Macro Musings #0002

Last May I wrote "Macro Musings #0001".

I was wrong about a lot of what I wrote. Despite the Fed continuing to keep "Monetary Policy" tight, the Treasury and various manipulations and distortions of the money system (issuing only T-bills, the Bank Term Funding Program, and promises of future dovishness, i.e. "Jawboning") all kept the markets going up.

I now take it as the Supreme Directive of the Fed + Treasury to pump liquidity and prop up markets and incumbent octogenarian politicians they favor.

I was misguided based on my own read of the total macro picture, but also because I listened to people like Danielle DiMartino Booth, a former Dallas Fed employee and (ironically) author of the book "Fed Up"; and Tom Luongo, a "former research chemist turned geopolitical and market analyst" who should have stuck to chemistry...

DiMartino Booth argued that Powell was a benevolent monetary dictator, a Centillionaire who really cared about the people, didn't need the job, and was determined to get inflation down. As if he could do anything about profligate government spending and Fiscal Dominance! – And then there's Luongo. He argued Powell was a Hero who was fighting the Globalists, a man who would keep the Dollar dominant by hiking rates to "starve the Brussels Beast and knock the WEF in the teeth".

They were both wrong. Powell is powerless. The Treasury holds the purse strings. Their combined effect and machinations simply kick the can down the road.

We're all a lot poorer now, those who didn't already own a ton of assets. Homes are harder to afford, and bitcoin and gold are both at or near all time highs again.

The simple solution would be to have picked a fixed allocation that is immune from money printing. Some combination of Gold + Bitcoin + Real Estate, leaving out whatever you don't care for and then keeping some amount of Cash to cover expenses. Set It and Forget About Those Macro Pundits.

Macro Musings are dangerous. I for one will avoid making predictions about the economy and asset prices going forward. Hold me to it!

Beware the Fiat Dragon!