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Wealth Gap And The Road To Serfdom
Wealth Gap And The Road To Serfdom One of the most interesting conundrums is the surging wealth gap in America. Despite two of the largest bull markets in history since 1980, most Americans struggle with making ends meet and are unprepared for retirement. Such a reality starkly differs from the belief that rising asset prices […]
Monetary Policy. Is The Fed Trying To Wean Markets Off Of It?
Monetary Policy. Is The Fed Trying To Wean Markets Off Of It? Is the Fed trying to wean the markets off monetary policy? Such was an interesting premise from Alastair Crooke via the Strategic Culture Foundation. To wit: “The Fed however, may be attempting to implement a contrarian, controlled demolition of the U.S. bubble-economy through interest rate […]
One Monetary Policy Fits All – Part II
One Monetary Policy Fits All – Part II In Part one of this series, Our Currency The World’s Problem, we discuss the vital role the U.S. dollar plays in the global economy. With an understanding of the dollar’s role as the world’s reserve currency, it’s time to discuss how the Federal Reserve’s monetary policy machinations influence […]
The Biggest Crash In History Is Coming? Kiyosaki Says So.
The Biggest Crash In History Is Coming? Kiyosaki Says So. Robert Kiyosaki recently tweeted, “The best time to prepare for a crash is before the crash. The biggest crash in world history is coming. The good news is the best time to get rich is during a crash. The bad news is the next crash will […]
A 50-Percent Decline Will Only Be A Correction
A 50-Percent Decline Will Only Be A Correction A 50-percent decline will only be a correction and not a bear market. I know. Right now, you are thinking, how could anyone suggest a 50-percent decline in the market is NOT a bear market. Logically you are correct. However, technically, we need an essential distinction between […]
Potemkin Economy: Costs & Consequences
Potemkin Economy: Costs & Consequences A Potemkin economy has lured the Fed, economists, and Wall Street analysts into a potentially dangerous assumption of economic normalcy. However, with a review of how we got here, we can better understand the costs and consequences of monetary interventions. “In 1783, after the Russian annexation of Crimea from the Ottoman Empire and the […]
Could The Fed Trigger The Next “Financial Crisis”
Could The Fed Trigger The Next “Financial Crisis” Could the Fed trigger the next “financial crisis” as they begin to hike interest rates? Such is certainly a question worth asking as we look back at the Fed’s history of previous monetary actions. Such was a topic I discussed in “Investors Push Risk Bets.” To wit: “With the entirety […]
How Durable Is The Potemkin Economy?
How Durable Is The Potemkin Economy? “Increased borrowing must be matched by increased ability to repay. Otherwise, we aren’t expanding the economy – we’re merely puffing it up.” – Henry Alexander of Morgan Guaranty Trust The original Potemkin Village dates to the late 1700s. At that time, Russian Governor Grigory Aleksandrovich Potemkin constructed facades to hide […]
History Warns The Fed Will Raise Interest Rates More, Not Less
History Warns The Fed Will Raise Interest Rates More, Not Less History Warns The Fed Will Raise Interest Rates More, Not Less “Currently, the December 2019 Fed Funds futures contract implies that the Fed will reduce the Fed Funds rate by nearly 75 basis points (0.75%) by the end of the year. While 75 basis […]
What is the Federal Reserve Hiding From Us?
What is the Federal Reserve Hiding From Us? “The most inappropriate monetary policy that I’ve seen maybe in my lifetime.”- Paul Tudor Jones on the Federal Reserve via CNBC The Federal Reserve has three mandates per their Congressional charter. They are to effectively promote maximum employment, stable prices, and moderate long-term interest rates. The Fed […]
The 5000-Year View Of Rates & The Economic Consequences
The 5000-Year View Of Rates & The Economic Consequences The fact we have the lowest interest rates in 5000-years is indicative of the economic challenges we face. Such was a note brought to my attention by my colleague Jeffrey Marcus of TPA Analytics: “BofA wants you to know that ‘Interest rates haven’t been this low […]
Markets Next “Minsky Moment”
Technically Speaking: The Markets Next “Minsky Moment” In this past weekend’s newsletter, I discussed the issue of the markets next “Minsky Moment.” Today, I want to expand on that analysis to discuss how the Fed’s drive to create “stability” eventually creates “instability.” In 2007, I was at a conference where Paul McCulley, who was with PIMCO at the time, discussed the idea […]
Two Pins Threatening Multiple Asset Bubbles
Two Pins Threatening Multiple Asset Bubbles “Powell Says Fed Policies “Absolutely” Don’t Add To Inequality” -Bloomberg May 2020 The headline above is but one of countless times Fed Chairman Powell and his colleagues confidently said their policies do not result in wealth or income inequality. Their political stature and use of complex economic lingo give […]
What Interest Rate Triggers The Next Crisis?
What Interest Rate Triggers The Next Crisis? The Ten-year U.S. Treasury note yields 1.61%. 10-year high-quality corporate bonds yield 2.09%. The rate on a 30-year mortgage is 3.05%. Despite recent increases, interest rates are hovering near historic lows. We do not use the word “historic” lightly. By “historic,” we refer to the lowest levels since […]
Plus ça change: A French Lesson in Monetary Debauchery
Plus ça change: A French Lesson in Monetary Debauchery Fiscal policy shifted into turbo-charged, warp speed, overdrive early into the COVID related recession. To facilitate the borrowing binge, the Federal Reserve took unprecedented monetary actions. In 2020, the fiscal deficit (November 2019- October 2020) rose $3.1 trillion and was matched one for one with a […]
