Summary July 2023 Newsletter: Fiscal Dominance - Lyn Alden www.lynalden.com
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Lyn Alden's newsletter discusses the connection between fiscal dominance, interest rates, and inflation, predicting an increase in inflation and questioning the effectiveness of interest rates.
Slides
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Key Points
- Fiscal dominance is a key topic explored in the July 2023 newsletter, discussing the relationship between interest rates and consumer price inflation.
- The year 2022 was challenging for investors, with tightening monetary policy and reduced fiscal deficits leading to negative GDP growth and indicators suggesting a recession.
- In late 2022, there were signs of change, with the U.S. Treasury injecting liquidity into the market, the dollar index declining, and fiscal deficits growing again.
- The use of interest rates as a policy tool to fight inflation may not be effective when fiscal deficits are the primary cause of inflation, as seen in the 2020s.
- The rising federal debts and deficits will continue to increase fiscal dominance, making interest rates less useful as an inflation-fighting tool over time.
Summaries
31 word summary
Lyn Alden's July 2023 newsletter explores fiscal dominance and its impact on interest rates and inflation. Alden predicts inflation due to recent fiscal policy and questions the effectiveness of interest rates.
43 word summary
In the July 2023 newsletter, Lyn Alden discusses the concept of fiscal dominance and its relationship to interest rates and inflation. Alden argues that the fiscal policy implemented in recent years will lead to inflation, and that interest rates may not be effective
205 word summary
In the July 2023 newsletter, Lyn Alden discusses the concept of fiscal dominance and its relationship to interest rates and inflation. Alden argues that the fiscal policy implemented in recent years will lead to inflation, and that interest rates may not be effective
In the 2020s, inflation is primarily caused by fiscal deficits, but the Federal Reserve is using outdated tools to address it. Raising interest rates to constrain lending actually increases deficits and widens the federal deficit. The Federal Reserve is limited in
The impact of interest rate increases on private sector activity depends on whether a country relies on fixed-rate or variable-rate debt for its housing sector. In the United States, over 90% of mortgages are fixed-rate, so when the U.S. Federal
In the July 2023 newsletter, Lyn Alden discusses the use of bitcoin price proxies in portfolios and recommends holding actual bitcoin for exposure to the cryptocurrency. She also mentions having three other real-money model portfolios and personal accounts at Fidelity and Schwab
This newsletter provides equity research and investment strategies for managing money in all market conditions. It covers topics such as market valuations, contrarian investing, dividend stocks, building wealth, increasing credit scores, saving money, investing basics, retirement plans, surviving market