Memories Go Fourth

Featured Image by PublicDomainPictures on Pixabay

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A year ago, I was reminiscing… three memories: inflation, gold, and a profligate economy founded upon debt, which only sounds like an oxymoron.

… Grandpa here yet?

One more memory, along those lines. Mid ’70s, probably pre-Star Wars, probably a Saturday, and Grandpa’s over for dinner, always a minor occasion. With front-door greetings over, coats taken, dogs settled, and drinks well in hand, the family sits together around the living room, as ever talking and remembering and passing the time.

Grandpa could slice politicians like birthday sponge cake

This particular afternoon, though, the tone is vexed… that special incredulity-slash-resignation only politicians can inspire. This afternoon, the value of a dollar or, rather, value past now lost: how much a dollar no longer buys, and the daft decision-makers who don’t or won’t comprehend, much less accept, their own responsibility – not only for here-and-now but come the inevitable reckoning.


Bonus memory… remember this one? Probably from the ’90s… your RSP advisor has you signing a document that reads, Past is no indication of future performance, and while you scrawl, they finish their spiel by saying, “…but historically, the stock market has always tended to rise.” And as far as that was accurate, it was also mere dissembling unless adjusted for inflation.

As snow on the ground is not the weather, ‘rising prices’ are not inflation. As far as inflation is the issue, prices don’t actually rise; rather, the currency’s purchasing power falls, and more dollars must accumulate to buy the same item as before, which seems like prices getting higher but is not the same thing as costs that rise against sound measures.

If today’s runaway inflation has not been headed our way the past fifteen years, then how about the past fifty? A few months after I was born, the 37th US President responded to runaway inflation, which by then of course had been politicised. Two features of his new economic policy were an end to the fixed-exchange currency arrangement, in existence since 1944, which by then of course had been politicised, and a shocking yet not shocking halt to the international convertibility of currencies into US-held gold. Perhaps no shock, none of this is considered among the 37th Administration’s accomplishments, not whether you look here, here, or even here although it is briefly mentioned here.

At least grant the past two years, yet the ‘runaway’ bit, now as in the ’70s, is simply the amplified effect of machinations underway for the past 109.

M2 Money Supply still matters. Chart: https://fred.stlouisfed.org/series/M2 (although don’t bother checking on May 2–3, 2022)

Before the Federal Reserve was enacted in 1913, inflation was an expansion of the money supply – these days an increase in the supply of currency units: dollars, renminbi, rupees, whatever. An effect of inflation is a definite fall of purchasing power by dilution of currency units from having created more and more and more of them. Prices ‘rise’ driven by currency debasement, an effect of inflation where prices seem to rise because their numerical values get higher, and people might spend more for the same, or spend less and have less. Another effect is an expectation everybody gathers for prices to get higher still. Prices ‘getting higher’ vs. prices ‘rising’ is my way to distinguish between what economists say is nominal and what they say is real. Credit 20th century Fed-era economists, all tied up in knots over the determinants of demand-pull and cost-push and all manner of academic-importance speech, which I guess is the mission-creep you’d need if there were a vacuum of cultural memory that needed filling – as easy as money from thin air, or playing god with people’s lives and livelihoods, or hubris.

How little of this actually is a cultural memory anymore, much less a family one, might be telling. Something I remember my Dad used to say all the time – he said it that Saturday in the living room, and I remember my Grandpa agreed: “It isn’t that people don’t know; they simply don’t want to know.”

There’s a lot riding on partial perspectives – everything, you could say – so, what… let it ride?

Or look into things. More thoroughly, on your own terms, whether you’re curious or not. Suppose you even come to understand the world more than you thought you did, or more than you remembered.

Can you tell which one was the watchdog?

Time Well Spent

… by studying why we’ve been wrong, we can be more right.

Russell Napier

Featured Image Credit: Photo by Steve Buissinne from Pixabay

I’ve been called a cynic, which I’ve long held rather as healthy scepticism. And I’ve railed over uncertainty now and then, mostly in academics although, in fairness, never absolutely. But, all irony aside, I now defer with appreciative respect to Russell Napier, whose typically gripping understatement offers a typically brilliant case not simply for uncertainty but for its necessity.

In this video interview with the Parish Church of St. Cuthbert, Edinburgh City Centre, Napier paints a humble image of The Library of Mistakes, a repository of “the recorded uncertainty of how things work in the real world” (to quote his Keeper’s Blog on the Library website).

Napier initially co-founded the Library to register mistakes from business and finance although he mentions that the Library’s embrace has since widened to reflect more equitable representation… true enough: if there was ever a sector of sustainable growth…

On the other hand, if the Library may ever truly succeed, you expect it will need to put itself out of business – gladly, I suppose. But, as I say, all irony aside.

He devotes a good portion of his commentary here to sound money, fraudulent banking, and the consequences of ruinous ill discipline. He’s droll, simple, clear, and engrossing.

It’s not all negative, either: whether or not the flipside to every mistake is great success or mere intention – either way, hey… there’s a flipside.

And that, I suppose, is the take-away just now, for me anyway… with modest whimsy, Napier and the Library sound a call of respect for uncertainty and the untidiness that efficiency and statistics and computation are not only unwilling to consider but unable to predict or control. If the reason to embrace uncertainty is because outcomes can’t be guaranteed, what is that if not attributable to people… to our deficiency, our equivocation, our inexactitude? In a culture where metrics are religion and science invincible, truth is what can be measured, and qualitative uncertainty has been a nobly humoured side of fries.

Napier speaks here for about half an hour, ahead of a short and equally informative Q&A, and caps his remarks with a reminder that any opinion one has will utterly depend on the perspective one takes in order to have it.

As ever with Russell Napier, at least for me, the time spent feels most definitely worthwhile and insufficiently brief.

Seriously, watch this interview.

From Independent Speculator – Self-Conceding ‘Gold Bug’ Lobo Tiggre’s Monition: “Today’s Mountain of Debt is NOT like WWII’s”

“… whatever you do, don’t forget about the mountain of debt the world is taking on, encouraged by central bankers who say that money supply doesn’t matter.” – Lobo Tiggre (from Independent Speculator, April 26, 2021)

An article about our economy – specifically, its debt, induced by Keynesians – written by someone who’s more an Austrian (my characterisation of him, not his). As ever, make your own judgments.

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