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January 19, 2020 | Looking on the Bright Side

We haven’t had a lot of good news lately. Or, more precisely, we haven’t seen a lot of good news lately, though it does exist. We don’t see it because both regular media and social media usually focus on the bad. That’s not entirely wrong. The survival imperative makes humans watch for threats, and sometimes […]

January 12, 2020 | Decade of Living Dangerously, Part 2

If living dangerously is your goal, just keep adding reasonable, manageable, prudent risks. Eventually they’ll add up to serious danger. Hyman Minsky showed how stability leads to instability. Humans have a way of reinterpreting stable periods that seemingly redefines words like reasonable, manageable, and prudent. That’s why we continue chasing yield and risk until we […]

January 5, 2020 | Decade of Living Dangerously, Part 1

Welcome to the 2020s. Some weren’t sure we would make it this far, but we did. Now we face a new decade and new challenges. How we handle them will determine what kind of conversation we have in 2030. This concern for the future is one of the things that separates humans from animals. Dogs […]

December 22, 2019 | Prelude to Crisis

Ignoring problems rarely solves them. You need to deal with them—not just the effects, but the underlying causes, or else they usually get worse. The older you get, the more you know that is true in almost every area of life. In the developed world and especially the US, and even in China, our economic […]

December 15, 2019 | Time to Do the Hard Thing

We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are […]

December 8, 2019 | Inflationary Angst

According to the dictionary, the word angst refers to “a feeling of deep anxiety or dread, typically an unfocused one about the human condition or the state of the world in general.” It comes from a German word for “fear.”

December 1, 2019 | Advice Worth Taking

We’ve reached the Thanksgiving weekend, and as always, I’m thankful for loyal readers like you. I hope you are enjoying some quality time with family and friends. And because of the holiday, this week’s letter will be shorter than usual, but I think it will offer real value. Year-end is rapidly approaching, which means time […]

November 24, 2019 | Muddling for Solutions

Those who experienced the 1930s as adults are mostly gone now, but they left notes. We have a pretty good record of what that period was like. It wasn’t fun to begin with—then it got worse. This year, I’ve written several times about the 1930s parallels that Ray Dalio and others see with our situation […]

November 17, 2019 | The Road to Default

Nothing is forever, not even debt. Every borrower eventually either repays what they owe, or defaults. Lenders may or may not have remedies. But one way or another, the debt goes away. One of Western civilization’s largest problems is we’ve convinced ourselves debt can be permanent. We don’t use that specific word, of course, but […]

November 10, 2019 | Slowing but Not Stopping (Yet)

If you are a computer (other than the newest experimental quantum ones), your world is entirely binary. Everything is some combination of zeroes and ones. The machines can do marvelous things with those two digits but they have limits. We humans don’t have to think in either/or terms, yet we often do. I see it […]

November 3, 2019 | Chinese Chess Game

Every investment decision should have an exit strategy. What will you do if your idea doesn’t work? Ideally, you make that decision before you invest. Mistakes are inevitable but survivable if you recognize them quickly and act to minimize their costs. The same is true in business, international relations… or even a chess game. Great […]

October 27, 2019 | China’s Disturbing Vision

And once you see it, you cannot unsee it. I’m not alone. Here is what we are observing at macro scale: That it has been common knowledge—something we all knew that we all knew—since the Nixon years that by simply exporting capitalism and free enterprise, we would unshackle the forces of freedom in China. That […]

October 20, 2019 | Decoding the Fed

“In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them. There is only one difference […]

October 13, 2019 | Our Nuts Are in Danger

Life would be so much easier if we didn’t have to worry about our financial futures. Though I suppose we don’t have to worry. Animals don’t. Squirrels instinctively store away nuts and thus live through winter without much thought. We humans have retirement winters, and we’re more sophisticated than squirrels. We generally outsource the job […]

October 6, 2019 | Social Security Is Dying Because Baby Boomers Aren’t

I’m filing this letter on the day I turn 70 which, among other things, means I start receiving Social Security benefits this month. The good news, at least for me, is I am getting a whale of a deal from Social Security compared to later generations. Frankly, I was surprised at my monthly benefit amount, […]

September 29, 2019 | Quantum Economics

I often say a writer is nothing without readers. I am blessed to have some of the world’s greatest. Your feedback never fails to inspire and enlighten me. Last week’s That Time Keynes Had a Point letter brought many more comments than usual. Apparently Keynes is still provocative 73 years after his death, no matter […]

September 22, 2019 | That Time Keynes Had a Point

“Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.” ―John Maynard Keynes I begin with this Keynes quote because, while true, […]

September 15, 2019 | Black Hole Investing

Scientists say the rules change in a cosmic “black hole” at what astrophysicists call the event horizon. How do they know that? Not by observation, since what happens in there is, by definition, un-seeable. They infer it from the surroundings, which say that the mathematics of the universe as we understand them change at the […]

September 8, 2019 | Dalio’s Analogue and Mauldin’s Commentary

“The best way out is always through.” —Robert Frost “History doesn’t repeat itself, but it does rhyme.” ―Mark Twain It will not shock you when I say we live in confusing times. Odd, seemingly inconsistent events and decisions don’t bring the expected results. Once-reliable rules don’t work. This makes it hard to chart a personal […]

September 1, 2019 | Volatile Year Coming

We have reached Labor Day weekend which, in the US, is a holiday for honoring work and workers. If you’re a Baby Boomer like me, you also grew up knowing school was about to start again. We didn’t do the mid-August thing back then. The first day of school was the day after Labor Day. […]

August 25, 2019 | Digging a Hole to China

Good news: The trade war is over. No, it’s getting worse. Or maybe it is ending but it could start again tomorrow. Confused? All of the above were true at various points in the last few weeks. Markets bounced around in reaction. And we are still no closer to knowing how it will all end. […]

August 18, 2019 | What I Learned at Camp Kotok

I am back from my 14th annual Maine fishing camp and the mood was decidedly different this year. The private event at Leen’s Lodge is generally called Camp Kotok in honor of David Kotok of Cumberland Advisors who started these outings many years ago. CNBC and others began calling it the “Shadow Fed” but it […]

August 11, 2019 | Larry Kotlikoff on The Big Con

I have a special treat for you. I’m at Camp Kotok, the annual economics/fishing retreat in Maine. Knowing internet connectivity would be scarce here, I asked good friend Larry Kotlikoff to be your guest writer this week. For those who don’t know, Larry is a Boston University economist whose work spans an amazing breadth of […]

August 4, 2019 | An Opportunity in the Chaos

One reason the economy is so fascinating is the way things just… happen. Growth blossoms if everyone just follows their own incentives and nothing gets in the way. The courage, vision and passion of entrepreneurs and those who risk their money backing them is one of the most inspiring aspects of modern civilization. Adam Smith’s […]

July 28, 2019 | Money of the Future

As I work on my book about the future, I think a lot about the ways possible events will affect our money. But I’m also thinking about something else: What kind of money will we use? The answer might seem obvious: dollars, euros, yen, all the government-issued fiat currencies that are the economic water in […]

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