I just came up with a model so elegant that it can be explained in a few minutes to just about anyone, but so powerful that it provides a compelling explanation of just about every major macroeconomic issue: Why depressions happen, how debt works, and what causes inflation. It’s so incredibly simple I at first thought I had to be missing something… but upon reflection, I don’t think I am. We had simply blinded ourselves with unnecessary complexity.

The model has four people in it (which you ca...