In Plus episode 538, we explore various inflation measures, what causes inflation, and the relationship between the money supply and inflation, as we consider whether the Federal Reserve Open Market Committee will cut the Fed's policy rate next week. We also analyze the investment case, or lack thereof, of Bitcoin and Ethereum Treasury companies, publicly traded firms that hoard cryptocurrency. Become a Member If you would like to listen to this episode of Money For the Rest of Us … [Read more...]
537: Why Central Banking Is So Hard and Why Fed Independence Matters
Central bankers set policy with incomplete information, unobservable targets, and constant trade-offs between growth, inflation, and employment. In this episode, we delve into how the fight for Federal Reserve independence could impact markets, interest rates, and your financial future. Topics covered include: Show Notes 2025 Statement on Longer-Run Goals and Monetary Policy Strategy—The Federal Reserve Board Trump says U.S. interest rate is at least 3 points too … [Read more...]
501 Plus: Why Interest Rates Are Rising, Maximum Drawdowns, and Buffer ETF Underperformance
In Plus episode 501, we review why Federal Reserve Chair Powell said the Fed isn't in a hurry to lower its policy rate. We revisit why interest rates are increasing. David shares the expected return, ranges, and maximum drawdown of his portfolio. We analyze why buffer ETFs can lag the underlying reference assets when the stock market is appreciating. Become a Member If you would like to listen to this episode of Money For the Rest of Us Plus, you can do so by becoming a Money For … [Read more...]
495: The Federal Reserve Cut Rates. What Should We Do Now?
What does the Federal Reserve's policy rate cut mean for our portfolios? Will interest rates keep falling? What changes should we make? Topics covered include: Show Notes Asset Camp FedWatch—CME Group Summary of Economic Projections—US Federal Reserve Investors may be getting the Federal Reserve wrong, again—The Economist Term Premium on a 10 Year Zero Coupon Bond—Federal Reserve Bank of St. Louis Yield to Maturity Is Always Received as Promised by Richard J. … [Read more...]
433: What Happens If The U.S. Defaults On Its Debt? Here’s Why It Won’t
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: Show Notes The Debt Limit Since 2011—Congressional Research Service 7 doomsday scenarios if the U.S. crashes through the debt ceiling by Jeff Stein—The Washington Post A debt ceiling default would send the U.S. housing market back into a deep … [Read more...]
428: How the Coming Credit Crunch Could Harm the Economy and Real Estate Prices
How accelerating bank deposit withdrawals could harm the economy, including real estate prices. How dollars slosh around the financial system but always seem to end up at the Federal Reserve. Topics covered include: Show Notes Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks—The Federal Reserve Assets and Liabilities of Commercial Banks in the United States—The Federal Reserve All U.S. Banks Net Interest … [Read more...]
424: Are More Bank Runs Coming? The Collapse of Silicon Valley Bank
What caused Silicon Valley Bank to collapse in only 44 hours, and how likely will the contagion spread leading to other bank failures? Topics covered include: Show Notes Silicon Valley Bank launches $2.25bn share sale to shore up capital base by Joshua Franklin and Antoine Gara—The Financial Times US Bank Capital Regulation: History and Changes Since the Financial Crisis by John Walter—Economic Quarterly SVB's 44-Hour Collapse Was Rooted in Treasury Bets During the … [Read more...]
388: Will Quantitative Tightening Lead To Even Greater Financial Losses?
How financial markets and the economy performed last time the Federal Reserve took away the punch bowl by raising its policy rate and pursuing quantitative tightening. Things worked out fine that time. Will it be different this time? Topics covered include: Where did the phrase take away the punch bowl come fromHow central bank actions can slow the economy and lower inflation.The difference between having cash and having wealthHow quantitative easing and quantitative tightening workWhat … [Read more...]
382 Plus: How High Will Interest Rates Go, A New Portfolio Holding, and Setting Limit Prices
In Plus Episode 382, we review previous Federal Reserve tightening cycles to see when and at what level longer-term interest rates peaked. We also review a new closed-end fund holding in David's portfolio, the BlackRock Debt Strategies Fund (DSU). This new fund replaces the iShares Interest Rate Hedge Corporate Bond ETF (LQDH). We also discuss how to decide what limit price to set when trading a closed-end fund or ETF. Become a Member If you would like to listen to this episode of … [Read more...]
336 Plus: A Simple Money Supply, Money Creation Analogy
In Plus Episode 336 for the week of March 27, 2021, we discuss some new site additions for Plus members. We also explore an analogy to explain under what circumstances the money supply and purchasing power increase and under what circumstances they don't. We use the analogy to explain what is happening currently and under what circumstances it could lead to higher inflation. Finally, we review why Hoisington Investment Management Company believes inflation will stay low and interest … [Read more...]
