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The Vulnerability of Private Wealth to Government Financial Stress
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The Vulnerability of Private Wealth to Government Financial Stress
Tag Archives: Helicopter money
The Cats and Dogs of the Equity Markets
Driving the economy to fuller employment is a macroeconomic policy success. But it comes at a cost of higher employee costs and generally reduced profit and stock returns. Some firms, in this global economy, produce with foreign labor and benefit from weaker foreign currencies. Hence, there will be both purring cats and offsetting dogs in diversified portfolios. Investment returns call for targeting those firms gaining cost advantages via foreign labor. Continue reading
Posted in The Spellman Report
Tagged Diversification Unit labor cost, Economic Policy, Economy and financial market pricing, Full employment and profit, Helicopter money, interest rates, monetary policy, Political economy, Profit Margins, Reserve currency, Stock price returns, US Sovereign risk and investing, wealth preservation
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Manna from Heaven and Government Debt
Baby Boomer entitlements are now upon us with an acceleration in the government debt overhang. In a novel approach to debt containment, the European Central Bank pays high enough prices for existing debt to create a cash bonus to issuers of debt but with adverse incentives and unfortunate side effects.
We must conclude, the rules of propriety have changed regarding debt. We were naïve to believe that when governments borrowed they intended to tax in the future and retire debt. Instead reliance is being placed on the central banks to not just neutralize debtor governments’ debt but award governments a monetary subsidy to keep on issuing debt. Continue reading
Posted in The Spellman Report
Tagged Economic Policy, Economy and financial market pricing, Helicopter money, interest rates, Monetary Manna from Heaven, monetary policy, Negative Interest Rate Effects, Political economy, Reserve currency, US Sovereign risk and investing, wealth preservation
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Milton Friedman and the Monetarist Reflex: Can the Fed create inflation?
These are complicated times, especially when it comes to inflation. An excess of debt, both private and public, has retarded the spending stream, resulting in sluggish economic growth. Given the Fed’s legislated commitment to prevent financial implosion and unemployment, rounds … Continue reading
The Bond Market Rocket and Fiscal Unsustainability Are On a Collision Path
Recently, the bond market has been in rocket mode. It has achieved liftoff and slipped the surly bonds of earth. And some believe it will keep going. The price of the U.S. Treasury 10-year bond recently reached an all-time high, … Continue reading
Posted in The Spellman Report
Tagged AGG, BLV, Bond Market, Bond market valuation, Central banks and inflation, CLY, David Rosenberg, debt deflation, Fiscal and monetary policy, Fiscal sustainability, Fixed income investments, GLD, Gold, Government bond default, Helicopter money, Historic low interest rates, inflation, Inflation targeting, Milton Friedman, Monetarism, Monetary responses to fiscal policy, QE, Real return assets, TBF, The Fed, UBD, Unanticipated inflation, Velocity of money
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