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You are here: Home / Archives for budget deficit

525: No More AAA – What the U.S. Debt Downgrade Means for Investors

May 21, 2025 by Camden Stein · Updated May 21, 2025

With longer-term U.S. interest rates rising and no plan to reduce the budget deficit, is a U.S. national debt crisis imminent? Topics covered include: Why S&P, Fitch, and now Moody's stripped the U.S. of its pristine AAA debt rating How the U.S. national debt dynamics compare to Greece, Italy, and Japan What are four things investors should monitor for signs that the national debt crisis is worsening or spiraling out of control Show Notes Moody's Ratings … [Read more...]

Filed Under: Podcast Tagged With: budget deficit, debt ceiling, debt default, government spending, national debt

503: U.S. Stocks Have Never Been This Overhyped or Expensive

December 4, 2024 by Camden Stein · Updated December 16, 2024

What are the tangible and intangible factors that have contributed to long-term U.S. stock market outperformance compared to the rest of the world? Despite these advantages, why might we still want to continue to be globally diversified? Show Notes American productivity still leads the world—The Economist The Outlook for Long-Term Economic Growth by Charles I. Jones—Federal Reserve Bank of Kansas City How Much Will Global Warming Cool Global Growth? by Ishan B. Nath, Valerie … [Read more...]

Filed Under: Podcast Tagged With: budget deficit, international stocks, productivity, stock valuations, U.S. stock market

433: What Happens If The U.S. Defaults On Its Debt? Here’s Why It Won’t

May 17, 2023 by Camden Stein · Updated June 6, 2023

What are the grave consequences if the U.S. debt ceiling isn't increased and the government defaults? What would the Federal Reserve and the Executive Branch do to prevent default if Congress doesn't act? Topics covered include: What are the potential impacts of a U.S. default on the stock and bond markets, and the overall economy What causes the U.S. to have a perennial debt ceiling crisis Why it is uncertain when the U.S. government would run out of money to meet its … [Read more...]

Filed Under: Podcast Tagged With: budget deficit, debt ceiling, Federal Reserve, national debt, trillion dollar coin

295: Federal Reserve Insolvency and Monetizing the National Debt

April 22, 2020 by David Stein · Updated May 14, 2024

How central banks can become insolvent and why it can lead to hyperinflation. What are four ways the Federal Reserve and the U.S. Treasury could monetize the national debt. Topics covered include: What are the major asset and liabilities of the Federal Reserve How does the Federal Reserve make a profit and what happens if it suffers a loss. How has the Federal Reserve has significantly expanded the types of assets it will hold and what are the risks. What could cause the … [Read more...]

Filed Under: Podcast Tagged With: budget deficit, central bank insolvency, central banks, creative accounting, currency reform, Federal Reserve, Federal Reserve Notes, hyperinflation, national debt, quantitative easing, real resources, Reis (Ricardo)

245 Plus: March 2019 Mid Month Update, Inverted Yield Curve, Puts on ETFs, and a Private Lending Limited Partnership

March 23, 2019 by David Stein · Updated June 11, 2024

In Plus episode 245 for the week of March 23, 2019, we look at investment conditions as of mid-March including flash PMI reports. We revisit the accuracy of inverted yield curves in predicting recessions, and what is different this time now that the yield curve has inverted. We look at why long term interest rates could increase during the next recession. David discusses his recent trade to buy puts on two non-investment grade fixed income ETFs. Finally, we look at a limited partnership … [Read more...]

Filed Under: Uncategorized Tagged With: budget deficit, inverted yield curve, private credit, private lending, put options, yield curve

241: Do Budget Deficits Matter? Modern Monetary Theory Explained

February 20, 2019 by David Stein · Updated May 26, 2021

Why modern monetary theory isn't worried about federal budget deficits, why budget deficits never go away and what are the risks if budget deficits get too large. We also explore what else proponents of modern monetary theory believe. Photo by Kenneth Santos In this episode you’ll learn: What are the core principles of modern monetary theory.How federal budget deficits increase private sector savings.What is crowding out as it relates to interest rates.What are the risks of running … [Read more...]

Filed Under: Podcast Tagged With: budget deficit, MMT, modern monetary theory

169: The Debt Ceiling—What Happens If the U.S. Defaults

August 16, 2017 by David Stein · Updated May 17, 2023

What could happen if the U.S. Congress doesn't raise the debt ceiling and defaults on U.S. financial obligations. Photo by Augusto Navarro In this episode you’ll learn: What is the federal debt ceiling and why does Congress always wait until the last minute to raise it. How long has the debt ceiling been in place. What would be the consequences of default by the U.S. government on its obligations. Why does the government continue to run a budget deficit instead of a … [Read more...]

Filed Under: Podcast Tagged With: bond defaults, budget deficit, debt ceiling, Federal budget, national debt, rehypothecation, repurchase agreements, shadow banking, shadow banks, U.S. Treasury bonds

157: The Most Important Economic Question of Our Time

May 10, 2017 by David Stein · Updated September 25, 2023

Why the likelihood of a future fiscal crisis sparked by the national debt depends on whether there is a limited or an unlimited supply of money. Is it possible the federal government's endless borrowing could crowd out the private sector and harm the economy? Photo by Cesar Marchan In this episode you’ll learn: How much is the U.S. national debt expected to increase. What is the financial concept of crowding out. How money is a zero-interest perpetual liability. How the … [Read more...]

Filed Under: Podcast Tagged With: budget deficit, Federal budget, Japan, money creation, national debt

MNY042 Plus: Federal Governments Outsource Money Creation to Banks

February 7, 2015 by David Stein · Updated November 2, 2021

In this week's Money For the Rest of Us Plus episode, I explain that while governments can theoretically create money by spending that in practice they have outsourced money creation to banks. I also share a paper that helps explain much of what was covered in Episode 42. Finally, I discuss the rebound in oil prices, the strong jobs report and my bond portfolio. The episode length is 12 minutes. … [Read more...]

Filed Under: Money Plus Tagged With: budget deficit, deficits, money, money creation

4: Seesaws, Budget Deficits and the National Debt

May 19, 2014 by David Stein · Updated December 24, 2020

A seesaw is the perfect analogy to understand many aspects of the economy and investment markets. Photo by simplesomia For a seesaw to work properly, you need at least two people‒one on each side. When looking at the economy, we should always be asking, "Who is on the other side of the seesaw?" In this episode, we apply the seesaw analogy to federal budget deficits, the national debt, and trade. You'll learn: What seesaws have to do with investing and the … [Read more...]

Filed Under: Podcast Tagged With: budget deficit, national debt

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