Runaway Fiscal Spending Is Fueling The Everything Rally (Part 1/2) | Lyn Alden & Luke Gromen
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- เผยแพร่เมื่อ 31 พ.ค. 2024
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This week Lyn Alden & Luke Gromen join the show to discuss the rise of fiscal dominance, the path forward for inflation & the end game for U.S debt. Part 2 of this discussion will be released tomorrow, so be sure to tune in!
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00:00 Introduction
02:10 Gold, Real Rates & Russian FX Reserve Sanctions
06:15 The Rise Of Fiscal Dominance
16:08 Aura Ad
17:25 Kinto Ad
18:37 The Fed & Treasury End Game
22:22 Fiscal Deficits Don't Matter, Until They Do...
38:07 Permisionless III Ad
38:45 Deglobalization
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Disclaimer: Nothing discussed on On The Margin should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets. - บันเทิง
Stocks extended their year-to-date rally following the CPI report, with the S&P 500 last up 0.8% in afternoon trading. but I don't know if stocks will quickly rebound, continue to pull back or move sideways for a few weeks, or if conditions will rapidly deteriorate.I am under pressure to grow my reserve of $250k.
Find stocks with market-beating yields and shares that at least keep pace with the market for a long term.For a successful long-term strategy | recommend you seek the guidance a broker or financial advisor.
I agree. Based on personal experience working with an investment advisor, I currently have $385k in a well-diversified portfolio that has experienced exponential growth. It's not only about having money to invest in stocks, but you also need to be knowledgeable, persistent, and have strong hands to back it up.
Would you mind recommending a specialist with a variety of investment options? This is extremely rare, and I eagerly await your response
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Colleen Rose Mccaffery” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
because inflation is a wealth transfer mechanism, for those in the know
You know, we were all hoping for the Fed to make that rate cut for a better market outlook and it's beyond my control. I've seen returns of $800k, thanks to decisions to implement shorting & risk management with hedging and avoiding misreported leverage positions
you lucked out, unlike me
the fed's policies mask economic struggles with unsustainable spending and ignoring everyday Americans challenges
research not luck, led me to Emily ava milligan, a top fund manager. 340 grand to this. certainly not
great to see real life results. Your insights deserve credit
These two together is like a 100x info session compared to most.
I came across some statements from big investors expressing concerns that the stock market rally could be short-lived. My concern is my $600K stock portfolio is still recovering from a dip of almost 40%, how do I navigate these complex situations?
Diversification and a thorough understanding of the market dynamics are crucial, especially during periods of uncertainty. Keeping an eye on both the positive and cautionary signals can help investors
Engaging an investment adviser is the optimal approach for navigating the current stock market, especially for those nearing retirement. I've been consulting with a coach and have seen my initial $450K grow to over $800K since Q2.
The best way to navigate the current stock market, particularly for individuals who are getting close to retirement, is to work with an investment adviser. I've been working with a coach, and since Q2, my initial $450K has increased to over $800K.
No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q3 this year.
Please can you leave the info of your lnvestment advsor here? I’m in dire need for one
Luke and Lyn together, definitely a 2 or 3 time listen
If you can understand everything they talked about you should be on the panel! Definitely 2-3 listens. Luke often is too fast for me to grasp what he is saying
Lyn has been completely incorrect about the economy for 2 years nonstop.
@@MrTigerStarX who’s been right in your opinion? Admittedly it’s been tough to predict exact timing and events. But she’s pretty good overall macro analysis
Luke & Larry*
@@MrTigerStarX explain yourself ... eg. what claims / positions are you claiming she got wrong etc.? Lyn hedges everything she says quite carefully and reasonably, and she is very, very data driven. I don't really see anywhere she could be embarrassingly or unprofessionally wrong on anything (eg. like Peter Schiff has been lol). Please enlighten me. If you're expecting her to be a psychic future teller, then keep in mind that NO ONE can predict the future or is always right. Only a fool believes in never being wrong
I see Luke and Lyn in the same photograph talking about stuff. Hell yes I'm gonna watch.
Luke & Larry*
@@donragnar8430 Lynden you mean.
And wtf r u? 😂😂😂
Lyn: "It doesn't matter until it does!" By then, it's probably too late to not get hurt. A number of years ago, I thought it was important to not be in debt and to minimize my risk with stocks that were susceptible to downsides (high Price/Dividends and shaky revenue). Long-term, interest rates can't function at ZIRP.
Since the debt crisis could unleash carnage on the stock market leading to economic downturns. We need to be prepared for potential market volatility. how can I secure my $200K stock portfolio against declining?
Everyone needs a Margin of Safety in their portfolios and just remember, It's time in the market versus timing the market.
De-risk your portfolios, shore up your core holdings, and take some profits while balancing your portfolio allocations. I’d also suggest you go with a managed portfolio, but even those don’t perform so well, so it’s best you reach out to a proper fiduciary to guide you, that’s what works for my spouse and I. We've made over 80% capital growth minus dividends.
I fired mine 10yrs ago. now I am beginning to see the benefits, how do I get one? Considering your point I won’t want to get into a bubble. Can you recommend any?
*Jennifer Leigh Hickman* is who i work with and she is a hot topic even among financial elitist in Texas. Just browse, you’d find her, thank me later.
I'm pleased with your advisor's prompt and knowledgeable assistance. Her professionalism instills confidence. Looking forward to further discussions.
The most important interview so far this year
When part 2?
when discussing the economy of the 1980's we were told the economy was only good because of the "sugar high" created by "huge deficits." if that was true then by now we should be in a hyperglycemic coma.
These two should really get together for a regular show/podcast ... two of the most credible, unbiased economic thinkers so it's great to see them go back and forth exploring ideas.
The collab I didn’t know existed, but I definitely am looking forward to! Like & Lyn.
Lyn has got the best macro view of anyone out there
No he doesn't.
Lyn understands and explains 1940s inflation vs 1970s inflationary periods so well. Many people think we'll have 1970s inflation but Lyn explains how that was caused by boomers entering workforce and buying/spending whereas 1940s was governments overburdened with debt from world war. These days our beloved government debt with wartime spending caused by boomers and politicians voting themselves free goodies and leaving rest of us to deal with the debt. Lest we forget bad fluu season of 2020 where governments blew the doors off of spending, supported by a weak, fearful society (and haven't returned to any sense of fiscal normalcy since). All that for a bad fluu 🤦🏻♂️
Is it a trans?
@@jcgoogle1808She
@@user-ql4ud9zr7m Larry Alden
I am an ex CFO and a personal finance book author and I think I understand investing and macro to an extent but I can hardly ever understand what Lyn's messages are. She has to definitely work on her way of expressing herself. However, Luke is absolutely amazing!
Two gentlemen discussing economics. Very nice.
Loser
There isn't any one piece of data or analysis here that I haven't heard before; but the way that it's all been woven together has given me some new insights.
Two greats together. Wow. Thank you for this episode. Great 2 see blunt honesty especially by Luke about the situation. I completely agree.
These two are absolutely fire, individually…. Together they shine brighter than Ra ☀️
Quality conversation and insights as usual, thank you Lyn A and Luke G
Lynn explains the way a normal person can understand and it blows my mind. 😮
Insanely powerful Interview. 50% Luke and lynn repeating the Most important knowledge of the Last few month. And 50% new. Super good.
Great stuff, thanks again!
Thank you for having my two favorite people on the same video!!! 😊
Amazing guests and timing!
smart dude
Yeh, but he’s smarter than Luke
Luke's great but I still lean on Lyn by a slim margin. She goes into the weeds a little bit deeper and has stronger understanding of 1940s inflation and Bitcoin.
Why does gender bother you so much? @@donragnar8430
2 favorite guests!!
I highly doubt Yellen is making any policy decisions..there is a public face of Government that us peasants see & there is a whole system that runs behind the facade..it’s hard to come to a different conclusion 🤷♂️
Don't forget former Fed Chairs, Congress, Trump and Biden. They have all played their role in making this mess.
@@bpb5541 yep you can blame the players but it’s the system that’s impossible to change..
@@oneeleven9832 What if it completely collapses? Then what? CBDC?
Best interview ever.
In my opinion the 2 best macro analyst in the world.
Thanks lyn. Thanks for your insight on crypto in 2020.
Super interesting and insightful conversation... really appreciate it!
The best Macro interview series this year I reckon
Lin and Luke is the dream team 👍
Lyn alden, is just a macro genius. Never fails to have some incredible insight.
Lyn is by far my go to expert on the economy and investing insights. Another great video! ❤
Luke insight is always fantastic
Wow! Fascinating discussions! I think this is the episode of the year for Macro Economics!
More please!! Amazing interview!! 👏🏼👏🏼👏🏼
Couldn't ask for a better combo of speakers.
Thanks Guys!!
Love Lyn, she's got some great points
Thank you for interviewing the ideal new Fed chairman/woman and Secretary of the Treasury. They can rock/paper sisscors for who takes which job
With One of the best Interviewers and defiantly Best people to Interview. Im going to have to watch this twice
You can't be serious.
@@jcgoogle1808If you didn't get value out of this interview then it's over your head. Back to Tik Tok mate.
@@jcgoogle1808is making smart ass comments all through the thread, just a tool.
@@James-il3tq
More like it was under my head, and over yours, Jamie boy.
I don't get value out of a cluelessDork who starts a question with "IF we go down this road of fiscal dominance"
We went no brakes full throttle stuck down the mountain road heading for the financial cliff of insane corrupt fiscal abuse road the very minute senile ole joe took office.
And Mr Lyn Alden's comment that this fiscal irresponsibility has been going on and countered by falling interest rates for 40 years is just a completely inaccurate description of what's going on now.
We have NEVER, NEVER,. NEVER. deficit spent over 5% and closer to 10% of GDP when we weren't in a recession or a WW,... until senile ole joe took office.
This insane senile ole joe admin and the demcorats have continued to unnecessarily spend 50% MORE in 2021, 22, 23, 24,.. (all of it deficit spending adding trillions to the debt each year),...years after the pandemic is over,...... than was spent the year before the pandemic started,... and we wewn't and we're not even in a recession.
This is a paradigm shift in fiscal policy,.. NOT a continuance of the same ole thing for 40 years.
When Trump left office, the economy was growing at 6% with under 2% inflation.
If the economy is so great as the demcorats like to crow,... then why the need to deficit spend $1 trillion every 100 days????
There is absolutely no reason spending should remain 50% higher.
It should have returned to near 2019 spending levels in 2021.
It's this insane deficit spending,.... diametrically opposed to the Fed's efforts to quell the inflation caused by this deficit spending,... that has caused the inflation that has brought these higher interest rates.
And Lyn thinks it's the interest on the debt being received by investors in treasuries and money markets that is stimulating the economy,.. NOT so much the deficit spending and free money being helicoptered in M1.
And thesemorons,.. like many in the "end the Fed" and the goldbug cults,.... blame the Fed's monetary policy,... that can only react to fiscal abuse,.. NOT the incompetent presidents and congressmen,.. who actually are to blame due to their fiscal abuse.
Wake up and smell the coffee,.. mate.
This is insane bombarding us every couple of minutes with lengthy advertisement , it’s unfortunate to part of with this Channel since I believe you people are doing great job. Hopefully you will consider it
I disagree with Luke's assessment of the Plaza accord. The Japanese and the Germans had been artificially keeping their currency low giving them an unfair trade advantage. The U.S. had allowed this and opened our markets to them to support economic growth of these countries after WWII. However, by the time of the Plaza Accord we threatened to close our markets to them if they did not agree to allow their currencies to float at market rates. We would have the same influence over China by doing the same thing, threaten to close our markets to them.
Also: Lynn leaves out the foundational cause of the inflationary period of the 1970s was Cost Push due to decline U.S. domestic oil output increased energy demand dependence upon unstable middle eastern supply of oil. The oil embargo of 73/74 and the fall of the shaw of Iran in 79.
I think you got the reasons for the Japanese and German trade surplus wrong. They made better quality products at lower prices that were due to manufacturing methods not currency advantages. The US cannot control China as it has a massive domestic market, It can sell to the rest of the world and it has built offshore factories to evade US tariffs. The US has no rounds left in its magazine. Goodbye USA.
Lyn is the only macro expert whom I cant listen at 1.5x - have to watch at normal speed to digest.
Great discussion. What a wild time to live in!
Our models no longer work.
Thank you very much...
I’ve missed Luke’s blue sport coat over the past 2 weeks, but a Beige Camel hair coat would be very nice. Love Lynn and Luke. Listen To them three times to get all.
Thank you. When two such astute analysts sing from the same hymn sheet ,it is time to listen and plan accordingly.
Thanks
Nice jumper 😊
Awesome pod!
Great interview!
Lynn is a star, always worth listening to.
Lyn Alden: Man, oh man.
Is she a man
It is a women not a man. She was smoking a lot hence the voice is low
Man or woman, she is an excellent and intelligent presenter
@@markmarcas6523 why do you call them she? That’s sexist
This was great
The most important point I took from this podcast is Mike's Starsky jumper 😊
Thanks for a good interview!
The timing is always a tough one. If I may suggest something. Instead of asking ‘when’, you could also ask for ‘what is a possible cue for this and that to happen? ‘. Have a bit of an elaboration on scenarios and/or trigger/cue/driver.
Two of the best
Good morning!!
The productivity boom we need is not in AI or IT that's been far above average in productivity for the last 50 years infect the only sectors that have increased in productivity in real terms are IT, finance, mining (fracking) and agriculture all service related sectors are way below inflating in productivity gains even construction for example is down 60% in productivity per worker hour same for truck drivers. Best I can tell this all started happening in the early 70s when we went off the gold standard and drastically increased regulation on doing everything besides IT.
oh, my fav two analysts…!🎉
We hear this about every 5 years. Nothing ever gets done Good luck
This is information I use to make decisions in my business.
ok must watch, my two favorite macro people..
think I understood 13 percent of what they're talking about
If you can only slow or speed up the train, and not stop it, then when does the train run out of track?
Very smart people - Luke & Lyn
great video
Must-see TV 📺 for serious investors
This was a financial Rock concert
Edge to cloud, I believe that’s cloud to edge
The 1970s inflation era in the US might also have been affected by a similar fiscal dominance during that time of time, considering the lingering effects of both Lyndon Johnson's Great Society program and the then highly expensive Vietnam war that had to be financed mainly by the US federal government alone, even though the government deficit- or debt-to-GDP ratio at that time had not been as high as that prevailing today.
The upshot seems to be: Gold/real rate divergence signals "No choice but return to QE while keeping real rates negative, except this time with MMT in tow on the fiscal side". Correct?
How or where do i see the fed supplying liquidity to treasury market
What was the impact, if any, from the Revenue Act of 1978 with 401k savings plans vs the perhaps more conservative guaranteed corporate pension plans? As 401k savings plans became more common in the late 80's and 90's, is there any relation to today's results? I recall Mr. Greenspan sometimes unable to explain the exuberent market growth during the 1990's. Or, perhaps there is no relation.
Perfect, you just needed Jack to moderate instead
Exactly,.. this guy is anIdiot.
Gromen mentions when "Treas Mkt gets dysfunctional" he indicates off the run treas sales > on-the run Treas sales. This EXACT issue is being addressed by Yellen today: via treas buybacks!
Turkey and their economy's resistance to interest rate hikes is going to be an interesting study.
Doesn't matter how one looks at it, deficit spending results in debasement of the currency and you eventually end up with an American Peso and a Canadian Yen.
omg my two favorite macro geeks
Despite all the financial struggles i and my family faced, everything is finally falling into place! $47,000 weekly profit and riches I'll always praise the Lord!!!
Thanks for the advice! I'm new to financial planning and wasn't sure where to start. Any tips on finding a reliable financial adviser or resource to guide beginners..
HOW
....!! I know it's possible, I would appreciate if you show me how to go about..
Sincerely speaking. I will continue to trade and stick to expert nor elie daily signals and guides as long as it works well for me...
I agree. Based on personal experience working with an investment advisor, I currently have $1m in a well diversified portfolio, that has experienced exponential growth. It is not about having money to invest in stocks,but also you need to be knowledgeable, persistent, and have strong hands to back it up..
Wow I'm just shocked you mentioned Norelie Daissy, thought I'm the only one
trading with..
The metaphorical train Lyn speaks of is headed where? What’s its final destination? I agree it is set and running, but to where? 42:00 to 43:30
Anybody notice the Doomberg chicken taking shots at Luke Gromens peak cheap oil
The question is, what can the fed do to control the money supply from now going forward?
So according to the chart either gold should have went down in 2022 or the real 10 year yield should have went up. To me that chart shows the central bank losing control over inflation. The yield should have went up with inflation in 2022 but they labeled it as transitory instead.
This eventually happens in every democracy, when people think they can vote in people that will give them more than they pay in taxs..its very bad idea that never works in the long run.
This is why democracies eventually fail. US is no exception. Too bad we don't have laws limiting government spending (required balanced budgets). Easy to deficit spend endlessly and debase currency with no restraint of gold standard. Lest we forget US default in 1971 and inflation taking off since then (see gold price).
Been telling people about rates being stimulatory since they peaked. I have been watching all these companies stack cash and earning income off it. Filling the holes in their decline in income from the consumer. How do you think they are doing all the buybacks. This also pumps the stocks, making taxes higher on them. All good for the government 🤡🌍.
So, desinflationary force with AI on one side, but less tax income/ higher social expenses on the other. Which one wins?
Demographics
Deep, dense and dynomite!
The geniuses that run our economy should have paid attention the debt situation in 1988 and things would be much different now.
Market wizards audiobooks on Spotify? Thanks!
19:44 2019 Overnight repo rate spike mentioned by Lyn Alden. ⚡️
of course the day they publish this everything tanks
Awesome Discussion. Lots of fantastic nuggets from Luke & Lyn. I've been wrapping my head around the Monetary + Fiscal Dominance topics for a little while now... Thanks for the details on that one.
Oh, and ... "Gold is Money; and, everything else is just Credit."
Where is part 2/2 ?
What is EM?
Dear Luke,
The short answer is: "yes".
The long answer is: it depends undergarments...
Warm regards,
If you don’t understand all that was discussed and how to position no matter. I’ll sum it up: Nothing is gonna stop this train
That’s exactly what I’ve been thinking now for the last 6 months
Dreams do come true
Explain why "fiscal dominance" matters in US but not in for example UK, france, italy? "US is very financialized" is NOT enough of an answer.
Because other countries does not have the world reserve currency and thus cannot have as large deficits or their bond markets explode, e.g. UK Gilt debacle 22.
Because most counties outside US have significant USD debt. Mostly in eurodollar system off balance sheets on the shadows.
America is losing its reserve currency status. it does not happen over night but even Yellen (Lord Sidius) admits as much. Once we get below 40% reserve currency status America is going to see prices for goods spike to double what they are now. This does not take inflation into account. America is about 60% currently. Maybe a few more years? Not sure, but it is happening regardless of the time line.