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Supercycle Of Debt
Debt has a defined sequence: The lender and borrower agree on terms, the loan is funded, the borrower repays according to a schedule, eventually pays the full amount, then it’s over.
The Big Cycle 2
When your system, whatever it may be, is working extremely well, we used to say it’s “firing on all 8 cylinders.” What does that mean?
The Big Cycle
One mark of true brilliance is the ability to make complex ideas seem simple. I think this is why so many of us fondly remember our early schoolteachers.
Are Bond Yields High?
Rates on 10-year Treasuries have been climbing since August 2020. But depending on the time frame, you could argue that yields are still relatively low.
Cyclical Forces
If five different systems all come to the same (general direction) conclusion, then perhaps we should pay attention?
More Personal Portfolio: Biotech, Commodities, And Gold
In a few years we will know if that was an extraordinarily opportunistic moment, or a long and frustrating rabbit hole.
Noble Sacrifices
Today, we’ll continue reviewing Peter Turchin’s new book End Times, which describes his theory of “cliodynamics” and how elite overproduction tends to precede societal crises.
The Science Of Cycles
Today we continue our study of the historical cycles suggesting a major crisis is in our near-term (5‒8 years) future. We don’t know the precise timing or nature of the crisis, but the patterns indicate one is coming and could be severe.
Storms And Patterns
Cue the Churchill quote: “You can always count on the Americans to do the right thing after they have tried everything else.” But meanwhile as we try everything else, things get worse.
Turning Time
In the grander scheme of things, whatever the Fed does is more like throwing a hand grenade into a large building. Yes, you’ll make some noise and cause some damage. People may be hurt. But the building won’t care, and the owner will fix it.
Housing Hiccups
Housing is by far the biggest expense for most American households. Any inflation analysis that ignores housing misses not only the elephant in the room, but the room itself.
Flip Side Of The Inflation Coin
The market, and maybe all of us, would like to believe the latest 3% annual CPI number was a harbinger of ever-lower inflation, and we are on the road to 2% inflation by year end. I would argue, “Not so fast.”
Muddled Optimism
My recent letters spent a lot of time examining darker scenarios, so I want to look on the bright side. Good things are happening -- actually, lots of good things must be happening in order for the country not to be rolling over into a depression.
Endless Intervention
National leaders are (or should be) reluctant to enter wars because, once begun, they are often hard to end. You could be bogged down for years, vainly trying plan after plan as the damage accumulates. Monetary policy works the same way.
A Funny Kind Of Recession
In both weather and the economy, the best we can do is define a range of possible outcomes and try to assign probabilities. It’s not wet or dry, recession or boom. There’s a lot of in-between territory. And in between is usually what happens.
A Skip, Not A Stop
On Wednesday, the Fed sent a confident signal by declining the opportunity to raise rates again. But no one should think the rate hikes are over. I expect Jerome Powell to respond swiftly and aggressively if inflation starts moving higher again.
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