Off The Cuff: Between A Rock & A Hard Place

In this week's Off The Cuff podcast, John Rubino and I discuss:

• The Politics Of Paucity
  • Why our current leaders are singularly ill-equipped to deal with de-growth
• Rate Hike/Fake Hike
  • Is future central bank tightening a fantasy story?
• Destination Hyperinflation
  • It's the safest bet (in the long term)
• Prospect Theory
  • The pain of losses outweighs the pleasure of gains

While Chris is on the road today, I slip into the chair to interview John about the macroeconomic picture. We have a system too indebted to grow out of, and the sparse growth we do have is slowing down. Our leaders have cut their teeth in a prolonged era of expanding prosperity (both real and stolen); they have no expertise in dealing with contraction — which is what we have ahead of us, likely for several generations. Given that, it is highly unlikely the political and economic elites will choose austerity and let the natural deflationary forces play out to 'cleanse' the system. Instead, they will print until they can print no more, destroying the purchasing power of the worlds' currencies. Of course, this will not happen quickly, nor linearly. There will be plenty of turbulence and unpredictability to make sure everyone loses valuable capital along the way.

John and I end by discussing the science underlying Prospect Theory, and why it is clearly the time for those with financial assets to focus on loss avoidance vs incremental gains.