The Best of Pragmatic Capitalism 2021

Whew. What a year. Pragcap passed 50 million total page views this year. Crazy. I’ve stopped writing as much in recent years mainly because of some personal stuff and getting bogged down building a damn house, but I am hoping to get back to it more this year so stay tuned. In summary, here’s some of my favorite pieces from this year.

Best wishes in 2022. I hope it’s an amazing year for you.

• Hope is a great strategy. This was a really personal piece and not finance related, but one of the most important pieces I’ve ever written. I had no idea, but infertility is an increasingly common problem especially if you’re an idiot like me who waits until the geriatric age of 40 to start having kids. But there’s hope. There’s always hope.
• Is hyperinflation coming? In late October Jack Dorsey, former CEO of Twitter, made what I believe will go down as one of the all-time bad macro predictions when he declared that hyperinflation was coming to the US Dollar. Inflation has been the core focus of my career and I have a very good track record predicting it. This piece is my comprehensive rebuttal to hyperinflation predictions.
• Did Bitcoin kill gold’s monetary utility? This is a piece about a theory I’ve spoken of often over time – the theory that gold is a basic commodity, but has outperformed commodities due to demand from its monetary utility. But an important question has arisen as Bitcoin appears to be stealing demand from gold.
• RIP the money multiplier. One of the long running themes on this website is the debunking of the money multiplier and trying to understand banks and banking at an operational level. So I was delighted to finally see the Federal Reserve come out and officially debunk a concept most of us learned in finance and economic classes.
• Why the “age in bonds” rule is wrong. This was one of my personal favorite pieces of the year because it has specifically actionable advice and guidance for people allocating assets near and around retirement. In short, don’t over allocate to bonds unless you need a cheap form of term insurance around retirement.
• Does a 100 vol asset belong in retirement accounts? 2021 was an explosive year in the cryptocurrency markets. And an increasingly common question I am getting is whether someone should hold Bitcoin and other super volatile assets in a retirement account? The answer, of course, is it depends.
• Is all of finance just a network effect? The rise of NFTs, the Gamestop phenomenon and all the other craziness in markets has people questioning fundamental analysis and traditional asset pricing models. It has a lot of us wondering if all asset pricing is about network effects and little else?
• Let’s talk about assflation. “Asset inflation” is a common theme among market participants these days. In this piece I go into some of the operational mechanics behind QE and why I tend to believe the “asset inflation” narrative is overstated.