There are many times in life when something doesn’t seem right, but you can’t put your finger on the problem. You know enough to sense it, but not enough to solve it—or even see it clearly.
One of the best fixes for a lack of understanding has long been the reading of books. YouTube can be incredibly helpful, but nothing increases understanding like the well-researched analysis of a knowledgeable expert, clearly presented in written format.
However, not everyone has the time or inclination to read. For them, there are Cliff Notes, reviews, and author interviews.
You’ll find no Cliff Notes or reviews on this site, but there are author interviews aplenty. David is a financial professional in his own right, schooled abroad in philosophy, a polymath in interests and accomplishments, a world traveler, a disciplined athlete, and an absolutely voracious reader, so his ability to correlate disparate or innovative thoughts and concepts is immense. When he interviews an author, it’s because he’s already read every word in the book, taken extensive notes, and found the work compelling for a specific reason. He knows what he’s talking about. And in the MWC, he asks questions that quickly get to the heart of what makes the book worthwhile.
That happens this week in a particularly insightful interview. Interest rates, like molecular bonds, are fantastically boring to contemplate. But without them everything falls apart. Rates are well worth knowing about, but how to get over the boredom… You need a highly skilled storyteller, which fortunately we have. David found him, read his book, and interviewed him for your edification and listening pleasure.
The result is amazing. The callout paragraph at the beginning of the podcast is eye opening in the extreme, and the entire interview entails one incredible insight after another. This is a superb opportunity to look into something so important, yet so inaccessible. For you, it’s now accessible. Just click on the link to the McAlvany Weekly Commentary below.
Key Takeaways:
- A big subject that elicits big yawns—but not today
- If it walks like a bubble, talks like a bubble, acts like a bubble…
- Morgan’s big week!
- Gold leaves the station
The McAlvany Weekly Commentary: David conducts an eye-opening interview with Edward Chancellor, author of The Price of Time. His book describes interest on loans as the price of time, hence the title. And the price of time can tell us much about conditions prevailing in a nation or locale, such as when it’s on the ascent, in the prime of life, or circling the drain. These times in an entity’s “life” typically present different risk profiles, which affects how valuable time is in them. Edward’s rationale for calling interest the price of time is alone worth the time to listen to the interview, but there’s much more. He gives an abbreviated history of interest rates and attitudes on the subject in the West. If you’re still unconvinced of the value of understanding interest rates, consider this: “The reason I wrote the book was not just that no one had been thinking about interest for a long time, but you couldn’t really understand the financial world. You couldn’t understand the economy. You couldn’t really understand some of these social upheavals that were taking place without understanding the nature and the role of interest.”
Credit Bubble Bulletin: The title of Doug’s weekly summation this week is “Bubble Confirmation,” which he accomplishes with a long, hard look at the unvarnished facts. These come in the form of the Fed’s “Financial Accounts of the United States—Z.1.” “No Wall Street spin or BS—just 190 pages of data.” As Doug presents the essence of that data, the sheer immensity of the problem becomes apparent. The bubble is confirmed. We’re in deep trouble. “Q4 data confirm that government finance Bubble dynamics run unabated.” Keep in mind, this is the Fed’s own data, and “Fed officials…ignore their own credit and flows data at all our peril.” One imagines Doug intoning to the Fed with his most Nicholsonesque sneer that, “you can’t handle the truth!” And so it is. It’s a quandary of the Fed’s own making, but that institution is damned if it loosens monetary policy, damned if it doesn’t. There’s much more to the story, and it’s presented in detail in this week’s installment. No one collates and presents complex data like Doug, so if you want the facts and you want to understand them, make this site part of your weekly (or daily) reading.
Hard Asset Insights: Morgan comes up lame this week, and offers us only prices and some weak excuse for not getting his homework done on time. The dog didn’t eat it; Morgan got married! As valuable as HAI is, and as much as we look forward to reading it each week, perhaps he can have a bye just this once. Congratulations, Morgan! May wedded bliss be your lot for many decades to come!
Golden Rule Radio: Miles and Rob begin the program by noting that most markets were notable for their quietude last week. The big exception was gold, which set an all-time price record. People who noted gold’s last record print in December 2023 couldn’t help but notice the very thin support for that record high price then. This newest high is significantly different in composition—much more substantive in its buildup and forceful in its breakthrough. Still, the hosts note that gold is now overbought, and advise listeners who wish to add to their gold portfolios to confer with an advisor to determine the optimal way to do so. The hosts discuss likely developments from here, and conclude, bottom line, in Rob’s words, “this is a strong market.” They then turn to silver, and note that if the gold price holds strong, silver is likely to gain as well. Because of these different rates of price change in the gold and silver markets, the hosts discuss ratio trading further, emphasizing this powerful and low-risk strategy to increase your ounces of precious metals.
