There is the possibility of a doom loop between small US banks and commercial real estate. The scenario looks like this

US Government debt has already surpassed the legislated debt ceiling of $31.4 trillion, with the Treasury relying on “extraordinary measures” to stave off default.

I have been writing that we are facing a period of high inflation since long before it was fashionable. Now I believe that on the balance of probability we face an entire decade of high inflation.

Most readers of this column will have heard of bail-outs (e.g. use of government money to stabilize banks and other financial institutions); few will have heard of bail-ins (e.g. where use depositors’ and bondholders’ funds) is used to stabilize banks.

With the attention of economists and financial analysts absorbed by the banking crisis, other clouds on the horizon are being neglected. I see sovereign default in emerging markets as one of those risks.

For the past six months, the US Fed has been fighting inflation by jacking up interest rates and tightening money supply to fight inflation.

Allow me to start with two thoughts. First, there was once an economist called Thomas Malthus who projected that population would continue increasing, while resources were finite, hence humanity was doomed to famine and pestilence.

I will start by stating my conclusion: yes, Central Bank Digital Currencies (CBDCs) are one of the greatest threats to personal freedom today, perhaps even the greatest.

More and more signs point to a new major Russian initiative to take Ukraine in the spring, including a possible attack on Kiev.

The conventional definition of World War is that it involves the participation of multiple major powers in a global conflict. Yet one increasingly hears that the Ukrainian Wars signals the outbreak of World War III.

There is an old joke that the role of economic forecasters is to make astrologers look good. Forecasting GDP or inflation for the upcoming year with any degree of accuracy is virtually impossible

The last time I wrote about the case for gold was in April 2021. At the time gold was in the range of USD 1700, and as of December 10, 2022, it now approaches USD 1800.

We have had such low interest rates over the past decade (until recently) — partly because new capital formation has been plentiful.

Prices are important economic signals. High prices—whether for energy foodstuffs, etc., are signals to the world to (a) supply more; (b) substitute; or (c) conserve.

The question in the title is perhaps a strange one to ask at a time when these two countries seem so powerful and aggressive, the former attacking Ukraine, the latter threatening to take Taiwan.

In 1994, James Carville, a Clinton advisor, stated he’d like to be reincarnated as the bond market, because “you can intimidate everybody”

According to historian Adam Tooze, we are currently potentially facing a “polycrisis”: a number of smaller to medium-sized crises in the world that have the potential to combine and reinforce each other.

Psychologists say that the human brain suffers from dozens of different biases, perhaps one of the most important of these being “recency bias”. We tend to project the past into the future.

While there are short-term fluctuations in interest rates caused by economic circumstances and central bank policies, there are also long-term structural trends affecting interest rates. This article will look in greater detail and one of the most important of these, namely demographics.

Many believe that demographics is at most remotely related to economics. If you are one of these, perhaps by the time you finish reading this article, you will be convinced how fundamentally demographics underpins economics.

In my opinion, the macro environment is riskier than before the Dotcom Bubble and before the Great Financial Bubble. Why? A nasty cocktail of factors which may reinforce each other

Many economists are of the opinion that the US Fed has had a pretty abysmal track record in forecasting inflation during past years.

Over the past month, I have travelled within North America and Western Europe, met quite a few people, including senior bankers, and have been generally surprised by the feeling of ‘business as usual’.

According to Bloomberg, the current decline in Nasdaq market cap has exceeded that of any recent crisis:

We have all heard the adage that a butterfly flapping its wings in the Amazon could affect the weather patterns on the other side of the planet. May the war in Ukraine also have such unintended consequences?

Monetary climate change (to borrow a phrase from author and columnist Ron Stoeferle) is happening far faster than environmental climate change.

The recent sanctions against Russia catalyzed a sudden fall of the Ruble from 81 Rubles to the Dollar to 150 Rubles to the Dollar.

There are three crises brewing in the world today: An energy crisis is taking shape, caused by poor transition planning from fossil fuels to alternative energies

Despite the world experiencing a humanitarian crisis and approaching Armageddon, some observers are focusing on how much damage sanctions have caused to Russia

According to macro analyst Octavio Costa, the United States (and for that matter most of the world) are facing three macro extremes simultaneously

It is an often unappreciated fact that Europe escaped the 1929 depression that began in the US, until the 1931 collapse of Creditanstalt, a large Austrian bank, which unleashed the full brunt of the depression Europe.

The US Fed has not increased interest rates, just talked of increasing rates—not even by that much—and global stock exchanges lost $4.2 trillion in week.

In my experience, most owners, CEO’s and boards of companies are highly concerned with improving operations, but

When Apollo 13 was re-entering earth’s atmosphere, with a re-entry angle of less than 5.2 degrees, the craft would have bounced off the atmosphere into space.

The recent global economic scene today may be characterized by two related phenomena: first, an “everything boom”

Much has been written about how bitcoin has taken luster and marketshare from gold over the past decade.

Monetary policy over the past few years has been the most accommodative in the history of financial markets.

You may recall that at the beginning of March 2020, I wrote an opinion that many considered outlandish at the time

Net International Investment Position (“NIIP”) is an ever-so-important but ever-so-seldom used indicator of a country’s financial health, you might say, its financial net worth.

With the long-term trend in interest rates down, and inflation trending upward, (alas, with increasing signs of not being transitory), more and more debt instruments have increasingly negative real interest rates.

Risk premium may be defined as the differential in interest rate payable on bonds of a particular country compared to the lowest risk country.

Foreign Direct Investment has an enormous impact on economic performance of developing economies.

Industry 4.0 is sweeping Central Europe, indeed the world. How does this affect your business?

Inflation does not affect emerging markets (EM’s) the same way as developing markets (DM’s). In this article, we examine (a) past and current differences in inflation rates between emerging and developed markets

On March 4, 2021, Fed Chair Jerome Powell announced “inflation will pick up in the coming months but that it would likely prove temporary and not enough for the Fed to alter its record-low interest rate policies.”

Business owners often wonder: if they were to sell their business, what would they do with their money?

No public company, no matter how large, is immune from possible attack from activist investors.

“There is no means of avoiding the final collapse of a boom brought about by credit expansion.

The last time I recommended gold as an investment was in April, 2020, at which time it traded below $1700

Our last article was on the subject of Mergers & Acquisitions, which came to the conclusion that M&A appears very robust over the past few quarters in Central Europe.

In a nutshell, surprisingly well. This article looks at (a) geographic areas that have been performing better

The backdrop Financial markets are currently experiencing unprecedented circumstances

This article will explore two reasons why you should carefully observe commodities over the coming months:

The events of the past month have created something of a paradigm shift in financial markets. This article will look at (a) what caused the surge in prices of GameStop, silver, etc.

Even if you do not own Treasuries, rising Treasury rates is arguably the most important event in financial markets this year so far.

The good times seem to be rolling: stock valuations have defied gravity and interest rates have plummeted. The world is awash with liquidity.

Whether we live in inflationary or deflationary world has a massive impact for everyone

The past week has seen two dramatic vaccine announcements—by Pfizer and Moderna—each claiming over 90% efficacy. This is good news.

Most readers are aware that Government debt was very high throughout the world before the pandemic, and is spiraling even higher during the pandemic.  Post-pandemic, how can Governments manage or reverse the massive amounts of debt?

Kristalina Georgieva, Managing Director of the IMF, titled her recent Oct 15 speech at the IMF Annual Meetings “A New Bretton Woods moment”

Interest rates are near zero in most of the developed world, sometimes negative, despite which new investment and velocity of money are falling

This article deals with the possibility of problems in the paper gold market.

It is clear that Covid-19 is creating winners and losers in the world today, although there seem to be more losers than winners.

Even if Covid-19 were to disappear tomorrow miraculously, as I will attempt to demonstrate in this article, it would take years for the already inflicted damage to work its way through the financial system

Imagine the following situation:  you are a financial advisor.  The owner of a large and very attractive hotel asks you to sell his hotel.

Most people would think that it is more difficult to sell a large company than a small company.  While there are exceptions to every rule, I would suggest that it is easier to sell a larger company than a small company

In my book, Business Exit Planning (John Wiley & Sons, 2012)1, I confess to have made a significant error in judgment: I have barely touched on the option of bankruptcy as an option for exit.

On May 25th, the Hungarian Government issued a decree requiring de facto approval of the Hungarian Government with respect to ambiguously defined “strategic” transactions whereby interests in Hungarian companies are acquired by foreign entities

We are in the midst of a global coronavirus pandemic, with worldwide GDP contracting substantially, creating a phenomenon of corporations issuing record amounts of new indebtedness

Forecasts for GDP decrease within the European Union in 2020 run as high as 13%, even after taking into account massive stimulation by Governments1.

M&A activity, both globally and in Central Europe, declined dramatically in Q1 2020

Despite the number of cases and deaths rising to approximately 1.8 million and 110,000 respectively, as at the time of writing of this article , there has been considerable good news on the coronavirus during the past week or two

After several weeks of extreme volatility, the most dramatic crash in the history of financial markets and partial recovery, where can we expect financial markets to go from here?

The number of COVID-19 cases has reached to 170,000 and total deaths rose beyond 6,5001 as at the time of writing of this article (March 16, 2020).

COVID-19 has taken approximately 3,000 lives to date, and infected approximately 90,0001 people in over 60 countries. This article is not about the humanitarian aspects of COVID-19

Factoring is a financing method in which a business owner sells accounts receivable at a discount to a third-party funding source, in order to raise capital

Impact investing, as the word “impact” implies, is all about investing to make a positive impact on the world, not only generating a financial return1.

If you have a company that produces or sells a product or service, the questions often arise as to (a) whether that company should own the premises or real estate which it occupies (e.g. offices, warehouse, plant, etc.)

Many small to mid-sized businesses have no need for a holding company. It may be sufficient for the company owner(s) to personally own shares or quotas directly in the company in question.

Recent irregularities in the US repo market may be early indicators of an upcoming recession, as was the case in 2008-2009 and before the dotcom crash of 2001.

Non-financial corporations can typically use two types of debt funding – bank loans and debt securities (e.g. bonds).

Dividend is usually discussed in the context of public companies. Like share buybacks, it is a way of putting cash back to shareholders.

Running a small business is arguably more difficult than running a large one. I have done both, and that has certainly been my experience.

The majority of corporate acquisitions are acquisitions of majority interests.

Our last article was on control premiums. Minority discount is basically the flipside of control premium

There are many reasons for using debt to finance an acquisition.

Our firm recently performed two valuations on a pharmaceutical company two years apart.

In a typical merger deal, the bidding company acquires the target company and the bidder’s existing shareholders obtain the majority in the combined entity.

This is the sixth and final article in a series on asset classes, which examines luxury goods as an alternative investment asset class.

When investing in equities, investors have two main choices: common stocks or preferred shares.  Whereas the previous article in this series dealt with common shares, this article focuses on preferred shares.

This is the fourth article in a series on asset classes, designed to demonstrate that even in today’s “low interest” environment, one can generate reasonable returns on a diversified portfolio.

We often hear comments about how little interest banks pay, or the low yield on certain treasuries. In our business of Mergers & Acquisitions, we have seen quite a few business owners who want to sell their businesses, but hesitate to do so

In our previous article, we gave an overview of the various asset classes, and typical risk/return relationships. In this article, we compare the liquidity and trading volumes of these asset classes.

This is the first of a series of articles on asset classes. Whether you are an individual managing a portfolio for retirement, or someone who just sold their business and devising a strategy to invest funds, the choice of asset classes will be the most fundamental investment decision you make in designing your portfolio.

Let me start this article with a quote by Ludwig von Mises, famous economist of the Austrian School of Economics, on the subjects of credit expansion and economic cycles.:

Part I of the series tackled the value of gold as a portfolio hedge. This article, Part II of the series, will discuss the very limited stock of gold within the world

The world is a much riskier place than most people realize. A very incomplete list of just some of the possible risks in the global geopolitical system include:

Total global debt levels have reached a whopping $247 trillion as of 2018 – up from $164 trillion in January 2009 1, the time of the last financial crisis. That’s up from 213% to 318% of global GDP 2:

Whether you’re a business person or an ordinary citizen concerned about what’s going on in the world, the yield curve is something you should care about.

Owners and managers of businesses always have the option of financing a business by way of either debt or equity

A condition precedent (CP) prior to closing is a condition that must be satisfied by a party to a transaction, failing which the other party is not bound to close the transaction

“Drag Along” and “Tag Along” rights are used by investors to facilitate their exit from an investment. They are methods particularly favored by private equity firms

Non-core assets may greatly complicate raising equity financing, finding strategic or financial partners, or selling a business.

Business owners often ask themselves whether they need a business valuation, and if so what kind of valuation is required.

When negotiating the purchase or sale of a company, the investor or purchaser will often insist on what is known as a Material Adverse Change (MAC) clause. This article deals with three issues related to the MAC clause

Business owners often ask themselves whether they need a business valuation, and if so what kind of valuation is required.

Everything has its risks, even getting out of bed in the morning. But that is no excuse for not getting out of bed at all…