When ‘Cheap; Money Won’t Be, What Then?

Welcome to the Capital Note, a newsletter about business, finance, and economics. On the menu today: the dangerous illusion of cheap money, ...

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Image BY DANIEL TENREIRO
& ANDREW STUTTAFORD
Image July 02, 2021
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BY DANIEL TENREIRO
& ANDREW STUTTAFORD
July 02, 2021
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When 'Cheap; Money Won't Be, What Then?

Welcome to the Capital Note, a newsletter about business, finance, and economics. On the menu today: the dangerous illusion of cheap money, cutting dividends is not the answer, home prices and inflation, warning signs from the Skew index, and fungi play the markets.

News and Views

TANSTAAFL and Ultra-Low Interest Rates
Ultra-low interest rates are an invitation to malinvestment, irresponsibility, and delusion (not mutually exclusive failings), especially when those rates are, even if only in part, the work of non-market actors.

Quite a bit of the borrowing that is under way at the moment (and has been for a while) is going to end in disappointment and tears. Eventually it will also lead to a major crisis in the government's finances.

Brian Riedl, writing in the Washington Post:

The election of Joe Biden to the presidency has prompted liberal calls to set aside pesky budget deficit concerns and go deeper into debt to finance large new spending initiatives — well beyond short-term stimulus. Influential left-of-center experts such as the Harvard economists Lawrence Summers and Jason Furman ...   READ MORE

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Cale Clingenpeel

The Beginning of a Nationwide Natural Experiment in Labor Markets

The UI data release last week marks the first glimpse into a nationwide natural experiment that will unfold over ...

Andrew Stuttaford

About Home Prices . . .

On the menu today: home prices, Starlink, Arizona's flatter taxes, and ...

Peter J. Tanous

A Currency Board Would Bring Lebanon Back from the Dead

It's a necessary first step to facilitate needed reforms that can save Lebanon from becoming a failed state under ...

Iain Murray

INVEST in America Act Is a Bad Investment

It would massively increase public spending, prod us unwillingly onto public transit, and make our goods and fuel ...

Veronique de Rugy

Industrial Policy Meets the Real World

The belief that more government spending and regulations are what economic growth and innovations are made of is ...

Daniel Tenreiro

Facebook Lands a Major Court Victory

A discussion on how Facebook beat regulators in court, House Republicans released a tech-regulation framework, ...

THE CAPITAL RECORD PODCAST

WHAT NR IS READING

The Case for Nationalism: How It Made Us Powerful, United, and Free

By Richard Lowry

“Makes an original and compelling case for nationalism . . . A fascinating, erudite—and much-needed—defense of a hallowed idea unfairly under current attack.” — Victor Davis Hanson

LEARN MORE
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