Thoughts from the Front Line - We have been looking at big historical/economic/political cycles for the past two months. We reviewed Neil Howe’s Fourth Turning concept, then George Friedman’s twin US institutional and socioeconomic cycles, then Peter Turchin’s “cliodynamics” concept, and then Ray Dalio’s Big Cycle. None of these theories exclude the others. It is quite possible they are describing the […]

Thoughts from the Front Line - When your system, whatever it may be, is working extremely well, we used to say it’s “firing on all 8 cylinders.” What does that mean? A gasoline motor contains metal cylinders inside which the gasoline burns (hence “internal combustion engine”) and causes belts and gears to turn. A V-8 engine has eight cylinders arranged in […]

Thoughts from the Front Line - “…what I learned is whatever successes I had in life had to do more with how I dealt with what I didn’t know than what I know… “…the reason I did that book is because there are things that are happening now that never happened in our lifetime before, and I want to be like […]

Thoughts from the Front Line - Intermission is over. Today we resume my series on the global cycle theories that, probably not by coincidence, all point to major change unfolding in the next few years. Finishing it may take some time since I keep finding new material. (If you missed—or want to review—the previous installments, check out this X thread for brief summaries […]

Thoughts from the Front Line - Greetings from Europe. I promised to write a letter describing my personal investment portfolio. I still plan to, but it won’t be this week. Shane and I are having a wonderful trip—a much-needed break for both of us. I will leave you with a suggestion, though. My ongoing series about cycles contains some of the […]

Thoughts from the Front Line - Look up the word “cycle” in a dictionary, and you’ll find something like this: “A regularly recurring sequence of events.” Sounds simple, but that definition leaves a lot of ambiguity. Zoom in on the “regularly recurring” part. A recurring event is one that happens repeatedly. Wherever on Earth you may be, the sun reliably rises […]

Thoughts from the Front Line - Today we continue our study of the historical cycles suggesting a major crisis is in our near-term (5‒8 years) future. We don’t know the precise timing or nature of the crisis, but the patterns indicate one is coming and could be severe. As with many therapeutic programs, the first step is admitting you have a […]

Thoughts from the Front Line - Everything about human life has a rhythm. It is literally built into our bodies: Your heart beats in a repeating pattern that keeps you alive. Your breath is another pattern. Repetition is natural for all of us individually and for the societies we create together. Every society has its own rhythms and traditions. But there are larger, […]

Thoughts from the Front Line - The Old Testament portrays King Solomon as the wisest of all men. In addition to recording his wisdom in the book of Proverbs while dealing with 700 wives and 300 concubines, he also became a chart-topping songwriter in the 1960s (some 3,000 years after his death) with a little help from Pete Seeger and the […]

Thoughts from the Front Line - My friend Neil Howe titled his latest book The Fourth Turning Is Here because, well, the Fourth Turning is here. It is no longer the decades-away crisis he and the late William Strauss described in their 1990s books. As noted last week, each “turning” is generally 20 to 25 years. We are in the last half of […]

Thoughts from the Front Line - We talk frequently about the way central banks and governments affect the economy. In the grander scheme of things, though, whatever the Fed does is more like throwing a hand grenade into a large building. Yes, you’ll make some noise and cause some damage. People may be hurt. But the building won’t care, and the […]

Thoughts from the Front Line -   While inflation is technically about general price levels, in practice we use it to describe living costs. That’s why the benchmarks measure consumer prices and personal consumption expenditures. These are where higher prices hurt because they apply to everyone. Other measures like the Producer Price Index have valuable information but are less immediately relevant to most people. But […]

Thoughts from the Front Line - The market, and maybe all of us, would like to believe the latest 3% annual CPI number was a harbinger of ever-lower inflation, and we are on the road to 2% inflation by year end. I would argue, “Not so fast.” Inflation is far from dead, and CPI will likely go slightly up between now […]

Thoughts from the Front Line - “A man hears what he wants to hear and disregards the rest…” —The Boxer, Paul Simon, 1969 One of the hardest parts of economic forecasting is separating what we expect from what we want. Actually, this is part of the human condition, genetically programmed into us and affecting every part of our society and lives, not just economic […]

Thoughts from the Front Line - National leaders are (or should be) reluctant to enter wars because, once begun, they are often hard to end. You could be bogged down for years, vainly trying plan after plan as the damage accumulates. Monetary policy works the same way. Central bankers think they can handle a situation and fire the artillery. It always […]

Thoughts from the Front Line - I’ve often thought it would be fun to convene a therapy group of weather forecasters and economic forecasters. Both face the same frustration: Everybody wants a clear, simple answer they can’t possibly give, because they don’t know. Then they get blamed for being wrong anyway. In both weather and the economy, the best we can […]

Thoughts from the Front Line - A year ago, the US Consumer Price Index was rising at an almost 9% annual rate. The Federal Reserve was trying to change that trend with tighter policy. But it wasn’t just the Fed. All of us—businesses, consumers, everyone—responded to the pain. Good news: Our collective decisions seem to have had the desired effect. Annual […]

Thoughts from the Front Line - In economics we often talk about cycles. “Business cycle theory” is an entire academic sub-field whose basic idea is that economic history really does repeat itself. Not in every detail, of course, but as a recurring sequence of expansions and recessions. More broadly, some historians think human civilization goes through cycles. Often, they base this […]

Thoughts from the Front Line - “Crisis” is an overused word. Actual crises are those rare times when we are on the knife edge of disaster. It’s not a crisis when a bank fails, or Congress can’t agree on a budget. Those are annoyances (unless it’s your bank). While not good, they don’t spell immediate catastrophe. I’ve long been predicting a […]

Thoughts from the Front Line - Business media is famous for propagating buzzwords and phrases, especially if they produce more clicks. The latest is Artificial Intelligence. It’s everywhere and is now a fixture in earnings calls, too. Every CEO is getting asked how AI will fit into or affect their company. It’s not quite as bad as every CEO trying to […]

Thoughts from the Front Line - We often talk about technology’s influence on the economy. After the Strategic Investment Conference, though, I’ve decided that isn’t strong enough. It’s more correct to say technology is the economy. But when I use the word technology here, I’m not talking about the big, nifty eight tech companies that dominate today’s stock market. I’m talking […]

Thoughts from the Front Line - This year’s Strategic Investment Conference is wrapped up, but it’s not over. We spent five days thinking the unthinkable. I, for one, will continue not just thinking about it but meditating on it. I believe we got some serious insight into this decade’s fin de siècle. I’ve dubbed it The Great Reset. Others have different […]

Thoughts from the Front Line -   World economic growth is slowing. That’s so obvious, very few will disagree. I suppose there are people out there predicting imminent 1990s-like expansion, but they are few and far between. If recession begins soon, it will be the most anticipated one in history. This was a prime question at my Strategic Investment Conference, which […]

Thoughts from the Front Line - The week we’ve been waiting for is here. The Strategic Investment Conference starts Monday, and we have a jam-packed schedule. This year is clearly the best SIC we’ve ever had in 19 years—a wide-ranging set of topics dealing with the issues that are most important to each of us. You really should join us. You […]

Thoughts from the Front Line - Back before clocks went digital, you could say “a stopped clock is right twice a day” and even youngsters would know what you meant. A mechanism could be nonfunctional but occasionally correct. So it is with the Federal Reserve and its leaders. They make many mistakes but sometimes get it right. They are doing so […]