Also, matter can neither be created or distroyed. Is the same true with wealth? Do we have a finite “pie” of wealth that moves from “family” to “family” over time? Let’s consider a given “life cycle” of family wealth. 2 to 3 generations work to build wealth. 2 to 3 generations maintain that wealth. 2 to 3 generations blow the family fortune…. in general. All of this happening when other “families” are building, some other “family” is blowing it.
In closing, EvG says, “. . . At some point, all hell will break loose. There is no question about it. It could be something very serious coming this autumn. The whole political system is fighting against Trump, and that is going to be tough, very tough. . . . The markets are giving me the signal that things are going to turn in the autumn, and you can easily find a number of catalysts for this to happen.” Read More
Blind faith in the U.S. dollar is perhaps one of the most crippling disabilities economists have in gauging our economic future. Historically speaking, fiat currencies are essentially animals with very short lives, and world reserve currencies are even more prone to an early death. But, for some reason, the notion that the dollar is vulnerable at all to the same fate is deemed ridiculous by the mainstream.
A more intelligent approach is to have assets like U.S. Treasuries during a bear market for U.S. equities. Some short positions in the most popular funds are more aggressive and also will usually be profitable. In the first year of a bear market for U.S. equities, commodity producers and emerging markets often outperform as they have already been doing since January 20, 2016 and which will likely continue through some point in 2018.
Not only does David explain the idea behind a bear market on this episode of Money For the Rest of Us, he also examines nominal yields and how they can be dissected into the expected path of future short-term interest rates and term premiums. While the drivers behind climbing interest rates cannot always be observed directly, these two main factors shed light on just how high interest rates could climb in the coming years. Also, learn how the Federal Reserve estimates the path of short-term of interest rates and why term premiums are countercyclical and tend to rise when there is a great deal of investor uncertainty.