Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Timescales (by Springheel Jack)

By -

I have a bearish bias that I have to struggle with. The source of my bearish bias is that I've read an awful lot of history and economics, and have always been skeptical about the existence of the Tooth Fairy and Santa Claus. I don't believe that well-meaning folly results in happy endings as a rule, and current world economic policies look like slow fiscal suicide in historical terms.

However I try to put that bias aside as far as possible because history also teaches us that hubris can last quite a while before nemesis arrives to set things back on the proper path, and this collective delusion of the developed world that anaemic growth caused largely by too much debt, can be corrected by amassing more debt to grow our way out of it, might continue for a while longer.

Ultimately this period should end with the bond markets demanding high real interest to lend to governments who have become doubtful credit risks, and a consequent change in policy that corrects the problem through austerity to return government finances in the developed world onto a sustainable long term path, and possibly also default, either by classical or inflationary means.