If you want to really understand the current monetary system and the risks and opportunities it creates, you must read “The Age of Debt Bubbles“. This is a comprehensive, informed, and thorough analysis of the current global monetary system.

Debt bloats the global economy. Spending and debt, rather than savings and prudent investment, form the foundation of economic development.

This debt-based system, where sovereign debt is allegedly the safest asset and governments continue to stretch their solvency ratios, is constantly generating boom and bust cycles. Through a meticulous examination of historical data and trends, this book analyses the risks posed by the ever-expanding debt bubbles.

Independence of central banks has been under question for many years. However, the disappearance of “higher for longer” in 2024 erased any doubt about the monetary authorities’ lack of independence.

The Federal Reserve panicked in June 2024 and decided to delay the normalization of its balance sheet, coinciding with a period of massive deficit spending and Treasury debt issuance at elevated rates.

The Federal Reserve proceeded to implement an unnecessary 50 basis point rate cut during a period when financial conditions were at their loosest in years, growth was allegedly robust, and employment was solid, according to the Fed, but inflation remained above target.

The German economy was once a global industrial powerhouse, showing a strong resilience in times of crisis as well as significant productive growth in periods of expansion.

Germany displayed robust industrial activity, solid productivity, and enviably low unemployment levels, which added to real high wages. However, in the past five years the economy has stagnated, and its GDP is 5% smaller than the pre-pandemic growth trend suggested, according to Bloomberg Economics. Even more worryingly, they estimate that four percentage points of that loss may be permanent.

Most analyses blame the weakness of the German economy on higher energy costs and the Chinese slowdown affecting its exports. However, the reality is more complex.

Germany’s stagnation is self-inflicted.