The Bear’s Lair

The Bear’s Lair: The AI revival of Thomas Mun

Thomas Mun (1571-1641) wrote the mercantilist classic “England’s Treasure by Forraign Trade” arguing that the country should run a trade surplus and thereby build up “treasure.” It was derided by classical and Keynesian economists alike. However, almost 400 years after its writing, it may be coming back into fashion in the world of Artificial Intelligence, […]

The Bear’s Lair: Germany must stop beggaring its neighbors

German Chancellor Angela Merkel’s staff published a photo taken at the recent G7 summit that showed Merkel glowering at a defiant President Donald Trump, suggesting that Trump was isolated and alienating America’s allies. Yet when we examine actual behavior, it is Germany that is beggaring its neighbors and failing to live up to international obligations. […]

The Bear’s Lair: An honest world without hedge or PE funds?

Hedge funds and private equity funds have been the big winners in attracting money over the past 20 easy-money years. Yet more and more investors are choosing indexed portfolios, which take out the investment manager’s skill entirely. If you believe mutual funds can’t beat the market, why should you believe hedge funds and private equity […]

The Bear’s Lair: Globalization has become political poison

Since 1991, globalization has been touted as the solution to all the world’s problems, that will pull emerging markets out of poverty while making rich countries more efficient and competitive. Yet in the last few years, public opinion has soured on it; whenever new measures of globalization are proposed, voters oppose them vehemently. There are […]

The Bear’s Lair: Nearly time for a Gold Standard Referendum

On June 10, Switzerland will vote on a new system of “Vollgeld” that would abandon fractional reserve banking and centralize money creation in the central bank. It appears to be an improvement on the current system, making bank runs almost impossible and reducing leverage, but its opponents are correctly saying that by centralizing all money […]

The Bear’s Lair: The world must learn to love root-canals

Senator Marco Rubio wants to tee up yet another set of tax cuts, not oriented towards economic growth, that will further widen the U.S. budget deficit. Argentina is about to borrow $30 billion from the IMF, since it is unable to get close to balancing a budget, based on spending that is 60% higher as […]

The Bear’s Lair: The appalling seductiveness of Karl Marx

The 200th birthday of Karl Marx on May 5 passed with several indications, in both Europe and China that his appeal is not dead, and indeed showing considerable signs of revival. China has significantly reversed its move away from Marxism, whereas elements in the EU High Command seem to be recognizing that a centralized Marxist […]

The Bear’s Lair: The world’s greatest need is fewer people

While we are in a brief period of decent global growth, the underlying productivity trends in rich countries are disquieting. What’s more, it now seems likely that, except in the United States, we will not escape the zero-interest rate lunacy before the next downturn. Even more disquieting is a re-acceleration of global population growth, so […]

The Bear’s Lair: Shadows deepen on EU economy

Most EU countries are rich and highly productive, with specialized industries other countries would die for. Yet the bloc’s economic track record has been mediocre in the past decade and looks likely to become considerably worse. In its 2021-27 Budget, the European Commission plans to tweak its “cohesion funds” away from Eastern Europe and towards […]

The Bear’s Lair: Tumbril time for King Dollar

Larry Kudlow, the President’s new chairman of the National Economic Council, is a well known proponent of the idea of “King Dollar.” That concept states, basically, that the U.S. should aim for a strong dollar, even though it produces large trade deficits, because it allows the country to buy more foreign goods and services and […]