Tom welcomes back Richard Duncan, economist and author of ‘The Money Revolution.’ The discussion revolves around the implications of Duncan’s latest work, which challenges conventional economic theories, particularly those rooted in Austrian economics. Their last conversation was over two years ago.
Duncan begins by recapping the ideas presented in his book, including how the unexpected response to the 2008 financial crisis, characterized by trillions of dollars in fiscal stimulus and monetary expansion, did not result in high inflation despite concerns from Austrian economists. He also highlights the shift away from a gold standard and its consequences, such as altered constraints on money creation, government borrowing, and trade deficits.
Furthermore, Duncan discusses the impact of these changes, including increasing income inequality and implications for inflation and wealth growth. The conversation also touches upon the economic environment shaped by the pandemic and its unprecedented fiscal and monetary stimulus measures, which led to high inflation rates.
Despite concerns about high inflation, the economic recovery led to significant wealth growth, enough to pay off the national debt with some money left over.
They discuss the implications of the stimulus and the lingering effects it continues to have on the economy. Richard is a proponent of establishing a sovereign wealth fund for the United States to finance investments in new industries and technologies, such as artificial intelligence, nanotech, biotech, fusion, quantum computing, and genetic engineering. The U.S. currently invests half as much in research and development compared to decades ago, leading to a slowdown in productivity and economic growth.
Additionally, Richard raises concerns about potential market vulnerability from lower interest rates due to the unwinding of the yen carry trade and inflated asset prices in the U.S. He emphasizes the significance of establishing a sovereign wealth fund for the United States and encourages listeners to visit his website, Richard Dunkin Economics dot com, for more information on economic events and their potential market impacts.
Time Stamp References:
0:00 – Introduction
1:02 – Fed & US Money Creation
12:40 – The Pandemic Inflation
17:33 – Growth & Technology
22:05 – Pandemic Choice & Wealth
32:01 – Recent Inflation Causes
42:14 – Sovereign Wealth Funds
53:28 – Buyers of U.S. Debt?
1:03:35 – Dollar Reserve Status
1:08:24 – Fed Rate Cut Decision
1:12:35 – Yen Carry Trade
1:16:09 – Wealth/Income Ratio
1:19:18 – Wrap Up
Guest Links:
Website: https://www.richardduncaneconomics.com/
Twitter: https://x.com/papermoneyecon
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Richard Duncan is the author of four books analyzing the causes and the effects of the economic crises that have brought the global economy to the brink of collapse during recent decades.
The Dollar Crisis: Causes, Consequences, Cures (John Wiley & Sons, 2003, updated 2005), predicted the global economic disaster that began in 2008 with extraordinary accuracy. It was an international bestseller. The Corruption of Capitalism: A strategy to re-balance the global economy and restore sustainable growth (CLSA Books, 2009) described the long series of US policy mistakes responsible for the Crisis of 2008. The New Depression: The Breakdown Of The Paper Money Economy (John Wiley & Sons, 2012) introduced an important new analytical framework, The Quantity Theory of Credit, that explained all aspects of the global economic crisis that began in 2008.
His latest book is The Money Revolution: How to Finance the Next American Century (John Wiley & Sons, 2022).
Since beginning his career as an equities analyst in Hong Kong in 1986, Richard has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok. Richard currently publishes Macro Watch, the bi-monthly video newsletter he founded in 2013.
Richard has appeared frequently on CNBC, CNN, BBC, and Bloomberg Television, as well as on BBC World Service Radio. He has published articles in The Financial Times, The Far East Economic Review, FinanceAsia, and CFO Asia. He is also a well-known speaker whose audiences have included The World Economic Forum’s East Asia Economic Summit in Singapore, The EuroFinance Conference in Copenhagen, The Chief Financial Officers’ Roundtable in Shanghai, and The World Knowledge Forum in Seoul.
Richard studied literature and economics at Vanderbilt University (1983) and international finance at Babson College (1986); and, between the two, spent a year traveling around the world as a backpacker.