What are the forces that lead to the rise and fall of nations. Why does the U.S. appear to be in decline and what investors can do to prepare. Photo by TechCrunch (CC BY 2.0) Text and overlay added. Topics covered include: An overview of Ray Dalio and Bridgewater Associates' investment process Why human productivity is the most powerful force for creating wealth. Additional forces that contribute to nations increasing in power and wealth. Why being the reserve currency is an … [Read more...]
295: Federal Reserve Insolvency and Monetizing the National Debt
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...]
292: Will Infinite Money Save the Economy?
What central banks such as the Federal Reserve and federal governments are doing to counteract the negative impact of the pandemic related economic shutdown. What are the risks of this massive monetary and fiscal stimulus and how to mitigate those risks. Topics covered include: How central banks have the capacity to create an infinite amount of money.How the Federal Reserve is using its money-printing ability to stabilize the financial system and reduce the negative impact of the … [Read more...]
286 Plus: February 2020 Investment Conditions and Portfolio Review
In Plus episode 286 for the week of February 7, 2020, we review current investment conditions as of early February 2020, including market valuations, economic trends and market internals in light of the coronavirus pandemic. We consider how the Federal Reserve has essentially purchased all of the net new issuance of Treasury securities since September and whether that is likely to continue. We also review David's portfolio. … [Read more...]
270: Repo Rates Soared—Here’s Why It Matters
How a liquidity crunch in the short-term lending markets sent interest rates soaring. Why this is a huge blunder on the part of the Federal Reserve, and what it means for us as individual investors. In this episode you’ll learn: What are repurchase agreements and how are they used to finance U.S Treasuries. How outflows from money market funds and hoarding by banks led to a liquidity crunch that caused repo rates to spike to 10%. Why banks are hoarding reserves held at the … [Read more...]
238 Plus: Federal Reserve Actions, DoubleLine, MBS and REITs
In Plus episode 238 for the week of February 2, 2019 we analyze the recent change by the Federal Reserve to effectively put their policy of raising short-term interest rates on hold. We review a profile of DoubleLine Capital in Kiplinger's and the risks DoubleLine sees in the current investment environment, particularly for rising U.S. interest rates. We evaluate the difference between agency and non-agency mortgage backed securities in terms of default risk. Finally, we look at Cohen … [Read more...]
220: Where Should You Invest Your Cash Savings?
How to evaluate cash savings options at banks, credit unions and brokerage firms. Why are yields on cash savings so much higher than a few years ago. How to tell if your bank or credit union is in experiencing financial difficulties. Photo by Brook Ward In this episode you’ll learn: How to tell if a bank or credit union is having financial difficulties.Why are yields on short-term cash equivalents higher.What tools does the Federal Reserve have to keep short-term … [Read more...]
205: Is The Federal Reserve Really Printing Money?
If the Federal Reserve has printed over $2 trillion dollar and given it to banks to lend, why is U.S. inflation still low? Photo by Pepi Stojanovski In this episode you’ll learn: How banks create money and how reserves factor into banks' lending decisions.How much has the money supply increased as a result of bank lending and Federal Reserve action.How Federal Reserve bond buying increased liquidity but not national wealth.Why we haven't seen higher inflation. Show … [Read more...]
199: What Kind of Money Is It?
How a bank panic led to the creation of the Federal Reserve, and why having diversified sources of money can protect us in case we have a bank panic today and can't get access to our bank deposits. Photo by Annette Fischer In this episode you’ll learn: How a bank panic and economic crisis in 1907 led to the creation of the U.S. Federal Reserve in 1913.How U.S. currency evolved after the establishment of the Federal Reserve.How currency, bank deposits, gold and Bitcoin … [Read more...]
163 Plus: Federal Reserve, Pension Crisis and Is There Enough To Retire
This week July 1, 2017 on Money For the Rest of Us Plus we learn how bank reserves at the U.S. Federal Reserve will be reduced as the central bank reduces its holdings of U.S Government bonds. We use the tools on Money For the Rest of Us Plus to analyze whether a member will have enough to retire. We explore the severity of pension fund crisis for U.S. states and municipalities as well as for U.S. businesses and the potential fallout from the crisis. Finally, we take a brief look at a … [Read more...]
