Interest rates are too low because this video exists

🧠 The Big Brain
How to predict FX moves (and not be the 80% of losers)

We’re often asked why a currency pair has moved. The easy answer?

Duh. People buying and selling innit?

Always. But there’s a lot more going on…

The crucial question to ask is WHY those people are buying and selling.

The answers are in today’s Big Brain, and this lesson will stick with you for a lifetime…

Pro Premium Members: click here to read

Subscribe to Fink Pro to read the FULL Big Brain piece, every single day (30-day free trial, with Discord access!)

⚡ The Spark
We’re going to become a political party

We were asked how we’d run the UK if in power…

I’d like to call myself a benevolent dictator in all this…

But in reality, I just think it’s common sense.

Check out the Fink manifesto in the below Tweet.

Goal: what politicians seem to be missing is they do not have to try and raise wages nominally. No, they have to try and raise wages in real terms ONLY.

Ask yourself this question: what is my largest personal outlay each month?

For most people, they’re going to say their mortgage or rent!

So why not focus on fixing that issue?

What we have currently is a system which is built upon banks lending money to people at increasing amounts, which is then arbitrarily held in the ground…

When wages cease to catch up with the cost of living, we get a big old downturn and people have to sell up, reinforcing the problems.

Waterfall: this wealth effect built merely on debt being created is at the centre of the British economy (and many others, but let’s focus on Britain).

Land is valued at about £6.5tn… that’s 3x the GDP of Great Britain!

And most of the value of this land is simply funny money - debt on balance sheets…

Which we are servicing with wages, productively earned profits and in many cases, taxation.

If we want wages to go up, businesses to be able to invest and less boom and bust, we need to get out of the notion that taxing income and capital is good, but land speculation (which creates no value but causes the largest debt increases) is not ok.

Property ladder: the property ladder has to be one of the most insane concepts when you truly think about it.

So many fight tooth and nail to get onto it, when just 20-30 years ago, it was not THIS hard to do so.

But again, it is a function of increasing land speculation that has caused this.

Georgism: Have a watch of this video, and especially the top comments about Amazon.

It might spark something off in your head about how insane the current system is, but how relatively simple a change can be made to fix most of our issues…

💡 The Lightbulb
Interest rates are too low because this video exists

I logged on to Twitter (still won’t call it X) this afternoon and was faced, sadly, with the below Tweet…

I did in fact jump in front of a bus after this, and I am now writing to you from beyond the grave.

Because although last night Jerome Powell said that interest rates are now in restrictive territory, clearly they are not.

Help: Lord save us.

Crypto really does bring about some of the most cringe stuff constantly — who’d have thought that a Dragon’s Den Crypto Show would come to light?

Not me. Not with interest rates at 5.5%, anyway.

It begs the question whether we are indeed high or long enough yet?

And Stanley Druckenmiller reckons interest rates up here ‘can be a force for good.’

Creative destruction: we’re big fans here at Fink of the power that creative destruction has — when downturns occur, the crap is destroyed, leaving the strongest ideas or businesses.

See that’s pretty much what The Druck is referencing when he talks about ‘misallocation of capital’ and finally having a hurdle rate for investment…

It’s the idea of Joseph Schumpeter that innovation should in fact destroy and not just create new stuff.

Bottom line: higher interest rates cause less shit things to be funded by making the shit ideas less appealing by wrapping them in a plastic bag and chucking in the bin — rather than the low interest rate metaphor of wrapping the steaming pile of crap in a nice bow.

And a crypto spin off of Dragon’s Den is just that.

A turd wrapped in a sparkly bow.

With sweetcorn inside.