Over My Shoulder | Mauldin Economics

Over My Shoulder

Charles Gave: Trump and the Dollar Standard

January 20, 2017

Charles Gave finds himself encouraged by the broad thrust of Trump’s economic program but deeply worried that the US’s emerging protectionist agenda could wreck the dollar-based credit system that underpins global financial markets. In this paper he explains how the dollar standard was always more vulnerable to a US wrecking action than foreigners losing confidence in the dollar as a store of value. Charles also offers a modest proposal to Trump, to avoid dragging the world into a rerun of the 1930s.

Download - Gave_-_Dollar_Standard.pdf

David Kotok: “Japan. An Inflection Point”

January 19, 2017

My friend David Kotok offers us some really solid insight on Japan and its retirement issues. And then talks about the same trend in the US.

Does this situation portend a change in the American view of the elderly and pre-elderly, too? We cannot say, because the political fight would be fierce. In Japan, the society had to be forced to make this change out of absolute necessity. My best guess is that America is likewise incapable of being proactive, which means it will be a retirement funding crisis here that ultimately compels us to update and match benefits with life expectancies.

This will be one of the biggest political fights of our lives in 5-10 years.

Download - Japan_-_An_Inflection_Point.pdf

Richard Maybury: “Adapting to and profiting from the collapse of the federal government’s empire”

January 17, 2017

Today I have for you the last in our series of 2017 forecasts. This one comes from Richard Maybury, author of the U.S. & World Early Warning Report (EWR), who says of this piece, "I have never before written anything as important as this..." -- so you know the guy is worked up about 2017! And sure enough, in the very next paragraph he tells us, "This EWR is less about Trump than about the new world he has created. As US president, he is global emperor, and has apparently chosen to follow in the footsteps of Benito Mussolini, probably unwittingly." Well, that's a bit extreme, but Richard does share a number of my concerns about the deeper structural challenges that our economy faces. He continues:

"When I hear someone say what’s off-kilter about America is the wrong people are in power, and to fix it we need the right people in power, my reply is, the problem runs a lot deeper than that."

I don't agree with everything this guy has to say, but he's certainly worth a careful (and cautious) read.

Download - jan_2017_ewr_mkux-1.pdf

Michael Lewitt: “Faking It”

January 14, 2017

In this second in our series of 2017 forecasts from astute friends, Michael Lewitt of The Credit Strategist leads off with a few trenchant thoughts on the roots of "fake news," then digs right into some "difficult" analysis of the prospects for markets in the coming year.

Download - TCS_1-1-17_FINAL.pdf

Justin Wolfers: “Why Most Economists Are So Worried About Trump”

January 12, 2017

I'm going to be writing about this whole problem with economics in two weeks, but I thought I would send you this now. It's more than just the PTESD – Post-Trump Election Stress Disorder – that I talked about in yesterday's OTB. These economist guys, who have a track record of being remarkably removed from the real world but who feel their theories deserve something like biblical status, are truly worried about being left out of the room as decisions about the economy are made by the new administration. I mean, seriously, can you  imagine decisions being made about the economy by the people who participate in it as opposed to those who merely theorize about it? Catastrophic!

I am more and more convinced that the bulk of the economics profession is founded on false premises, and thus it is not surprising when their models turn out to have no value in predicting the future or telling us what we should do. They're not even very good at predicting the past. Seriously.

There is a very small but growing group of economists who are beginning to discuss economics in terms of complexity theory. It may take them a few generations to unseat the academics who are not going to want to give up the orthodoxy of the old-time religion.

Download - Why_Most_Economists_Are_So_Worried_About_Trump.pdf