John Rubino's Blog

Not so long ago the dollar was the world’s only reserve currency. Everything else was one (or several) steps down in terms of safety and liquidity, and major financial institutions acted accordingly, accumulating dollars for the risk-free parts of their portfolios.

Most non-libertarians will like some of these nullification moves and abhor others. Conservatives hate the idea of legal weed, for instance, and liberals can’t tolerate states running their own health care systems.

Two years, billions of dollars worth of political ads, and a nearly infinite number of platitudes and lies later, the election is finally over and we’re…back where we started, with a divided government run by the same people, likely to pursue the same policies...

One of the lessons of medieval history (I’m listening to one of those recorded lecture series on the subject this week) is that Europe wasn’t always made up of today’s familiar countries.

The idea of a “debt jubilee” — that is, a wide-spread forgiveness of debt as a way to reset the US financial system — has been bouncing around for a while. But it hasn’t gained mainstream traction because it seems, at first glance, to be too simplistic to be worth serious thought.

Say you’re an up-and-coming superpower wannabe with dreams of dominating your neighbors and intimidating everyone else. Your ambition is understandable; rising nations always join the “great game”, both for their own enrichment and in defense against other big players.

A near-death experience isn’t something one gets over right away. So it’s no surprise that the US leveraged speculating community was a tad more cautious than usual for a while. Real estate investors, for instance, still bought houses, but only on very favorable terms where rental income would clearly exceed expenses.

For most small business people, the ideal life goes pretty much like this: a few years of all-consuming obsession to get set up, followed by a few decades of 12-hour days to build a reputation and client base sufficient to make the business valuable.

Over the past few months Germany, Switzerland and the US have sold bonds with negative yields, meaning that investors are in effect paying those countries to safeguard their capital.

As everyone knows by now, Greece, Spain and the rest of the PIIGS countries can’t fix their economies because they can’t devalue. If they were still using their old national fiat currencies, so goes the conventional wisdom, they could just mark them down by 30% and instantly see their exports surge and their deficits shrink.