I received undergraduate and graduate degrees in economics and finance from the University of California, Los Angeles, 1968. My professional expertise is in macro-economics; currency and trade strategies; interest rates and yield curve analysis and fixed income strategies. For the past two decades ...
more I received undergraduate and graduate degrees in economics and finance from the University of California, Los Angeles, 1968. My professional expertise is in macro-economics; currency and trade strategies; interest rates and yield curve analysis and fixed income strategies. For the past two decades I advised an independent brokerage firm on capital markets, and yield curve analysis and portfolio management. Prior to that, I worked as senior consultant, with Peat Marwick and Partners (PMP) and A.R.A Consultants, responsible for projects in infrastructure, industrial strategy and public finance. From 1972 to 1980, I was Director of Research at C.D. Howe Institute, overseeing research in Canada-US trade, currency developments, and Canadian monetary policies.
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Latest Comments
Can A Stimulus Program Really Boost The U.S. Economy?
Your point is well taken. The 2009 did have some infrastructure expenditures, but there were so few shovel-ready projects. Today, I have not seen any real evidence that the government has a well-documented list of infrastructure projects, just a lot vague ideas.
Bondholders' Greatest Fear: Will Trump’s Fiscal Deficits Lead To Inflation?
Gary, I view 'non-inflationary ' growth to be the situation we have now. Nominal growth of 3-4% made up of inflation, less than 2%, and real growth at 2%. The Trump stimulus package is small in relative and absolute terms than that of the Recovery Act of 2009 which was in the $850 billions range. So, I do not see how $700 billions over the next decade in an economy that grows at 4% nominal can have much impact.
The Flawed Logic Of Inflation
To take this argument one step further, I would suggest that the target for central bankers should be nominal growth. Right now, nominal growth is too low--around 3 % made up of equal parts of inflation and real growth. An economy growing at this nominal rate does not pose any threat from runaway inflation and monetary policy should remain where it is. Setting a target of much higher nominal growth, say 5-7% would allow policy to promote growth.
Central Bank Victory And Negative Bond Rates
I agree with the premise of this argument.
The negative yields are no passing fad. It is hitting the shores of North America. Yesterday, the Canadian bank, CIBC, issued over $1.25 billion in covered bonds ( collateral Canadian mortgages) which immediately traded a negative rate, demand was overwhelming.