The shift from forty years of declining interest rates to an era of rising interest rates is just starting to play out. The effects will be dramatic. I can’t overemphasize the impact this will have on investing, the economy, and politics. Americans have taken for granted that we can borrow and spend without long term repercussions. The math is really simple. Austrian Business Cycle Theory is very clear as well. The distortions that were created by these artificially low rates need to be corrected. The market will correct them.
Jim Grant has been observing interest rates for a very long time, and is somewhat of an authority on this subject.
“If you want to go back and look at the long cycles, it might just be that the fifty odd years since the end of Bretton Woods and the end of the dollar’s convertibility to gold, that that cycle is ending. It might be that paper money in the historians’ retro perspective views will seem to have been a failure and that the world is going to charge back on unconstrained central bank credit creation and unconstrained sovereign borrowing. Maybe, that’s one way to look at it. It’s the way I tend to look at these things: longer-term, historical trends – and fifty years in the history of money is about the blink of an eye.”
About It's a Learning Problem
Welcome to my blog!
This blog is being created so that I can make my own meager contribution to the advancement of human liberty. I believe that the advancement of liberty is a learning problem and not a teaching problem. My goal is simply to learn. As I learn, I hope to share what I’ve learned with you. It is my hope that in giving, I will receive. As Leonard Read said:
“Why is this simple solution so little recognized, as if it were a secret; or so hesitatingly accepted, as if it were something unpleasant? Why do so many regard as hopeless the broadening of the single consciousness over which the individual has some control while not even questioning their ability to stretch the consciousness of others over which they have no control at all?
Most of the answers to these questions are as complex as the psychoanalysis of a dictator or the explanation of why so many people dote on playing God. Leaving these aside, because I do not know the answers, there stands out one stubborn but untenable reason: the widespread but desolating belief that the world or the nation or society could never be “saved” by the mere salvaging of private selves. People say, “There isn’t time for such a slow process,” and then, to speed things up, they promptly hurry in the wrong direction! They concentrate on the improvement of others, which is a hopeless task, and neglect the improvement of themselves, which is possible. Thus, the world or the nation or society remains unimproved.”
It's A Learning Problem 