Do not worry about those who make catastrophic predictions. The history of blunders of the end-of-the-world doomsayers is so vast that only a politician could ignore them. Let us remember that, according to “scientific analysis” of a few decades ago, we would have run out of oil and water already seventeen years ago. Ignoring efficiency, technology and substitution is the favorite hobby of subsidy collectors.
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Is The Reflation Trade Back?
We reach the end of the year and we start to read many investment banks and strategist reports with the outlook for 2020.
Continue reading Is The Reflation Trade Back?Latin America’s Debt Maturity Wall
In this short video, we explain the risks to Latin American currencies in countries facing a shortage of reserves in the middle of an important wall of US dollar-denominated maturities.
High Government Spending Leads To Stagnation
The idea that governments can’t lower taxes because there is a deficit, but are free to raise all expenses even if there is a deficit can be found in many political manifestos these days. Central planners always see the economic challenges as a problem of demand, and as such cringe at the idea of prudent investment and saving. When GDP growth, gross capital formation, and consumption are lower than what Keynesians would want, they always blame the alleged problem on “too much saving”, a ridiculous premise based on the perception that economic cycles and excess capacity do not matter and if companies and citizens don’t spend as much as the government wants, then the public sector should spend a lot more. Continue reading High Government Spending Leads To Stagnation