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I was chatting to my brother-in-law yesterday, and we were both reflecting on how sadly governments and central banks will most likely not do the right thing when the time comes. The time came many years ago, and they failed. We have many years of history to support this claim.

I write the note below with President Milei from Argentina in mind, who is doing the right thing. However, in his case, he isn’t a world superpower with the peso as the worlds reserve currency. Before I get to the Emperor Tiberius we would do well to remember how Mario Draghi famously said in 2011, “whatever it takes.”

When government debt balloons to levels that inevitably debase purchasing power, you would expect central banks—the guardians against inflation—to act responsibly, raising rates and draining excess liquidity. Yet history shows that the temptation to intervene, even with the best intentions, often trumps the harder medicine of austerity. Rather than removing the punchbowl when the party gets out of hand, authorities usually refill it, buying time but planting the seeds of bigger crises.

Consider Rome in 33 AD, at the height of its empire. Trade spanned continents, the denarius was the reserve currency of the known world, and Rome seemed invincible. But beneath the prosperity, speculation festered. Senators borrowed cheaply, leveraged real estate, and multiplied loans atop loans. Tiberius, known for his frugality and suspicion of excess, tried to impose discipline: he revived an ancient law from Julius Caesar’s time requiring creditors to place two-thirds of their capital in Italian land. The intent was noble—support agriculture, reduce speculation, and redirect capital into “productive” uses—but the effect was disastrous. Creditors called in loans to comply, borrowers sold en masse, and Rome’s property market collapsed.

Facing panic and a frozen credit system, Tiberius abandoned austerity and turned to rescue. He injected 100 million sesterces into the banks on generous terms—arguably history’s first quantitative easing. The move thawed markets but set a precedent: even the most austere ruler would bail out the system. From Rome to 2008 to COVID, the same pattern repeats—leverage builds, panic hits, and governments print. Short-term stability is saved, but moral hazard deepens. For investors, the lesson is timeless: inflation is always the chosen cure, and real assets are the safest harbor.

This is the sad takeaway: even logical attempts to thwart the problem don’t solve the problems when the problem is addiction. I want to say that the best place to invest for the increased inflation is real estate, but I don’t think so for now. Before inflation continues to inflate home prices, there is going to still be a correction when people lose their jobs and are forced to sell because they cannot service their mortgages. I maintain that gold should be a decent portion of your portfolio to protect against the devaluation of the purchasing power of the dollar and many other currencies. The time to speculate or invest further in real estate will come from significantly lower price levels.

Quietly, Ethereum has dropped 14% recently. Looks like a very interesting double top.

The Nikkei is on track for its 6th up month in a row. Only its 13th time in 50 years.

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