August 17, 2018

Chinese Monetary Policy, Part 1: Transforming The World

Between 1990 and 2014, the People’s Bank Of China created RMB 28 trillion, the equivalent of more than US$4 trillion.  What the central bank did with that money turned China into an economic superpower, it caused global economic growth to accelerate and it pulled hundreds of millions of people out of poverty.  If the PBOC…
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August 1, 2018

Trade War Part 3: If China Fights Back

It is inconceivable that China would submit to President Trump’s demands that China reduce its trade surplus with the US by $200 billion per year.  If the United States imposes more trade tariffs on Chinese exports to the US, it is very likely that China will fight back. The final Macro Watch video in this…
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July 24, 2018

Trade War Part 2: If China Capitulates

President Trump has threatened to impose trade tariffs on all $500 billion worth of goods that China exports to the US each year unless China submits to his demands to reduce its trade surplus with the US by $200 billion a year.  The new Macro Watch video, the second in a three-part series,  considers the…
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July 21, 2018

US-China Trade War: On The Brink

President Trump believes China poses a grave threat to the United States. His demands for trade concessions from China are designed to eliminate that threat. China cannot possibly meet those demands, however, since a large reduction in its trade surplus with the United States could cause the Chinese economy to spiral into a severe Depression….
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July 12, 2018

US-China Trade War Could Be A Turning Point In History

Last night I watched “Death By China” on YouTube.  If you haven’t, you should.  It’s free.  This documentary was made by Peter Navarro, the Director of the United States National Trade Council. Navarro believes China poses a grave threat to the United States.  President Trump agrees with him.  The Trump Administration’s demands for trade concessions…
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June 28, 2018

QE In Europe Is Ending – Beware

The ECB has announced that it plans to reduce its Quantitative Easing program from €30 billion per month now to €15 billion per month in October; and then to end QE altogether in December.  That is important because the ECB’s aggressive asset purchase program (which peaked at €80 billion per month) has pushed down interest…
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June 23, 2018

The Bank Of Japan Goes Ballistic

Ballistic is not a word normally associated with Monetary Policy. However, it is the ideal adjective to describe the conduct of Japanese Monetary Policy over the last five years. Japan’s monetary base has expanded three and a half times during that period.  The Bank Of Japan now owns 40% of all Japanese Government Debt. Its…
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June 2, 2018

The BOJ’s Radical Experiment

Monetary Policy in Japan is RADICALLY AGGRESSIVE.  Over the last five year, Japan’s Monetary Base has expanded by three and a half times.  The Bank Of Japan now owns 40% of all Japanese Government Debt.  The Bank’s total assets have reached 100% of Japan’s GDP. In a new two-part series, Macro Watch considers all aspects…
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May 3, 2018

Less Savings, More Debt, Increasing Vulnerabilities

Total debt in the United States increased by $2.6 trillion last year.   This year it will increase by roughly $2.9 trillion.  For every debtor, there is a lender.  The new Macro Watch video shows who acquired the new debt that was sold in 2017 and who is likely to acquire the new debt that will be…
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April 18, 2018

Weak Credit Growth Leaves The Economy Vulnerable

When credit growth is weak, the United States falls into recession. Between 1952 and 2008, there were only nine years when total credit (adjusted for inflation) grew by less than 2%. Each time, there was a recession. In 2017, total credit grew by just 1.9%. This was the first time credit growth has fallen below the 2% recession threshold…
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March 28, 2018

A 100 Year History Of Inflation Points To Trade War Calamity

Milton Friedman once famously said, “Inflation is always and everywhere a monetary phenomenon”.  It’s not.  The history of Inflation in the United States over the past century demonstrates that Inflation is not ALWAYS a monetary phenomenon.  Demand Shocks and Supply Shocks have frequently had an even greater impact on price movements than those caused by…
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March 14, 2018

The Money Revolution

In order to understand how the economy and the financial markets really work today, it is necessary to understand Money.  Not many people do.  In large part, that’s because Money today is not the same thing that it was 100 years ago – or even 50 years ago.   The new Macro Watch video explains…
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March 1, 2018

QT: The Pain Is Just Beginning

The Fed is running behind schedule. According to the Quantitative Tightening (QT) schedule it published last year, the Fed had intended to destroy $50 billion between October, when QT started, and the end of January.  It didn’t.  As of mid-February, the Fed has only destroyed $21 billion.  In fact, the Fed actually reversed course and…
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February 12, 2018

The Government-Induced Liquidity Crisis Could Crush The Markets

The combination of tax cuts and increased government spending – on top of Quantitative Tightening – is set to drain $3 trillion out of the financial markets over the next three years.  The United States has never had to endure a Liquidity Drain anywhere near that size before.  It is likely to drive interest rates…
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January 31, 2018

Rate Hikes, Quantitative Tightening and Their Consequences

The previous Macro Watch video explained the evolution of US Monetary Policy over the last century by analyzing changes in the composition of the Fed’s assets and liabilities between 1914 and 2016.   Today’s video examines how the Fed is conducting Monetary Policy now.  It also considers the impact that current Monetary Policy is likely…
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January 25, 2018

The Investors Podcast Interview – Highly Recommended

I recently spoke with Preston Psyh and Stig Brodersen for The Investors Podcast.  The feedback from this interview has been fantastic.  Preston and Stig ask excellent questions and allow plenty of time for meaningful answers. It is easy to understand why The Investors Podcast has developed such an enormous and devoted worldwide following. I strongly suggest…
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January 14, 2018

The History Of US Monetary Policy – Highly Recommended

It is not possible to understand how the economy and the financial markets work in the 21st Century without understanding how the government conducts Monetary Policy.  The first Macro Watch video of 2018 explains the past century of US Monetary Policy by analyzing the evolution of the Fed’s balance sheets between 1914 and 2016. The…
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December 14, 2017

Inflation Would Crush The Global Economy

The new Macro Watch video looks at the Credit to GDP ratio for each of the world’s twenty largest economies.  We find that credit has been growing faster than the economy for all of these countries for decades.  In other words, Credit Growth has been driving Economic Growth – not only in the United States,…
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