Economic Trends

Long-term trends grow from short term trends. We attampt to determine the short term trends and where they are pointing.

Cryptocurrency: Is Bitcoin the Future of Money?

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Just a few short years ago no one had heard of them and now it seems like everybody on the Earth knows about Bitcoin. Bitcoin (a peer-to-peer electronic cash system) was first introduced in October 2008… In 2012, at InflationData, we published an article entitled “Civil Liberties Rest Upon Sound Money” about the new currency. Since then the use of bitcoins has grown astonishingly quickly. Being the prescient financial wizards that they are, in 2014 Robert Prechter and our friends at Elliott Wave International began offering their expert financial advisory and educational materials for sale via Bitcoins… Today there are some 14.6 million bitcoin units in circulation… One major problem with most currencies is that there is nothing to stop governments from printing an infinite amount of them. This erodes the value of the existing currency and can cause them to become worthless through hyperinflation like the currencies of the German Weimar Republic and Zimbabwe… Bitcoin is unique in that only 21 million bitcoins will ever be created.

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2008 Financial Crisis- Then vs. Now

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Although the seeds of the 2008 financial crisis were sown at a much earlier period of time, the banking institutions continued to reap the benefits of easy money until the financial crisis of 2008 negatively impacted the economy. The damage would have been much larger had U.S. taxpayer’s money not been used to bail out a large number of struggling banks and companies.

It is now more than eight years since the last financial crisis has occurred, and the current global situation is now beyond that of the financial crisis of 2008. The central banks have been able to kick the can down the road, but that has only produced such vast proportions of debt that the next financial crisis will not be manageable by the global central banks.

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Brexit: Britain Defies the Odds and Chooses Independence

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Britain’s vote to exit the European Union (Brexit) on Thursday shocked not only the financial markets but especially rankled the establishment elite including the banksters, politicos and media. The rhetoric sounded like a repeat of the 2014 Scottish Referendum (See: Separatist Forces Growing in Europe) where they spent the weeks leading up to the vote sounding a bit like “Chicken Little” with their predictions that the sky would fall if Britain chose to leave the E.U. (or Scotland left the U.K.) It is interesting to note that the bank stocks were among the hardest hit in the post vote mayhem.

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Why America is no Longer a Free Capitalist Country

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Unfortunately, as soon as you put someone in control of the distribution of wealth… greedy, power-hungry individuals will gain control of it and take the majority share for themselves and their friends. Also as soon as you centralize the means of production it becomes inefficient and produces less… making everyone poorer.  A lesson learned from the former Soviet Union (i.e. Soviet Socialist Republic): When the government mandated that a factory produce 1 million nails a month they produced a million tiny worthless nails. So the government mandated that they produce 100,000 pounds of nails so they produced 100,000 (equally worthless) 1 pound nails. On the other hand, a truly capitalist factory must produce what the consumer wants or it will go out of business.

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The Socialist Time Capsule

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“What I have seen in the socialist country of Caracas, Venezuela,” Luke Rudkowski of WeAreChange wrote following his recent trip to the country, “has really rocked me to my core. “The government spends their resources on gun-free zones, no smoking areas, permits for everything, making sure people can’t protect and arm themselves, social planning, price controls on basic necessities that makes them nonexistent, bank controls so you can only take out $1 from an ATM, and you virtually have to wait in line for everything.

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