Joseph is the operator of Fedguy.com, a research blog on financial markets. He is a former senior trader on the Federal Reserve's Open Markets Desk, former credit analyst, and a former attorney. He is also the author of the best selling macroeconomics book Central Banking 101 and the creator of Centralbanking101.com, a site offering courses on financial markets.
It's been quite a pump. But you know, with crypto, the big question is always when to take profits. What are your thoughts on that? I've been holding $250k worth of crypto since 2021 and seen it pump n dump
I've been keeping an eye on the charts, and it does look like a major breakout. The real challenge is predicting when this pump will end. Timing the market can be tricky.
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Michael Howell has been saying markets will climb the wall of worry. I think thats spot on. Unemployment is the current worry. If the market gets scared it could price this outcome. The question is if that worst case scenario came true what are the consequences and reactions?
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Well，even establishing a sovereign fund, they must create procedures as to how to govern the investing and spending of the fund. Basically, I think it is bluff.
Sovereign wealth fund sounds like a way for government to funnel money where they want and to screw the American people when they want. Bad Idea! How about pay down the national debt or give America's a monthly retirement account or monthly wage like Alaska does for their state citizens for living in Alaska. It's time to let the American people decide where the money goes to help their future. Not some shady politician.
A sovereign wealth fund would also compete with private investors for assets. So you'd end up worth a de-facto transfer of assets from the private sector to the Federal government.
Can you do a deeper explanation of Professor Hanke’s ideas that there is a strong link with a 2 to 3 year lag between M2 money creation and the inflation rate. What are the pros and cons of this theorem as the Fed seems little interested in the level of M2 money creation growth.
Trump will be the last nail on USA empire's coffin...He will use the wealth fund to channel money into certain interest groups, for example, bitcoin holders
US can never have sovereign wealth fund. It's that simple. US deficits is the feature of global economy so where in the world would they have excess capital to do so. One other way to do it take control of Mag 7 and say we will decide where you invest money and allocate the resources but then isn't it already happening. 🤣
Your point of view makes sense. The U.S. fiscal deficit is indeed an important feature of the global economy, and the establishment of sovereign wealth funds is closely related to the availability of funds. Although the United States does not have sovereign wealth funds similar to other countries, its Influence in the global economy manifests itself in many ways, including control of large businesses and the allocation of resources. However, decisions about investment and resource allocation are often complex and multi-layered, involving multiple economic factors and policy considerations.
Print money to put in a sovereign wealth fund 😂😂. We are officially in clown 🤡 world!! If they are planning on doing that then they need to put it in the hardest asset mankind has created #Bitcoin Cheers Joseph
We already have a sovereign wealth fund. It is called Social Security. One of the largest in the world. Yet the government has mismanaged, corrupted, and pilfered that fund until it is now insolvent. Why do we want more of that??
Another insightful update Joseph! Regarding the Sovereign Wealth Fund, I know it's discussed in this video as the federal gov needs to raise money for the fund, but they actually already have a specially book-kept wealth fund set aside in the form of the social security trust fund. IIRC, it has about $1t remaining and is currently invested in "special purpose" government bonds, which don't trade openly, but rather are funded through the general budget through redemptions. I've been arguing for years that a way to fix Social Security's shortfall is to convert it from the current special purpose bonds yielding ~3% on average into a broadly invested sovereign wealth fund. It would take an act of congress, as currently the Social Security Act requires excess funds be invested in these special purpose bonds, but if the creation of a sovereign wealth fund already involves an act of congress, then it could be a multi-purpose legislation for putting Social Security on a path to to sustainability given the revenue shortfalls that exist currently. It's the only path forward for Social Security without cutting benefits, raising taxes, or funding deficits from the general budget. (Although that last option defacto occurs already with the special bond redemptions to cover existing shortfalls).
As usual, a wonderful presentation, Joseph. That was quite useful, thx. Exactly to your point at apx 10:35 … “this is a strange idea” relative to the idea of a U.S. sovereign wealth fund: Isn’t it though! It IS VERY strange. It is very strange that we could even countenance a meme like a “U.S. sovereign wealth fund” given our current …… oh, how should we say …… pecuniary trajectory? Borrow money (print treasuries). Yeah. That’s a great idea. We’ll use that money to invest in a better future. (Better for our children’s future, of course! Gotta remember the young people.) I’m not the sharpest knife in the drawer but even I don’t believe we can borrow to invest our way out of this. Hey! Here’s an idea - (Joseph I’ll bet you’ll be on-board with this one) - we could at least begin a conversation on the runaway spending, the 33 trillion in current debt, and the 195 trillion in unfunded liabilities. (Copilot). (I think I’ve heard higher. The name Druckenmiller vaguely seems relevant, here.) WE HAVE A SOVEREIGN WEALTH FUND ALREADY! Yeah! We already have one! And yes, we will be bequeathing that to our children, their children, theirs after that, etc., etc. The only thing is … the sovereign wealth fund we’re bequeathing is a negative $228-trillion-dollar hole. Thanks again Joseph.
Australia still has high inflation caused by out of control mass intake of low skill unproductive migrants, government allowing foreign companies loot our resources and sell our own gas back to us for high price so energy with fuel is most expensive here in the world. Also, rent prices are skyrocketing as there is nowhere left to live and our streets are filling up with homeless people.
We have been living roaring '20's......... let's see how things go :-) Big money can be made and ultimately people that are not debt strapped be ready for some deals :-)
Absolutely agree on yr take of sovereign wealth fund for US. Just another way to print money without being held accountable. N bail out for the rich elite.
Why do we keep talking about recessions? Doesn’t it seem that the economy is doing really well? Does reverse hysteresis have anything to do with this? It seems that the system has changed and our old ways of analyzing the economy are less robust
Joseph, even if you believe in the numbers, they are likely to be revised, and of you go into the weeds if the report, we are actually loosing full time jobs, and the only reason why we have a positive number is that the gain of part time job out weight the loss of full time job. However, full-time jobs benefits the economy more than part-time jobs. With that, I think the weighted job creation number can be negative. Do you think so?
00:06 US Labor Market is showing signs of deceleration 02:16 Hiring tensions are lowest ever, but firing intentions for tech show signs of white collar recession. 04:31 Labor market data indicates potential economic slowdown 06:48 Canada and Australia both facing challenges from migration, resource extraction and inflation 09:04 Canada and Australia's differing inflation rates due to interest rates and supply chain differences 11:13 Countries with surplus oil revenue invest in Sovereign wealth funds for future security 13:18 Sovereign wealth fund to invest strategically in resources and technology. 15:28 Concerns about circumventing Congress with a Sovereign wealth fund Crafted by Merlin AI.
Printing USDs to buy BTC or gold makes total sense. Especially BTC which is finite. There is an infinite amount of USDs. While the world still accepts USDs as the reserve currency it makes sense to scoop up scarce assets.
Strong disagree on reasoning here. The "we already do that" argument also applies to executives influencing politics and to mind boggling amounts being spent outside purview of congress by e.g. pentagon year after year, when their audits are "full of irregularities". A soverign wealth fund allows real assets to be accumulated with paper; allowing the US to eventually service its mounting debt without reducing spending or raising taxes. Seems like a natural evolution of the devaluation of currency. At first its gold and paper backed by gold. Then they confiscated the gold. Then its paper, by backed an economy. Next, selling treasuries to buy assets in the real economy feels like a spiritual continuation and therefore inevitable.
I wonder how much more unwinding of the Yen carry trade will take place and whether or not that is the driving force behind the past week of stock market movements.
Yea people had said several weeks ago "oh looks like that's done now" - it most definitely does not. Maybe somebody's idea of "the" yen carry trade, but in reality there's dozens or more of trades, some of which couldn't have gotten out my now if they tried. Namely China-based ones. Curious how offshore-onshore yuan ratio seems to telegraph
