DyingEconomy.com was established in 2020 with the aim of blogging about the possible return of stagflation to the western world in the near future.
The major western economies at that time had, over a period of several decades, accumulated levels of national debt that seemed to threaten insolvency of the entire global financial system. When the Covid-19 pandemic hit, and mass lockdowns were ordered, that level of debt took on a new meaning as fiscal stimulus checks were sent out en masse.
Interest rates had, since the 2008 global financial crisis, been held at extremely low levels. While this did make the debt repayments affordable, it also encouraged even greater accumulation of debt. Repeated rounds of quantitative easing i.e., money-printing, after 2008 did keep the banking system from collapsing as a result of the crisis, but the debts just continued to mount up.
At some point, with money-supply growth continually outpacing GDP growth, inflation was always going to emerge. We saw this materialize in 2022, but it wasn’t just fueled by money-supply growth and stimulus checks, the pandemic lockdowns contributed in a big way due to the breakdown of the global supply-chain which created shortages of many products, commodities, component parts, and raw materials.
Then came the war in Ukraine, with further economic stress added to western economies in terms of its impact on the energy market. Sanctions against Russia effectively cut off access to cheap oil and gas for many countries, particularly in Europe. With energy costs being an important cost of production, rising costs only added yet more fuel to the inflation fire that was already burning.
Heading into 2023 it seems very likely to most economists that a serious recession is on the horizon, and once GDP starts to decline it is not difficult to predict that yet more money-printing will be used to plug the gaps in the ever growing budget deficits of the western economies. The omens that portend to this are deeply disturbing.
Printing larger and larger amounts of money to pay for government spending while inflation is still high and GDP is falling, all at time when debt repayments are increasing unaffordable, has all the hallmarks of hyperinflation and the devastating consequences that it brings.
DyingEconomy.com will keep abreast of economic developments during these dangerous times and, for those readers that it reaches, I hope that it will provide some useful insights.
Another aim of the website is to explain economics for students of the subject. It will cover all of the essential material in Microeconomics and Macroeconomics at undergraduate level, and it will do so while stripping out all of the non-essential mathematical aspects that overcomplicate the teaching of the subject in the classroom.
Understanding most economic concepts is actually quite straightforward, and economic science has long been criticized for its inappropriate use of mathematical and statistical models that were developed for the hard sciences like Physics. These models work with precision when studying particles, but people can at times behave in entirely unpredictable ways.
Empirical evidence, the bedrock of mainstream economics, is all but jettisoned by the Austrian school of economics on account of the unpredictable nature of human beings in their economic behavior. The Austrian influence has been growing in recent years, not least because of the failings of the mainstream schools of thought in terms of their inability to predict the 2008 financial crisis, or rising inflation in 2022.
DyingEconomy.com will not make the same mistake of ignoring the Austrian perspective, but it will also give voice to the Keynesians, the Monetarists, and the Classical schools of thought.
All of the content is written me, Steve Bain, and you can read about my background here: Steve Bain Bio Page
I can be contacted at: +44 (0)1623 846656
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