Lessons from Economic & Demographic History

Fallacy Alarm
Feb 10, 2023
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Fallacy Alarm
The Great Vindication of Modern Monetary Theory?
Modern Monetary Theory (MMT) is an unorthodox way of economic thinking that contradicts many ideas of mainstream economics. It was actually introduced in the 1990s, but did not gain significant popularity before the late 2010s. Lately, it has been scrutinized and even ridiculed a lot. This is presumably for two reasons. Firstly, it has unfortunately been…
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6 months ago · 9 likes · 9 comments · Fallacy Alarm
Fallacy Alarm
Is an ageing society inflationary?
Quick announcement before we dive in: If you are interested in my thoughts on Tesla’s 3Q22 earnings, check out this article. If you are a free subscriber, I figured it is likely a more pleasant reading experience for you if I do not clog your inbox with previews of premium articles. …
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a year ago · 1 like · Fallacy Alarm
Fallacy Alarm
The Demographic Deflation Bomb is ticking
The podcast version of this article can be found here. You cannot see it in aggregate population numbers yet, but we have been dealing with an undermining demographic base for 40 years, which is a major headwind for economic growth. It dampens demand for goods, services and infrastructure. A huge deflationary force that has been brewing for decades. And …
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2 years ago · 7 likes · 11 comments · Fallacy Alarm
Fallacy Alarm
Lessons from The Great Inflation for Today
This article is also available as a podcast here. 1966 to 1981 was one of the most frustrating periods for US stock investors and economic agents ever. It coincided with the The Great Inflation. Will we repeat this inflation shock? And if so, what are the implications today? It is pretty much impossible to comprehensively cover this without writing an en…
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2 years ago · 2 likes · 6 comments · Fallacy Alarm
Fallacy Alarm
One for the Road
On September 21, 2020, the Congressional Budget Office presented their 2020 Long-Term Budget Outlook. They projected Federal Debt to GDP to hit 125% by 2035 and 200% by 2050. Today, less than two years later, we are already at 125%. We hit this ‘milestone’ 13 years early. Hooray, I guess…
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2 years ago · 4 likes · 2 comments · Fallacy Alarm
Fallacy Alarm
What can we learn from the 1920s/30s boom and bust today?
In this article, you will learn that a generational boom and bust requires three key ingredients converging to a perfect storm, firing up investors and then leaving them in the ashes afterwards for decades. We will do so primarily based on the roaring 1920s and the Great Depression with the intention to make inferences to today. I have done a similar pi…
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2 years ago · 2 likes · Fallacy Alarm
Fallacy Alarm
Baburu Keiki - Is this the Nikkei 1990 moment for the S&P?
The Uniqueness of the USA While I do think consensus sentiment is fairly bleak at the moment and any market rebound will be viewed as a temporary bear market rally by many people, I also see a lot of dip buying advocates whose entire argument essentially rests on extrapolating the past to the future…
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2 years ago · 2 likes · 2 comments · Fallacy Alarm
Fallacy Alarm
A measuring stick for the markets
The 2020/21 rally in stock prices, and asset prices more generally, has left many people confounded. Especially, since many people felt that the base in Feb’20, the eve of the Corona Crash, was already significantly inflated after the 2010s run. This routinely leads to a doomsday debate in financial markets every time there is a correction with the lead…
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2 years ago · 3 likes · Fallacy Alarm
Fallacy Alarm
Will millennials drive the roaring 20s?
Summary I believe the sharply rising stock prices we have been observing in the last years are not just a story of an accelerated innovation cycle accompanied by paradigm shift in monetary policy. There are also demographic factors at play which are about to turn into a substantial tailwind for stock market valuations. Specifically, this relates to the m…
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2 years ago · 5 likes · Fallacy Alarm