The central banks of the world seem to have cottoned on that there are no negative numbers. In fact all they seem to have discovered a new mathematical ability. They can create more and more new money out of nothing. In mathematical terms: Let x = the amount of new money the Central Bank wants to create and E = existing money supply. Let * = a new operation to create money from nothing. Then E = E + x*. This is more like a line of code in a program than mathematics. It’s a bit like the apple tree which produces new apples every season. Let’s hope the new Central Bank money does not end up rotting on the ground like the apples from a poorly tended apple tree.
If I had realised that there were no such thing as negative numbers, I would have acted differently when I was young. As you can never have less than nothing, I would borrow as much as I could and speculate. If I lost it all, so what. I could go bankrupt and start again. Unfortunately, in my day it was very hard to get your hands on money. There was a thing called interest as well which made the cost of money expensive. There were also bankers who checked to ensure that you had a good chance of repaying your debt. Interest rates were at 0% when I initially wrote this. As Bob Dylan wrote ‘The times they are a-changing’.
People wonder why there are bubbles now. It is just that some investors have realised that there is no such thing as a negative numbers. These investors realise that they only have to succeed once with free money to make their fortune. They are facilitated by both banks and central banks. Of course, grumpy old men do not realise that there has been a paradigm change and that it is different this time.
Bob Dylan wrote ‘When you ain’t got nothing, you got nothing to lose’ in his Like a Rolling Stone song. He is right of course – you can’t go below zero.
