All posts by Daniel Lacalle

About Daniel Lacalle

Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Author of bestsellers "Life In The Financial Markets" and "The Energy World Is Flat" as well as "Escape From the Central Bank Trap". Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Frequent collaborator with CNBC, Bloomberg, CNN, Hedgeye, Epoch Times, Mises Institute, BBN Times, Wall Street Journal, El Español, A3 Media and 13TV. Holds the CIIA (Certified International Investment Analyst) and masters in Economic Investigation and IESE.

The Oil Market Is Broken

Global Economy, On the cover, Sin categoría
La crisis más severa desde la gran depresión

OPEC and its partners have been cutting production since September 2016. Between September and November 2016 they cut production by more than 1.7 million barrels a day, a historical cut that was wrongly prolonged throughout the expansionary phase of the global economy. In December 2018 they cut production again.

OPEC’s most serious mistake in recent years has been forgetting its mission and principles and trying to artificially inflate the price of oil. No oil-producing country lost money at 2016 prices, the only thing they could not afford was to pay huge subsidies, civil servants and non-oil expenses that many OPEC members finance with export earnings.

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Banks Will Not Bail Out The Economy

Banks, Global Economy, On the cover
Banks Will Not Bail Out The Economy

These days, we hear a lot that banks were the problem in the 2008 crisis and now they are the part of the solution. 

Banking was not the main problem of the 2008 crisis, but one of the symptoms that indicated a more serious disease, the excess risk taken by public and private economic agents after massive interest rate cuts and direct incentives to take more debt coming from legislation as well as local and supranational regulation. Lehman Brothers was not a cause, it was a consequence of years of legislation and monetary policies that encouraged risk-taking.

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Massive Stimulus May Boost Inflation The Wrong Way: Stagflation

Global Economy, On the cover, Sin categoría
Credit: www.epictop10.com
Credit: www.epictop10.com

All over the world governments and central banks are addressing the pandemic crisis with three main sets of measures:

  • Massive liquidity injections and rate cuts to support markets and credit.
  • Unprecedented fiscal programs aimed at providing loans and grants for the real economy.
  • Large public spending programs, fundamentally in current spending and relief measures.
Continue reading Massive Stimulus May Boost Inflation The Wrong Way: Stagflation →