Myrmikan Capital LLC

Introduction

Ecclesiastes tells us: “The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun.” Myrmikan Research applies this principle to the subject of credit bubbles.

The ancient Greeks discovered that debt could magnify wealth. The debtor feels richer from the use of the borrowed property, while the lender feels richer from the compounding interest yielded by his claim. As long as the accumulating claims remain contingent, the bubble grows. But, eventually, someone asks to be paid, and the expanding claims on wealth must be reconciled to tangible wealth: this is the financial crisis.

Threatened with a civil war of creditor versus debtor, Solon, the archon of Athens in 594 B.C., pulled down the mortgage stones, freeing the debtors, and devalued the drachma by 27% to relieve the bankers. Every credit collapse since – from the Panic of A.D. 33 to John Law’s Mississippi Bubble to the Great Depression – has followed Solon’s template of debt default and currency devaluation.

“Every collapse of a credit expansion is a bankruptcy, and the magnitude of the bankruptcy will be proportionate to the magnitude of the debt debauch. In bankruptcies, creditors must suffer.” – Freeman Tilden, 1936

Myrmikan Research chronicles the collapse of the current, global credit bubble – the largest and broadest in history – analyzing current events from the perspective of Austrian economics and placing them in historical context.

Samples

Gold's Mid-Cycle Correction
July 11, 2013

QE7: Incoherence at the Fed
Dec. 18, 2012

Gold Share Reflexivity
Aug. 14, 2012

Waiting on a Snowflake
Jul. 12, 2012

Drawdowns: On Volatility
Apr. 12, 2012

Capital Loss
May 12, 2010

Research Reports

Something Wicked This Way Comes
A re-examination of Hayek’s theme that economic planning necessarily leads to dictatorship.
May 6, 2012

Liquidity: Gold’s Role in the Monetary System
A comprehensive analysis of why the free market always chooses gold as money and the consequences of an illiquid central bank.
Dec. 15, 2011