply – the Dollar is just owned by somebody else.

  19. philjourdan says:

    @E.M.Smith says: 17 December 2012 at 11:16 pm

    You say Tomahtoe, I say Tomayto. What you are saying about the short term Keynsian QE (and I will not debate the Keynsian part) is simply a bridge loan. Not a mass infusion of new money. In order to work, and work correctly, yes, it is infused to maintain the velocity, but then is withdrawn to maintain the low inflation rate. Of course the latter is not done immediately, but no loan is meant to be paid back immediately, but over time, as the health improves.

    This QE is not that. It is simply the helicopter analogy. And that was my point (albeit said in too few words).

  20. nickleaton says:

    In order to work, and work correctly, yes, it is infused to maintain the velocity, but then is withdrawn to maintain the low inflation rate.


    How’s that going to work when the real issue is a spending habit worse than the most prolific coke snorter?

    If we take the UK, because I’ve the numbers. Tax revenues 550 bn. Spending 730 bn. 30% Overspend, or Keynsian stimulus. What’s the effect? Nothing. Flat lining. The reason is that the money isn’t going on projects, its just going on spending. They are even spending people’s pension money, and have a hidden off the books debt of 4,700 bn.

    My view its the Ponzi nature of state pensions sets up that are to blame. They are incredibly poor value, in the UK paying 20% of the value of contributions for a median wage earner. The reason is the rest has been redistributed. There is no investment involved.

    Now it it were invested, think what they would do? Massive benefits.

    So what are they going to do? The Spanish route is being advocated. Windmills, high speed rail and lots of new houses. Spain is booming right? Isn’t it? Er…..

  21. philjourdan says:

    Nickleaton – It will not work, and that is my point. QE is not meant to help with a government spending problem (unless you love inflation, which I guess is helping to some degree). The Bridge loan I talked about (the Keynsian QE that EM described) is meant to maintain bank reserves in a time of crises (a run on the banks) so they can continue to function. It does nothing for government spending. That is a problem in itself. Keynes was talking about ramping up government spending in the short term to help with the velocity of money. But when you run constant deficits, then you have already destroyed the Keynes model, so running more deficits is not going to help. Keynes was looking at the money supply, not who was goosing it necessarily.

    As the saying goes “in days of old….” the tender was US Notes, not Fed Notes, so he was looking at the government maintaining the bank reserves, not the Fed. While I do not necessarily agree with him, I see the confusion today. We use Fed Notes, and the fed is merely the slush fund of the government. So whether the reserves come from your left pocket or your right, the intent is to bolster bank reserves. He saw the government doing it since that had been who had all the money in the past. Today, they still do it in a way, but they launder the money. They deficit spend, and then the Fed buys the paper, thus infusing new money into the system. But while a cup of water to a man in the desert is life saving, a flood is deadly. The Fed is flooding.

  22. nickleaton says:

    Well in the UK, QE has been used for government funding.

    The question of liquidity funding is different. Lots was supplied, and most of it has been paid back. It was at penal rates of interest, and the government just booked 35 bn as a profit.

    In the UK, they are separate things.

    I don’t object to the liquidity funding. I think that’s quite sensible to avoid systemic risk, once the circumstances had arisen.

    So don’t confuse QE – funding government spending – with liquidity loans – at least as far as the UK goes.

    So why should a 30% overspend (Keynisan stimulus) have no effect?

  23. philjourdan says:

    In the US it is supposed to be different as well. However, laws are meant to be broken by governments. What the government says and what is does are 2 completely different things.

    There is no “law of liquidity” in the US. So they can say they are doing anything they want. Reality is what they actually do which has nothing to do with either stated intents or goals.

  24. crosspatch says:

    I was reading an article about Spain yesterday and about how people aren’t getting paid or getting paid only sporadically. One thing I would do if I were Greece or Spain is to roll back many of the EU regulations that are strangling my economy. 1: eliminate minimum wage laws. If you aren’t getting paid half the time anyway, then what good are the wage laws in the first place? 2. Suspend energy taxes and transport regulations that make it expensive to move goods. Spain is shutting down a nuclear power plant early that was slated to operate until next year because the savings in a new energy tax will be greater than the profit on the power it generates. If the EU doesn’t like it, tell them to stick their regulations where the sun don’t shine and for the EU Parliament to send its army to enforce the regulations if it so desires.

    If Spain or Greece were to create a situation with inexpensive labor and cheap, abundant energy, business would flock to those countries. As employment ramped up, wages would rise as business competes for labor. That is the only way out of this mess.

  25. DirkH says:

    crosspatch says:
    18 December 2012 at 5:10 pm
    “1: eliminate minimum wage laws. ”

    The EU has no minimum wage regulations.

    “2. Suspend energy taxes and transport regulations that make it expensive to move goods.”

    The EU doesn’t mandate that either.

    There are two different things the EU targets:
    a) Reducing CO2 emissions by 20% until 2020; doing the Kyoto thing. Each member state had to decide about how to achieve that.

    I agree that this should be scrapped.

    b) Austerity conditions attached to credits.

    If Spain or Greece don’t like the conditions, then they can’t have the money. But that would force them to fire bureaucrats. A statist would rather eat poison than do that.

  26. crosspatch says:

    Greece’s minimum wage is €4.27 while Spain’s is €4.26 (France and Monaco have highest at 9.22, Ireland’s is pretty high at €8.65. Germany doesn’t have a minimum wage. I thought they would have had a unified minimum wage. This is part of the problem of the EU, they are still operating much like the US did under the Articles of Confederation. They pretend to have a central bank but do not have a unified monetary policy. Until they come up with one unified budget, they can’t really have a unified currency. It just won’t work.

  27. J Martin says:

    Surprising graph that. I would have liked to have seen Russia and China included. Russia, I believe, has an economy with something near to a flat tax rate, and is reducing it’s national debt at a steady rate. Don’t know anything about China, giddy growth that will run into demographic problems before long.

  28. M Simon says:

    Kondratieff Cycles.

    When iron pots cost $100 the invention of $5 iron pots drives the economy.

    When Computers cost $million the invention of the $1000 microchip drives the economy.

    When a KWh costs $10,000 (batteries) the invention of the electrical grid ($1 a KWh) drives the economy.

    We are right now out of such disparities on a large enough scale to drive the economy. There are several headed our way (graphene?). None here yet in large scale.

    Let me add the above numbers are generalizations and illustrations. They are probably not the correct numbers.

  29. DirkH says:

    M Simon says:
    27 December 2012 at 8:12 am
    “Kondratieff Cycles.”

    A Soviet attempt at explaining business cycles. I prefer Hayek’s explanation – that a centrally set interest rate distorts the cost of money and has malinvestment as consequence.

    See here if you have an hour to spare
    MeltDown Tom Woods 1h JUN 2009

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