Critics... Critics Everywhere

Sometimes people don't like it when you challenge what they've been told their entire lives... That's interesting... because I was told the exact same things they were told.

Dear Fellow Expat:

This week, I received a pretty interesting letter from a non-reader critiquing a piece of content I’d written about six months ago.

“You don’t seem to understand how the monetary system works…” it leads.

Oh… do go on… with an introduction like that.

What followed was a near regurgitation of the core parts of several financial, monetary policy, and economic courses I'd taken over the last 16 years.

Apparently, I didn’t understand what I’d read—even though everything I’ve read and learned I’ve largely questioned. That’s what I thought the purpose of science was…

Turns out… there’s a lot of gospel in finance and economics.

And you’re not allowed to challenge the experts…

So I received a full-throated dissertation on how Open Market Operations work… why the M2 is the single most important measurement in all of finance (even though Alan Greenspan stopped paying attention to it in the early 1990s), and that whatever I’d written appeared to be an affront to all that is holy about the central banking system.

I reply this: The critic has “proven my point.”

I studied the same books… have the same degrees…

Yet the last two decades have repeatedly proven to be a complete and utter failure of most theories and policies I’ve been shovel-fed by Ivory Towers.

The fact that I have an alternative view - is precisely the point of this outlet.

They can explain away their theories, or they can repeat the mainstream talking points of Wall Street and academia…

In my corner, I have this chart… timing the inflows and outflows of the S&P 500…

I combine this with Michael Howell, who seems to have offended traditionalists with his definitions of Global Liquidity and Insider Buying, to understand how and why money is moving.

I also watch central banks coordinate and engage in inventive, non-quantitative easing (QE) exercises that lead to outcomes similar to Quantitative Easing.

They always seem to come after that red hand signal happens… And it will all happen again as I expect the Fed to restart QE within 18 to 24 months.

When I finally get back to obtain my Doctorate, all of this will be neatly packaged… defended vehemently… and ultimately published in a journal or two.

I don’t need the validation… I write this each day because it interests me…

And because I’m aware that I’m onto something - even if it drives them nuts

I will stick with authors like Howell, Henning, Gray, and Pozsar… I take inspiration from people like Mark Skousen who challenged conventional economic metrics like GDP to tell the story of the tens of trillions of dollars flowing through supply chains.

All while I keep my head down while avoiding perpetual crisis after crisis…

Because traditional banking metrics have not explained the capital flows of the last decade…

The listed authors have been the ones that made sense to me… and just needed to be put together to deliver a track record of getting out ahead of selloffs and knowing when to signal the All Clear.

I continued my review of Howell this weekend, but I will publish it chapter by chapter on the FinPub site. There are other things that must be covered, but we’ll finish it up…

For a review of Chapter Six - please go here now.

Then, dive back into the previous chapters below in our Weekly Review.

• Chapter One

• Chapter Two

• Chapter Three/Four

• Chapter Five

Stay positive,

Garrett Baldwin