Edwin Economics was founded in June 2017 by me, Jay Edwin. I started this site after writing my first book, The Economics of the Economy. The book was initially inspired by a video series called The Hidden Secrets of Money by Mike Maloney, that I stumbled upon last year on YouTube. This led to months of intense research where I began to question everything I learned at school – and I didn’t just go to some mickey mouse college – I studied Economics at The Australian National University and my lecturer at London Business School where I later completed my MBA was an advisor to the European Central Bank during the 2008 financial crisis no less. With this caliber of education, I should have understood the economy much better than I did, but the more I researched, the more I began to question everything I was taught.
I revisited texts from Classical, Austrian and Keynesian economics, as well as the more recent work of Milton Friedman, Friedrich Hayek, Murray Rothbard and Hyman Minsky. Then there are the gold bugs; Ron Paul, Peter Schiff, Jim Rickards and Mike Maloney, as well as other great modern thinkers such as Professor Steve Keen, Martin Armstrong, legendary investor Jim Rogers and a host of others.
But what to do with such a list of brilliant minds that all propose different ideas?
Most people tend to identify with a particular ‘school’ of economic thought, but I found myself agreeing with all of them to a certain extent, within a limited context of application. For example, the Austrians in my view have the best understanding of the economy in terms of business cycle theory, but their laissez-fair ‘solution’ to deal with financial crises is unnecessarily harsh on the economy. Keynesians in my view are right about the necessity of government intervention, but their homogeneous approach to the public and private sector only makes things worse. Professor Keen offers the most astute thinking in terms of solutions as he recognizes that private debt is the real cause of today’s issues, but even ‘people’s QE’ (printing currency and giving it to people to pay off their debts rather than using it to prop up the banking system) is only a temporary solution at best, as the structure of the economy (or more specifically the banking and financial system) is flawed.
That brings us to the ‘gold bugs’ who advocate that we should bring back the gold standard. This idea is shunned by the majority of mainstream economists who claim there isn’t enough gold to go around, pointing to failed variations of the gold standard in the past as evidence, and they are right given the structure of our current financial system. But as I contend in the book, the structure of the economy itself is the fundamental cause of the issues we face today, and unless this is addressed, the economy will remain unstable.
Under a restructured economy in which the government, not the banking system, is the issuer of all sovereign currency, gold can have an important and stabilizing role in the monetary system. This is discussed as part of a thought experiment in the final chapter of the book.
One way or another, this will need to be addressed in the near future as the global economy is on an unstoppable collision course that will very likely reach impact in the next 18 months. This is nothing new; doomsayers have been warning of an economic apocalypse for decades, but the accuracy of their predictions is invariably overshadowed by the inaccuracy of their timing. They were almost vindicated in 2008, but doubling global debt delayed the inevitable. This time, traditional economic solutions will be certainly be inadequate.
The timing urgency of the next global financial meltdown prompted me to share The Economics of the Economy in PDF form online immediately to share my research and consolidated view of economic thinking. I hope to spread the word so that those who read my work can be better prepared for the rough ride ahead. I offer no financial or investment advice, just a common sense view of the economy and where we need to go from here.