Not so long ago, families, businesses and governments were effectively living in a world of free money.  The US Federal Reserve’s benchmark interest rate was zero, while central banks in Europe and Asia even ran negative rates to stimulate economic growth after the financial crisis and through the pandemic.

Those days now look to be over and everything from housing to mergers and acquisitions are being upended, especially after 30-year US Treasury bond yields this week punched through 5% for the first time since 2007…

~ Bloomberg, October 5, 2023

Nobody could have predicted the Treasury market’s collapse of the last two years — apart from every critic of artificially low interest rates since John Locke.

There is only one true law of history, and that is the law of unintended consequences.

~ Niall Ferguson, October 2023

Editor’s Note: This is Volume II, Issue VIII of The Macro Value Monitor. To listen to The Macro Value Monitor, click on the headphones icon in your Substack app.

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The intellectual legacy of John Locke spreads to nearly every corner of modern western society. An enlightenment thinker, an empiricist, as well as a physician, his published works inspired everything from our theory of knowledge and the mind to the basic rights outlined in our Declaration of Independence and our representative form of government. 

Not surprising for such an enlightened mind, he also had a few thoughts on the monetary crisis of his time.