Marion King Hubbert, a geologist who worked for Shell, posited in a 1956 paper that US oil extraction would peak between 1965 and 1971. He did not anticipate deepwater drilling, fracking, horizontal drilling, and the US shale revolution. Working with linear models, he failed to account for human ingenuity in a non-linear world. His Peak Oil theory has since been discredited (obviously) but the use of linear models to extrapolate the future continues to hold sway in the analys

Originally published in TDV May 2021 Issue and edited for clarity Inflation is Coming Here The April CPI rose 4.2% year-on-year as against the forecast of 3.6%, while core CPI (excluding energy and food) printed 3%, as against the forecast of 2.3%. As we mentioned in the options trade update, the increase in the CPI rate was the fastest since September 2008, while the monthly gain in core inflation was the largest since 1981. This print should come as no surprise. Ed has been

Can interest rates be negative? If you had asked any mainstream economist that question a decade ago, the answer would have been no. He might even have looked at you as if you needed to have your head examined for asking such a question, which goes contrary to all his theories. If you had asked an Austrian economist the same question, he would have first examined it in the context of the time preference theory of interest rates, and answered no. While he would have been flumm

What is the interest rate? Is it something that the RBI sets, or is it something inherent to the economy? If the latter, how does it originate? These are tricky questions, but understanding this key concept is particularly important for an income investor. The interest rate of an economy is simply the price spread in the production structure. That statement seems to be economist mumbo-jumbo, but bear with me for a while and it will start to make sense. Let’s dissect it in par