The holidays are over. We just had Christmas, quickly followed by New Year’s Eve. A good moment to reassess the year. For me personally, moreover, a useful moment for self-reflection. How much of the things we have written over the course of last year has turned out to be true? Can we, perhaps, shed light on some of the important topics again? In any case, something that can be observed from this top 10 of 2017, is the fact that cryptocurrencies have been the eye catcher of 2017. Various
... »Top 10 Best Read Articles of 2017
January 3 2018
Olav Dirkmaat
The Crypto Bubble Is a Symptom of Something Bigger
January 2 2018
Whenever there is an (artificial) economic expansion, driven by cheap credit and too low interest rates, it is sooner or later bound to go wrong. What we do not know in advance, however, is how things exactly go wrong. We only know that – at an artificial interest rate – malinvestments are made in certain sectors of the economy. In the 90s, we saw malinvestments in internet (startup) companies, domain names and the NASDAQ. In the run-up to the 2008 crisis the malinvestments were mainly
... »Olav Dirkmaat
Fed Raises Interest Rate and Winter Is Yet to Come
December 19 2017
Even though large parts of the world were colored white over the past week (large parts of Europe and the U.S. were covered in snow), the proverbial economic winter is yet to come. Last week, as we expected and already explained in one of our previous articles, the Fed announced another rate hike,
... »Olav Dirkmaat
The Yield Curve Just Keeps Getting Flatter (and Analysts Keep Looking for Excuses)
December 13 2017
Former Fed Chair Ben Bernanke studied it in detail decades ago: the yield curve. And that yield curve is currently flattening and flattening. An inverted yield curve (in which the short-term interest rate exceeds long-term rates), normally signals that a recession is near. As a result, analysts keep a close tab on the spread between short-term and long-term yields. Whenever the yield curve spread narrows, there is cause for alarm. And last week, the yield curve spread continued to decline even further.
Despite the recent flattening of the yield curve, there are various analysts who argue that this trend is absolutely no cause for concern: a recession is, according to them, highly unlikely, despite approaching at a frightening rate an inversion of the yield curve.
Who is right? What is
... »Olav Dirkmaat
