26 Oct 2016

Latest Lara-Murphy Show Defines Basic Terms

Lara-Murphy Show 1 Comment

In response to a listener request, Carlos and I define/discuss basic terms like “Treasuries” and “yield curve.”

Also, if you want comp’d tickets to the Nov. 5 Mises Circle event in Fort Worth, contact me (soon).

One Response to “Latest Lara-Murphy Show Defines Basic Terms”

  1. Tel says:

    I liked the episode, the only quibble is that although highly liquid assets (such as cash) are stable in NOMINAL VALUE during a crisis, they aren’t necessarily stable in terms of real value.

    Many recessions have a deflationary aspect to them, so holding a wad of cash is actually going up in real value as prices go down. Same if you are holding a Treasury bond of the right duration (e.g. the deflationary period could be two years so if you owned a Treasury that matured at the end of that deflationary period, you have made a profit in real terms but not in nominal terms).

    The opposite can happen if an economy hits stagflation, or if people lose faith in the currency… then prices go up and you would be better off with a tangible asset like a house or a bar of gold. Also, gold is kind of a special case, since the price of gold can be volatile in a way that is counter to what other assets are doing.

    If you own a car and you need a car because it’s useful to you then regardless or the economy, the real value of that is one car.

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