Patience and Propaganda

Whether it's the economy or geopolitics, we're all just along for the ride

Have patience as the economy shifts

5% yield on cash not budging savings rates

Despite attractive incentives to save, personal savings rate is near historical lows. Reason: incomes are stretched to the max.

Financial conditions continue to worsen

Bank credit is contracting, while rates remain high and the Fed unwinds its balance sheet. The US economy remains strong, but tightening monetary conditions is still a force to be reckoned with.

Stay tuned to mid-late 2024

There are reasons to be optimistic - inflation is falling and we’re at the start of a tech boom. However, we need to wait a while before we declare victory.

If 50 years of history is a guide, it takes 12-18 months after the last Fed rate hike before we can observe its effects on employment. Assuming the July hike was the last one, that puts us at mid-to-late 2024.

Investing Propaganda: We were told it’s a gimmick

Love it or hate it, bitcoin for the win since it’s creation in 2011. That’s a long, solid track record for an asset that I was told is a scam. Is it? I don’t know. There are smart people on both sides of the argument.

Economic & geopolitical propaganda

As global geopolitical conditions worsen, it’s becoming increasingly difficult to distinguish between reality and propaganda. I second-guess every narrative.

Many times, actions speak louder than words.

For example, over the past two years, as the sands under the global monetary system shift, central banks are increasingly buying gold. The action is clear, but the reasoning is speculative.

Same goes for the war in Ukraine, which is now pushed to the back pages of the press.

Words vs actions.

The hubris that accompanied the start of this war is gone, and it has become a battle of attrition. Now, western militaries are warning they’re running short on munitions to send to Ukraine. Political support also appears to be waning for what is clearly a quagmire.

Even the economic sanctions against Russia have failed.

I’m not picking sides. I’m simply pointing out that we’re all just along for the ride and nobody really knows what’s going on.

Second-guess everything.