June 5, 2019

The Yield Crash Signals Pain Ahead

The collapse in Government Bond Yields during May was a clear signal that investors are afraid the stock market may be headed significantly lower.  The flight to quality out of stocks and into bonds occurred because the outlook for corporate earnings is deteriorating rapidly due to the US-China trade war. The earnings outlook is deteriorating for…
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May 23, 2019

What Are Bank Reserves?

When the crisis of 2008 began, the Reserves that commercial banks hold in their accounts at the Fed soared from $21 billion in 2007 to $2.4 trillion in 2014.  Many commentators concluded that the Fed’s policies and Quantitative Easing, in particular, were not working because the QE money was just piling up in the commercial banks’…
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May 15, 2019

The US-China Trade War Heats Up

With the US-China trade war heating up, it is important to understand what is at stake. This blog post provides a list of the most important Macro Watch videos on this subject. Macro Watch subscribers can log in and watch them all now. Click on the “Video Index” Tab in the menu bar, then “Videos…
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May 9, 2019

Seigniorage: Simple, Short and $1.7 Trillion Sweet

The new Macro Watch video describes the enormous windfall profits the US Government and, therefore, US taxpayers earn as the result of Seigniorage every year. Seigniorage is the profit a government makes by issuing currency.  In the United States, the Fed issues the currency in the form of Federal Reserve Notes.  As it does, it is required…
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April 25, 2019

Looser Monetary Policy Will Be Required

As recently as 1969, US savings were sufficient to fund all US debt.  How things have changed.  Last year, the US had only enough savings to finance 22% of all its debt.  During the years between 1969 and 2018, the rest of the debt had to be financed through credit creation and money creation.   This year, total US…
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April 11, 2019

Expect Fed Rate Cuts This Year

Credit Growth drives Economic Growth.  But the United States doesn’t save enough to finance all that it borrows. It hasn’t for a very long time. To finance the credit growth that drives the economy, the US must rely on: Credit creation by the private sector,  Money creation by Fed, and  Capital inflows from abroad. Rising interest rates…
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March 28, 2019

Credit Growth, Asset Prices and The Fed

Between 1980 and 2008, Credit Growth drove Economic Growth.  The ratio of Total Credit to GDP soared from 170% in 1980 to 370% in 2008.   Since 2008, however, Credit Growth has been too weak to make the economy expand.  Rising asset prices have taken over as the new growth driver. The new Macro Watch video forecasts US credit…
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March 14, 2019

Alphabet’s World Changing “Other Bets”

In a recent video, we looked at Alphabet, the parent company of Google, along with the five other US tech giants. There we saw that Alphabet’s most famous products and platforms, including Android, Chrome, Gmail, Google Maps, Google Play, Search, and YouTube, each have over one billion monthly active users.  But there’s a great deal more…
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February 28, 2019

The Tech Giants: Part Two

This video is the second in a series looking at the largest US tech giants ranked by R&D Investment.   Part One covered Amazon, Alphabet and Intel. Part Two covers Microsoft, Apple and Facebook. Combined, these six companies invested $102 billion in Research and Development in 2018. Together, they form the core of a data-gathering ecosystem…
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February 19, 2019

The Tech Giants: Part One

The new Macro Watch video is the first in a two-part series examining the six largest US tech giants, ranked according to the amount they invest in Research and Development (R&D).  They are: Amazon Alphabet Intel Microsoft Apple, and Facebook This presentation looks at the Products and Services offered by each company across 15 categories: Search…
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February 12, 2019

Announcing A Course On Global Monetary Policy

Monetary Policy is now arguably the most powerful force driving the global economy and the world’s financial markets.   Central banks prevented a new global Great Depression following the Crisis of 2008 by creating the equivalent of nearly US$15 trillion, thereby QUADRUPLING the global Monetary Base.  The smallest adjustment in Monetary Policy impacts the price of…
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February 3, 2019

The Fed’s Historic Policy Shift

The Fed’s January 30th FOMC meeting produced one of the most consequential shifts in Monetary Policy that I can recall.  Rate hikes were put on hold.  Quantitative Tightening is to be ended much sooner than was expected.  And, a “Fundamental Decision” was made to change the way the Fed manages interest rates. This was an extraordinary and abrupt…
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January 15, 2019

R&D: The Future Depends On It

Investment in Research and Development (R&D) today will be a decisive factor in determining which companies and which countries dominate the future. The new Macro Watch video provides an overview of R&D in the United States. The video describes the kind of R&D currently being conducted, who is carrying it out and who is paying…
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January 3, 2019

Podcast: Our Once In History Opportunity

The global economy may well collapse into a new Great Depression.  But if it does, it will be due to policy mistakes, not because of some preordained “laws” set down by 19thCentury economists.   I recently spoke with Dr. Buck Joffrey, the host of the Wealth Formula Podcast.  We discussed the challenges facing the global economy in 2019…
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December 21, 2018

The Yield Curve Is Sending You A Warning

The inversion of the yield curve is considered to be one of the most accurate predictors of recessions.  It has inverted before every US recession since World War II.  It is very close to inverting again now.  Yesterday the yield on the 10-Year US government bond was only 9 basis points higher than the yield…
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December 13, 2018

Who Will Be Hurt By The US-China Trade War?

Tensions between the United States and China intensified last week when the CFO of one of China’s largest tech companies was arrested in Canada at the request of the United States.  Therefore, even though President Trump has pushed back his threat to increase tariffs on $250 billion worth of Chinese imports from January 1st to…
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December 5, 2018

A Particularly Good Interview

I recently had a particularly interesting conversation with Hunter Thompson, the host of the Cash Flow Connections Podcast.  I highly recommend it.   Please find the link to the podcast below. Topic discussed include: The Fed’s current extreme monetary policy tightening. A detailed explanation of how the Fed is now literally destroying $50 billion per…
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November 29, 2018

Investing In America

One of the most important things to understand about economics is that CAPITAL GROWS.  The Capital Stock of the United States increased 60-fold between 1952 and 2017, from $1 trillion to $60 trillion.  Not only does Capital grow, it evolves and becomes more complex.  As it does, it transforms the way people live and the…
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November 7, 2018

The Capital Structure Of The United States

Capital, when combined with labor and natural resources, generates income.  If that income is saved and invested, it generates more income. Therefore, it is important to understand a country’s Capital Stock because that, to a considerable extent, will determine that country’s potential to generate Income and Economic Growth in the future. The new Macro Watch Video…
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October 23, 2018

The Rich Dad Radio Show Interview With Robert Kiyosaki

I recently spoke with Robert Kiyosaki for the Rich Dad Radio Show about the danger that the US – China Trade War may soon become a new Cold War. In just over two months from now, President Trump intends to increase the US trade tariffs on $250 billion of Chinese goods from 10% to 25%. …
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