Why some nations are at risk of default on their national debt and others are not. Plus why the U.S. national debt will never be repaid. Photo by J.D. Stein In this episode you'll learn: Why the federal government is not like a household or business.Why the federal government should focus on economic growth and inflation and not fiscal soundness.Under what circumstances have nations defaulted on their national debt.How federal governments can print money by coordinating with their … [Read more...]
78: What If the Economy Permanently Stopped Growing
How a zero-growth economy would impact investing, employment and lifestyle. It depends on whether the economy is flat lining due to population shrinkage or a willful choice to be less productive. Photo by J.D. Stein In this episode you'll learn: How economic growth is measured.Why long-term economic growth is tied to population growth and/or productivity growth.How population decline can lead to deflation, stagnating stock markets and falling bond yields.What happens if … [Read more...]
74: Capital Flows Where It Is Treated Best
How investment capital seeks out the most attractive opportunities, and why that is causing China to dump some of its U.S. Treasury bonds. Photo by J.D. Stein In this episode you'll learn: What it means to have your investment capital treated well.Why the U.S. dollar is stronger than the Canadian dollar.What drives currency exchange rates.What are the negative consequences of a weak currency.What are foreign currency reserves and how do countries acquire them.Why China owns U.S. … [Read more...]
42: All Countries Are Insolvent and That’s A Good Thing
Why all federal governments are insolvent but investors still line up to buy government debt at low interest rates. Photo by Mark Strozier In this episode, you'll learn: What does it mean to be insolvent.What is the financial net worth of the U.S. government.Why federal governments are forced to run budget deficits.How GDP is calculated.Why haven't interest rates skyrocketed if federal governments are insolvent.What happens if China dumps all their U.S. debt. Show Notes The … [Read more...]
4: Seesaws, Budget Deficits and the National Debt
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...]
