The Bear’s Lair: How poor countries can beat de-globalization

The outstanding winners from the 1991-2016 policies of globalization were dwellers in poor countries. With international sourcing much cheaper and easier and foreign investment flows soaring, well-run poor countries could attract capital, jobs and export-producing industries in profusion, producing revenues that could educate their workforce and hugely raise their living standards. For poor countries, the world has now become harder. Yet even without globalization, well-run poor countries can still become middle-income and then rich. Continue reading

The Bear’s Lair: Britain without Brentry

December 12’s U.K. election is essentially a referendum on Brexit, with much of the population fearing its outcome. The post-Brexit future is unclear. However, we can say more about the past than the future, even a past depending on an event that did not happen, since most other variables are known. Hence it is worthwhile to look at the potential trajectory for Britain since 1963, had it taken “No” for an answer after President Charles de Gaulle’s veto of Britain’s entry to the Common Market. The exercise is strangely reassuring. Continue reading

The Bear’s Lair: Back to a 17th Century economic policy

In an earlier column, I reflected gloomily on the terminal debt crash that the world is likely to suffer around 2040, and on the possibility that productivity growth is slowly disappearing. If those hypotheses are true – and I would not claim them as more than probable — then we will return in our economic management to the last period before industrialization brought perpetual progress – the 17th Century. Continue reading

The Bear’s Lair: Global stock markets look just like Bitcoin

A new paper reports that the Bitcoin bubble of 2017-18, when the price of that cryptocurrency reached $20,000, was fueled by “funny money” creation in its sister coin Tether. That is hardly surprising, the cryptocurrency universe, where all values are artificial, is bound to be subject to scams and bubbles. However, it throws a lurid light on the supposedly “real” stock markets of the world: since the world’s monetary authorities are through perpetual quantitative easing equally creating money from nowhere, then surely today’s stock markets must be in equally fictitious bubbles. Continue reading

The Bear’s Lair: Anglosphere governance is the Gold Standard

Assuming Britain finally manages to edge its way out of the EU, it will look for other affiliations. The obvious one is with the core Anglosphere of the United States, Britain, Canada, Australia and New Zealand. At first sight, this looks like a model driven by mere nostalgia. Not so: the governance of the Anglosphere is the best in the world, in terms of assuring the happiness and prosperity of its citizens. Thus, a loosely associated Anglosphere can serve as a global model. Continue reading

The Bear’s Lair: Towards a low-overhead 2020s

The Western world approaches the 2020s at the top of a boom, with asset prices and leverage at all-time highs and interest rates at all time lows, yet with living standards mostly disappointing expectations. The extreme policies that have produced this position are unsustainable over another decade, even if we were mad enough to try. The solution will be unpleasant but inevitable: the overhead “fat” that has accumulated throughout the world economy must be eliminated — a process that will inevitably be painful. Continue reading

The Bear’s Lair: The George Soros Nightmare Recession

Since the early 1990s, we have been living in the George Soros Dream World. Interest rates have been very low, encouraging leverage, raising asset prices and making billionaires richer. Meanwhile, the world economy has become ever more global, moving towards the global one-party state Soros favors and impoverishing the working-class, modestly educated, locally-oriented folk the billionaire disdains. Now he and his cronies hope for a recession that will doom President Donald Trump’s re-election. They should be careful of what they wish for; this time, the recessionary bell may be tolling for them. Continue reading

The Bear’s Lair: Treaties do more damage than tariffs

Conventional wisdom holds that treaties represent countries getting together peacefully to advance humanity’s goals, while tariffs represent dog-eats-dog negative-sum competition that can provoke wars. Yet treaties, being complex and negotiated in secret, are mostly the work of rent-seeking bureaucrats, whereas the competition of tariffs provides international relations with valuable grit, preventing countries from conspiring together against ordinary people. As new treaties get sillier, it becomes clearer: they do far more damage, economic and to liberty, than do tariffs. Continue reading

The Bear’s Lair: Unicorn is a sub-species of Dinosaur

The failure of the WeWork IPO and the poor post-issue performance of Uber and Lyft have called into question the current Silicon Valley fashion for multi-billion-dollar capitalizations of “Unicorns” that make heavy losses and remain privately owned. Maybe throwing endless pools of money at unproven intellectually shaky concepts doesn’t work. When Unicorns go the way of the dinosaur, a healthier, more innovative start-up economy will emerge. Continue reading

The Bear’s Lair: The blessed world of low asset prices

After a decade of ultra-low interest rates, we have become used to ultra-high asset prices – in big city real estate, stocks, bonds, tech start-ups, art and collectibles, and pretty well everything else you can think of. It is too depressing to think of the damage that will be done by the inevitable bursting of this universal bubble. Let us rather look forward to say 2030, to a world of low asset prices and historically average interest rates, and remind ourselves of that world’s advantages. Continue reading