Barack Obama is one of the biggest “Keynesians” of all time, but unfortunately most Americans don’t even understand what that means. By propping things up in the short-term, he has absolutely demolished our long-term economic future. But like most politicians, Obama has been willing to sacrifice the future for short-term political gain.
After being forced to withdraw $15 billion to fund government deficits, Norway's sovereign wealth fund has decided to boost it's equity allocation to 75% from 60% creating about $130 billion worth of incremental global equity demand
"Wouldn’t it be great if Toblerone turned this incident into a teaching moment for its devoted customers? If it used its social media channels to remind them of the virtues of hard money and the costs of fiat money? If it helped Toblerone aficionados see the relationship between gaps in their candy to mainstream monetary fads that help bring them about?"
Following a November to remember, which saw tremendous market gains following the election of Donald Trump, December has started off on the back foot, with US equity futures lower, European stocks halting a two day advance ahead of the Italian referendum, US Treasury yields higher and the US dollar backing away from a 9 month high.
Total fertility rates, which can be defined as the average number of children born to a woman who survives her reproductive years (aged 15-49), have decreased globally by about half since 1960. This has drastically shaped today’s global economy, but a continued decline could have much more severe long-term consequences.
"The only way to extricate ourselves from the present mountain of debt is to be more productive. Growth is the only way out of debt; you cannot inflate yourself out of debt, even if this is the go-to agenda among policymakers. Ultimately, change will not come because we want it. It will not come because we decide on it. It will come because we need it."
Much of the recent optimism seems to stem from a the belief that the new administration will be able to dramatically (and immediately) increase economic growth. The problem is that the US and global economy continue to face major structural issues that seem to be beyond the control of any politician. Increasingly, it is feeling like we are in a “buy the rumor, sell the news” kind of market.
Can Trump-economics prevent the asset price inflation now infecting the global economy - with its origins in the radical monetary experiment under the Obama Administration - from moving on to its late deadly phase?
We, and the rest of the world, are patiently hanging around, waiting to see if the Federal Reserve wakes up to what’s happening to dollar liquidity, and the threat it poses to the global economy and to its own (glacially slow) tightening cycle.