Category Archives: Budget Deficit

Mr. Market’s Biggest Headwind

At the end of September, we posted our analysis of the structural changes taking place in the Treasury market,  The Gathering Storm In The Treasury Market 2.0,  which was very well received and still getting thousands of hits per week. Crowding Out Our … Continue reading

Posted in Budget Deficit, Capital Flows, Interest Rates, Uncategorized | Tagged , , , | 20 Comments

America Thirst: China’s Flows Worrisome – Art Cashin

Just before the close, Art Cashin, one of the best out there, cited the weak Treasury auctions and, ergo, worries China is pulling back on its Treasury purchases as a major factor behind the ugly stock sell-off. Click here for … Continue reading

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The Gathering Storm In The Treasury Market

Summary Our analysis provides kind of a Grand Unified Theory (GUT) of what is currently taking place in global financial markets The massive borrowing by the U.S. Treasury is crowding out emerging markets capital flows The structural factors that have kept long-term … Continue reading

Posted in Black Swan Watch, Bonds, Budget Deficit, Capital Flows, Emerging Markets, Fiscal Policy, Interest Rates, Uncategorized | Tagged , , | 54 Comments

When The U.S. Government Defaulted

One of the most pervasive myths about the United States is that the federal government has never defaulted on its debts. There’s just one problem: it’s not true, and while few people remember the “gold clause cases” of the 1930s, … Continue reading

Posted in Bonds, Budget Deficit, Sovereign Debt, Sovereign Risk, Uncategorized | Tagged , , , , , , | 43 Comments

QOTD: Druck On Distorted Interest Rates

…today we have settled to allowing the most important price of all, long-term interest rates, to be regularly distorted by public intervention. …If I were trying to create a deflationary bust, I would do exact exactly what the world’s central … Continue reading

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COTD: President Trump’s Proposed Tax Reform

Individual income tax makes up around 49 percent of the Unites States tax revenue, the single biggest position, according to inside.gov. Trump wants to simplify the tax code by bringing the number of income tax rates from now seven down … Continue reading

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Orwellian Monetary Policy

“Tightening is Easing” Since U.S. monetary policy began tightening in December 2015, the Fed has added liquidity to the financial system through interest payments to banks on excess reserves and has reduced its surplus to the Treasury adding to the … Continue reading

Posted in Budget Deficit, Interest Rates, Monetary Policy, Uncategorized | Tagged | 36 Comments

Quote of the Day: EU Policymakers on Hopium

The primary strategy being pursued to prevent a further worsening of the situation is that of hope. And it is a strategy also being applied to the danger of further contagion. Greece, Ireland, Portugal, Spain: So far, European leaders have … Continue reading

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Quote of the Day: Fiscal Barbells

And to this we say,  AMEN! The right policy, which also happens to be the only one with any hope of being adopted in the foreseeable future, is a barbell approach, with more stimulus on one side and, on the … Continue reading

Posted in Budget Deficit, Fiscal Policy | Tagged , , | 2 Comments