Thoughts from the Front Line - As longtime readers know, I am working on a book outlining five different theories on historical cycles and how their predicted “climaxes” all occur around 2030. I’m also very concerned that around that time (if not before) we will see the bond market react badly to the fast-growing national debt. While my poor editors at […]

Thoughts from the Front Line - Energy is everything. Or, if Einstein was right, you and I are just energy in material form. Accelerate us to lightspeed squared and we might become something else. All economic activity involves converting energy from one form to another. This requires harnessing sufficient quantities of usable energy. That task is becoming more difficult, to the point economic […]

Thoughts from the Front Line - Ever notice how “home” is so important to our holiday traditions? It’s hard to imagine Christmas without images of a fireplace, a tree, some food, and rooms with festive decorations. Families gather in such rooms to form lifelong bonds and memories. My neighborhood here in Puerto Rico really goes all out on Christmas decorations. There […]

Thoughts from the Front Line - Politicians and think-tank wonks of all stripes love to condemn government “waste, fraud, and abuse.” But saying it isn’t hard. Who is the opposition? No one says we need more waste, fraud, and abuse. We’re all 100% agreed all three are bad. It’s when you get specific—saying this agency or that program isn’t accomplishing what it should—that […]

Thoughts from the Front Line - Two weeks ago, I opened this letter by noting the election uncertainty, once over, would give way to a different uncertainty about what comes next. That’s where we are now. I fully expected a closer outcome that would take some time to resolve. Instead, we have an undisputed president-elect moving full speed ahead. And what […]

Thoughts from the Front Line - I went to bed “early” on election night, around 10:30 pm. We are in the five months of the year where Puerto Rico is one hour ahead of Eastern time, and nothing I was seeing made me think it would be an early night. And by that I meant 3 or 4 am. I woke […]

Thoughts from the Front Line - Anyone else ready for the election to be over? This uncertainty is exhausting, no matter how you want it to end. But sadly, it won’t really end. We will just transition to a different uncertainty over what will happen next. I will offer my thoughts on the election at the end of this letter, after […]

Thoughts from the Front Line - Here in the US, people are obsessed with the impending election. It is perhaps the World’s Largest Guessing Game. We can look at polls and make our best guesses, but no one really knows what will happen. We just have to wait for more data which will (hopefully) be forthcoming November 5 or soon afterward. […]

Thoughts from the Front Line - Official inflation data, while imperfect in many ways, at least has the advantage of being consistently imperfect. This lets us make comparisons across time. The magnitude may be off, but the direction is usually right (except at unusually sharp turns like 2020). Currently it shows most prices moving back toward “normal” with one prominent exception: housing, which […]

Thoughts from the Front Line - Two weeks ago, I began reviewing Martin Gurri’s important book, The Revolt of the Public, with this framework: “In my cycles book I’m reviewing the forecasts of Neil Howe, Peter Turchin, George Friedman, and Ray Dalio. For different historical reasons and patterns, all see a crisis culminating at the end of this decade. Some readers have […]

Thoughts from the Front Line - Last week, I said I would continue writing about Michael Gurri’s important book, The Revolt of the Public. It turns out giving a proper review of not just the book but all of the comments about the book will require more than a few days’ writing. I am going through almost 100 pages of new comments […]

Thoughts from the Front Line - I remember traveling as a young boy on long trips and asking my parents, “Are we there yet?” I was later punished for this annoying behavior by having my own children ask me the same question over and over. On a national scale, we have been asking the same of the Fed. Now I think […]

Thoughts from the Front Line - Labor Day weekend finds me in far northwest British Columbia, fishing with 29 of my readers. The conversations are deep and fascinating, and it should be no surprise that politics and markets are brought up more often than not. Labor Day is traditionally when most Americans, other than us political junkies, actually begin noticing politics. […]

Thoughts from the Front Line - There was an historically large revision to the unemployment data this week, which was even worse than the headline when you dig into the actual numbers. On top of that, there is some “behind the numbers” data on inflation, which is typically not talked about, that will have a big impact on the Fed decision, […]

Thoughts from the Front Line - In basketball and other sports, a “head fake” means the player moves their head as if they are about to turn left or right, but then doesn’t do so. This can fool an opposing player into moving the wrong way. Head fake is a trading term, too. Some bit of information convinces investors a market […]

Thoughts from the Front Line - I can’t let this month pass without noting a significant anniversary: This is the 25th year I’ve been writing Thoughts from the Frontline. The first few issues were lost to the electronic gods and my lack of technical prowess back then. That quickly changed. You can visit the archive and see every issue since January 2001 (including, trust […]

Thoughts from the Front Line - I am just a poor boy Though my story’s seldom told I have squandered my resistance For a pocket full of mumbles Such are promises All lies and jests Still, a man hears what he wants to hear And disregards the rest… -Paul Simon, The Boxer, 1969 Let the wise hear and increase in learning, […]

Thoughts from the Front Line - “Alice laughed. ‘There’s no use trying,’ she said. ‘One can’t believe impossible things.’” “’I daresay you haven’t had much practice,’ said the Queen. ‘When I was your age, I always did it for half-an-hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.’” ―Lewis Carroll This week we find our […]

Thoughts from the Front Line - The ability to choose our goods and services is fundamental to economics. The freer we are to make choices, the more the economy should prosper. That’s because our choices tell producers what works. Modern science muddies this pleasantly clear water. Behavioral economists talk about a phenomenon called “decision fatigue.” It turns out we humans would […]

Thoughts from the Front Line - We are in the time of year when Americans pack transatlantic airliners for their European vacations. I had actually hoped to be one of them. That didn’t work out but we can still talk about events in Europe. And we probably should, because potentially major changes are happening. Maybe I should say more changes are happening. Europe has already […]

Thoughts from the Front Line - I am writing this letter on the afternoon of July 4th, so it is natural to think about our government and independence. I want to comment on the Chevron case which is blowing up my X (Twitter) feed as well as my news feeds, both for and against. It is both less and more than […]

Thoughts from the Front Line -   The giant federal debt we’ve been talking about isn’t just borrowed money. It is also lent money. Loans are two-party transactions. One side receives temporary use of cash which it agrees to repay with interest. The other gives up the current use of that cash in exchange for receiving interest. Ideally, it works out for both… […]

Thoughts from the Front Line - The old saw about doing the same thing and expecting a different result is less simple than it seems. Sometimes you need a few attempts to get it right. Nevertheless, when you see a long succession of smart people doing the same thing and getting the same bad result, it’s fair to wonder what they […]

Thoughts from the Front Line - You know I’m highly concerned about government debt in the developed world, particularly the US. I’ve said for years a crisis is coming. We’ve blown right past all our chances to avoid it. Now all we can do is imagine what the crisis will look like… and how much it will hurt. This is necessarily […]

Thoughts from the Front Line - ’m writing you from Cape Town, South Africa, where I’ve been warmly welcomed and reminded how much I enjoy international travel (well, except for jet lag!). Our world has so many wonders most people never get to experience. Of course, “there’s no place like home,” but seeing other places makes me happy, too. Yet this […]