Macro

The Treasury has two choices on how it pays the government’s bills. They can either issue debt (dollar liquidity negative) or spend money from its checking account at the Fed (dollar liquidity positive). Because the aggregate amount of debt cannot rise until the US Congress increases the debt ceiling, the Treasury can only spend funds from its... See more

In that respect the Cold War teaches the same lesson as World War II and, for that matter, most wars in recent history. Don't let a ruling class of warriors and politicians squash the entrepreneurs. The same recipe that makes individuals rich makes countries powerful. Let the nerds keep their lunch money, and you rule the world.

Therefore, unless the US Fed restarts QE, the omens for Global Liquidity are not great. Does this mean that investors face a threatening financial crisis? We are not this downbeat simply because the heightened demands for debt refinancing that so offer trigger crises are unlikely to bite until 2026. However, a future threat remains, even if we are... See more

Reserve currencies since we have understood them have been intertwined with the geopolitics as much as the economics of the system that sustains it. Which is why the incumbent generally converts that economic power to military dominance. When faced with a challenger, the up and coming competitor must unseat and surpass both the economic and... See more

In the short term they will have to do some form of yield control, but they need rates to be high enough not to have the currency slide too far relative to the rest of the world. They are then going to have to print the difference.

A central theme in Howell’s analysis is the assertion that liquidity flows have become crucial in understanding the modern financial landscape. In recent years, particularly since the global financial crisis, the nature of capital investment has evolved. Interest rates, which historically served as a critical indicator of capital allocation, have... See more

Other than the US, the largest global exporters in order of size are China (currency: yuan), the EU (currency: euro), the United Kingdom (currency: pound), and Japan (currency: yen). The dollar must decline against all these currencies to encourage a company on the margin to relocate production inside America.

The last 40 years have been us trying to convert the world to liberalism(our new incumbent system), to attempt to ensure global peace. The reverse of this will now begin to occur, and many will be very surprised, (especially China and Mid-east) at just how ruthless the west will be in regards to the countries aligned against the America/western... See more