Crescat Capital: The FED Is Trapped

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The year is just getting started and the US fiscal deficit already reached another record, now at its worst level in 70 years. The Fed is facing its worst predicament yet. The current fiscal spending path will lead to record Treasury issuance this year. Foreign investors are unlikely to be the ones funding this operation. With 2020 as a guide, there are no buyers of any size for those securities outside of US banks and the Fed. Major foreign holders of US debt only bought about 5.2% of all Treasuries issued last year. In the face of this enormous new government debt issuance, the Fed faces the impossible task of continuing to prop up already historic asset bubbles while also preventing inflation. The current extreme fiscal imbalances put the central bank on a crash course to fail at both.

For many reasons, the path of least resistance at this stage in the economic cycle is indeed the inflationary one. After years of underinvestment in the basic resources of the “old economy”, the world is facing commodity supply shortages. When combined with the fiscal stimulus driven boost in demand, hard assets are already starting to catch fire. A commodity boom is contributing to reflexive macro inflationary pressures, including investment demand for inflation protection, as well as rising industrial demand in a fiscal stimulus driven economy attempting to both recover from Covid and transition to a cleaner, greener economy. Rising inflation starts with rising basic materials, energy, and agriculture prices. The recent 12-year breakout in commodities is rock solid.

MacroVoices: #256 Russell Napier: Prepare for Secular Inflation

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How are stocks rallying to new all-time highs amidst the ongoing pandemic?

Stimulus into real economy – will this still support the stock market?

How far Bond Yields could go

Financial repression and inflation outlook

Inflation may be good in the beginning but for how long?

Benefits of inflation on the stock market

Perspectives on commodities including Copper and agriculture

Gold vs. Bitcoin

Is there a strategy to evade financial repression?

Frank Holmes: Closing the Gold Window Opened the Door to Modern Monetary Theory (MMT)

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The drawback is that, in the years since the end of the gold standard, there’s been a significant and growing lack of discipline when it comes to government spending. Before 1971, there was a natural limit to how much money could be printed. New issuances were dependent on the amount of gold sitting in the nation’s coffers.

Today, with the dollar backed not by a hard asset but by the “full faith and credit” of the U.S. government, the federal debt is closing in on an astronomical $28 trillion, which is more than 130% of the size of the U.S. economy.

Grant Williams: The End Game Episode 14- Paul Singer

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Bill and Grant welcome Paul Singer, Founder, President, Co-Chief Executive Officer, and Co-Chief Investment Officer of Elliott Investment Management L.P.

Among the topics covered in this extremely rare and endlessly fascinating conversation are Paul's thoughts on the importance of understanding markets are little more than mass experiments in psychology, the fallacy of 'sitting passively', the creation of value for clients and the corner into which the Fed and other central banks have painted themselves.

Macrovoices: #254 Luke Gromen: The FED Faces No Easy Choices

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• Is this the beginning of the end for the U.S. dollar as the global reserve currency?

• Relative decline to other fiat currencies or loss of purchasing power?
• Democratic control of the Senate – how does this affect yields?
• When will deficits start to matter?
• How do you translate the current state of the dollar into investment strategies?
• Bitcoin vs. Gold

• Are we finally at a point of runaway wage & price inflation?

Louis Gave: Inflation Will Come Back With a Vengeance

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Yes, I think inflation will come back with a vengeance. One of the key deflationary forces in the past three decades was China. I wrote a book about that in 2005; I was a deflationist then, as my belief was that every company in the world would focus on what they can do best and outsource everything else to China at lower costs. But now, we’re in a new world, a world that I outlined in my last book, Clash of Empires, where supply chains are broken up along the lines of separate empires.

 Let me give you a simple example: Over the past two years, the US has done everything it could to kill Huawei. It’s done so by cutting off the semiconductor supply chain to Huawei. The consequence is that every Chinese company today is worried about being the next Huawei, not just in the tech space, but in every industry. Until recently, price and quality was the most important consideration in any corporate supply chain. Now we have moved to a world where safety of delivery matters most, even if the cost is higher. This is a dramatic paradigm shift.

Sam Zell: The Single Greatest Risk' Facing Americans Could Hit Within Decade

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“The single greatest risk that we are dealing with today is the loss of the U.S. dollar as the reserve currency,” Sam Zell, the founder and chairman of Equity Group Investments said in recent RealVision interview.

“If we keep doing what we are doing right now, I think it is 10 or 15 years away,” he was quoted by MarketWatch as saying.

“A 25% reduction in our standard of living” could take place if the dollar loses its reserve status, which he says is a very real possibility, he said.

“Unlimited debt and irresponsible activity don’t lead to positive outcomes,” the billionaire real-estate mogul added. “That’s a disastrous kind of scenario.”

MacroVoices #250 Kyle Bass: Commodity Bull Market, Inflation & Singapore

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All-time highs despite the pandemic – are we shifting into a new paradigm?

Impending inflation and how to trade it 

Is gold still the best hedge against fiat debasement?

Is the bond bull market finally done and are we headed toward negative yield?

Negative yields in Europe – will this recover as inflation begins?

How will Biden administration change the macro outlook?

Implications of electrification of the economy

Will Singapore be replacing Hong Kong as the financial center in Asia?

Perspectives on crypto currencies

Ronald Stöferle: Inflation special report

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Our special report on inflation is finally out. Inflation is quickly becoming one of the main topics of due to the events which have especially unfolded this year. A whole arranges of topics and factors play into it, and we took the time to unpack them all. 

Every regime has its paradigm. For the past 40 years it has been a deflationary paradigm. Inflation was to be killed and this can be seen in many articles and publications. The symbol was the defeat of stagflation in the early 80s. All of this has now undoubtedly turned to inflation.

Russell Napier: Central Banks Have Become Irrelevant

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The Scottish market strategist Russell Napier warns that investors should prepare for inflation rates of 4% and more by next year. The main reason: Governments have taken control of the money supply.

In the years following the financial crisis, numerous economists and market observers warned of rising inflation in the face of the unorthodox monetary p0licy by central banks. They were wrong time and again.

Russell Napier was never one of them. The Scottish market strategist has for two decades – correctly – seen disinflation as the dominant theme for financial markets. That is why investors should listen to him when he now warns of rising inflation.

"Politicians have gained control of money supply and they will not give up this instrument anymore", Napier says. In his view, we are at the beginning of a new era of financial repression, in which politicians will make sure that inflation rates remain consistently above government bond yields for years. This is the only way to reduce the crushing levels of debt, argues Napier.

Kevin Muir: MMT, Inflation, Stock Market Bubble, Japan

 

Ray Dalio "The US Dollar Is At Risk" - What Investors Should Do

 

Ray Dalio is the original founder and as of recently former CEO of Bridgewater Associates, which is currently the largest hedge fund in the world. He's known for his macro economic expertise, and as the pioneer of risky parity investing, an investment strategy that focuses on diversifying according to risk rather than asset class. In a recent Ray Dalio interview, he talks about the current state of the economy and what is to come. Dalio explains that the dollars role as the Global Reserve Currency is at risk. Ray Dalio explains the different types of monetary policy used in the past, present, and what will likely be done in the future. He then shares his opinion on the markets, and provides investors with some ideas for investing in the coming months and years. Ray Dalio speaks about inflation, deflation, and how different economies will react moving forward. If you're worried about inflation, market volatility, or a full on market crash, this is an interview you don't want to miss. Ray Dalio is a true genius inside and outside of the investment world, and his insights on the stock market, equities, bonds, cash, and gold is unlike anyone else in the mainstream financial media.