Deflation or Inflation?

A question I’ve received frequently the last couple months from many different people is about the potential for inflation given the unprecedented response to the Novel Coronavirus Pandemic. It is an important question because it impacts the best investment approach going forward as well as other personal finance decisions.

I understand the rationale behind the question. After all, trillions of dollars have been pledged between the Federal Reserve and the U.S. Treasury in the last few months in what essentially amounts to a “helicopter drop” of money on the economy. So, it is understandable that people are beginning to have concerns about the potential for inflation.

Ultimately, I believe we will get inflation mainly because the Federal Reserve will stop at almost nothing to make it happen, HOWEVER, we must allow for the possibility of getting deflation first. Continue reading “Deflation or Inflation?”

China and U.S. Treasuries…What was this morning’s news all about?

This note was first published to my email subscribers on 1/10/2018.

Early this morning, at 4:26 AM CST to be exact, Bloomberg broke a story that senior officials in the Chinese government are considering reducing or halting purchases of U.S. Treasury Bonds. This caused stock futures to drop, USD to drop, and bond yields to spike (i.e. bond prices to fall) before the open.

So what is this all about and why is it such a big deal? Continue reading “China and U.S. Treasuries…What was this morning’s news all about?”

Podcast: The Irony of Jamie Dimon’s Recent Comments on Bitcoin

Today, I’m trying something new. Instead of writing a commentary, I’ve recorded a podcast. This will allow you to access my perspectives while driving in your car!

Recently, Jamie Dimon called Bitcoin a fraud. While I don’t agree it’s a fraud, I do want to comment on the irony of his comments regarding cryptocurrencies as those comments pertain to the U.S. Dollar.

Take a listen and please share if you find this podcast interesting!

“Gold is the money of kings…but debt is the money of slaves.” U.S. National Debt Tops $20 Trillion.

 

“Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.”

– Norm Franz, Money & Wealth in the New Millennium

“The consequences arising from the continual accumulation of public debts in other countries ought to admonish us to be careful to prevent their growth in our own.”

– John Adams, First Annual Address to Congress

 Executive Summary

  • U.S. national debt tops $20 trillion for first time after debt ceiling is suspended again.
  • Interest on the national debt is half a trillion dollars even with historically low interest rates.
  • The national debt is a burden on ourselves, children and grandchildren essentially enslaving future generations as we put them on the hook for our profligacy.
  • The national debt also acts like an anchor dragging on economic growth.
  • Potential solutions (good and bad) include reduced spending, higher taxes, money printing or outright default.

Continue reading ““Gold is the money of kings…but debt is the money of slaves.” U.S. National Debt Tops $20 Trillion.”