central banks Archives - Nicholas Mitsakos

May You Live In Interesting Times

Jul 20, 2022Nicholas MitsakosArticle, Public Policy, The Marketcentral banks, economic growth, economic policy, inflation, interest rates, Public markets, public policy, the Fed, Uncertainty, Unpredictability, valuation, volatility

Risk is higher. Markets are more unpredictable, and valuations more volatile. So, when anyone says “this time it’s different” it usually makes good sense to stop listening. However, these days the markets have given us more frequent and intense volatility. The NASDAQ is down almost 30% so far this year, and shocks from the pandemic, the Ukrainian war, massive central bank interest-rate maneuvers, and China’s zero-covid policy, are all ongoing inputs for turmoil that will continue for some time. Persistent uncertainty creates higher costs of capital and less affordability, weakening business investment, slowing GDP growth, and reducing investment returns. Hyperbolic “this time it’s different” statements are turning out to be true. This time days look darker, uncertainty greater, economic growth lower, vulnerability to additional shocks higher, and investors fear many more dark days to come. More frequent and intense volatility will not be calmed anytime soon. It really may be different this time.

Sweltering, Chills, and Discontent

Jul 18, 2022Nicholas MitsakosArticle, Class Material, Inflation, Investment Strategy, Public Policycentral banks, china, economic growth, energy, Energy block, energy policy, Geopolitics, India, inflation, Interest-rate policy, investment strategy, natural gas, public policy, russia, Turkey, volatility

While most of Europe and the United States suffer sweltering heat, darkening economic skies and bitter winter of discontent are looming. Threats to the world economy are chilling. Rising interest rates are slowing activity for discretionary spending while rising prices for nondiscretionary spending are also slowing economic activity. It would be miraculous if the compounding of both effects would not lead to a recession in both Europe and the US. China’s growth has stalled. The Ukraine conflict will resolve itself to the West’s dramatic disadvantage and the West seems to be willing to let it happen – much to each economy’s long-term disadvantage. Don’t count on anything miraculous.

Digital Assets – Technology of Freedom?

Dec 9, 2021Nicholas MitsakosAdvanced Technology, Book Chapter, Investment Strategy, Transformative BusinessesBitcoin, central banks, Central governments, decentralized finance, digital assets, digital currency, disruption, finance, Freedom, government policy, innovation, investment strategy, public policy, technology, transformation, valuation, volatility

Digital assets are disrupting finance – the world’s largest industry. All assets, intellectual property, and even currency can now be digitized, and anyone can access anything from anywhere. The finance industry is being this intermediated and globalized, economic development and policy will be forever changed.

Lessons on inflation

Nov 6, 2021Nicholas MitsakosBook Chapter, Inflation, Investment Strategy, Public Policycentral banks, corruption, fiscal policy, government policy, inflation, investments, irresponsibility, risk, valuation, volatility

Central bank independence and fiscal responsibility matter, even though the Western world is acting as if these rules no longer apply. Well, perhaps. But the world has given us three examples where the consequences are extreme when these basic foundations of economic policy are ignored or violated.

Nicholas Mitsakos

Investor, Entrepreneur, Writer, and Lecturer