Exchange rates explained

How are exchange rates determined? This is one of the most fundamental and complex questions in economics. And as of today, it has NOT yet been fully solved. That being said, economists have a pretty good understanding of the basic variables that determine the exchange rate: inflation and interest rates.... [Read More]

The dangers of financial globalization

Let me tell you something pretty crazy…. I have one bank account in Estonia with a British bank and another South Africa. I’ve also invested in some stocks in the Netherlands and some bonds in the United States. But, it is 2021, and I’m guessing that, actually, this is not... [Read More]

The financial cycle explained

In theory, economists like to look at data, at the facts if you will. Well, one fact that they have been puzzling over for quite some time now is why asset prices, such as house prices and bank credit creation tend to move up together.. Until, of course they don’t... [Read More]

Who is Janet Yellen? The 2021 U.S. Treasury Secretary

Treasury secretary of the United States of America, the most powerful job in finance. And the next person to do it will be Janet Yellen. In this new role, she will be responsible for U.S. economic policy, tax policy, fiscal policy, as well as managing government debt. Obviously, this is... [Read More]

How quantitative easing differs from money printing

In this post I will not only refute the simplistic view that quantitative easing is money printing, I’ll tell you exactly how QE is different from money printing. Money printing, the most taboo subject in economics. But, if we are to believe much of the media. This is what has... [Read More]