Thoughts from the Front Line - If you’re a parent or grandparent, you may know of the “Choose Your Own Adventure” storybook series. Written in second person, they make “you” the hero. The reader makes choices as the story unfolds, leading to one of several possible endings. That format is disturbingly similar to a lot of economic forecasting. The economist—who of […]

Thoughts from the Front Line - One of the more fascinating and mysterious parts of watching the Federal Reserve is the ongoing dialogue between Fed leaders and Wall Street. We imagine private meetings held in great secrecy. Those may in fact occur, but I’m not sure they are even necessary. The parties exchange their requests publicly. All those speeches, interviews, and […]

Thoughts from the Front Line - Modern economies, even small ones, are unfathomably complex. The number of variables is far more than any human can comprehend or any model can track. It’s really no wonder so many forecasts are wrong. In my 2024 forecast letter I predicted “A Muddle-Through Year.” That’s still what I expect… but not for everyone, nor for every […]

Thoughts from the Front Line - “The Fickle Nature of Confidence” Stratospheric Heights Patience Pays Off New York, Somewhere in Florida, and… In thinking about the 2020s, I often find myself looking back to the 1920s. That decade began with a deep recession/depression and ended with a stock market crash. While we now see the 1920s as a kind of “in […]

Thoughts from the Front Line - “Two is better than one” is a nice saying, but it really depends on what you’re describing. Two hurricanes or earthquakes aren’t better than one. Just one disaster at a time will suffice, thank you very much. The same holds true for man-made crises like the debt fiasco we’ve been discussing. Last week in No Way […]

Thoughts from the Front Line - Having now spent almost six months describing the historical cycles and massive debt that surround us, I find myself looking for an “easy” exit. Maybe one exists, but I haven’t found it yet. I think we’re stuck. The building will have to collapse around us before we can leave. This is obviously not a great […]

Thoughts from the Front Line - First, let me wish you the best for the new year. I look forward to exploring it with you. It’s forecast season again, the time when people like me tell people like you what will happen this year. Sadly, we are often wrong. It turns out predictions are hard, especially those about the future (with […]

Thoughts from the Front Line - It’s that time of year when we start thinking about the old and envisioning the new. This has always been a special season for me, perhaps because of my unusual quirk of really wanting to divine the nature of the future—not just an investment in economics but in general. This week’s letter will be in […]

Thoughts from the Front Line -   First, let me wish you Merry Christmas, Happy Holidays or your favorite personal form of greetings for this time of year. I realize as you read this you are more focused on Christmas and the approaching New Year and family, so this will be a shorter letter than normal, but still a topic that […]

Thoughts from the Front Line - If you really want to reduce the federal debt, you don’t have to convince Congress of anything. You can just write a check. The Treasury Department gladly accepts gifts from anyone so inclined. Few are, apparently. So far this year, donations totaled less than $1 million. Shocking, no? <grin> The government’s revenue is mostly involuntary via taxes, […]

Thoughts from the Front Line - Don’t Tax You. Don’t Tax Me. Tax That Fellow Behind the Tree –   Attributed to Senator Russell B. Long, Louisiana ~1930s One thing you learn when writing about the debt problem, as I have been in recent weeks, is that many people think it’s not a problem at all. They believe we could easily balance […]

Thoughts from the Front Line - Back in the Great Financial Crisis era, someone quipped that the federal government had become a giant hedge fund with an army attached. That wasn’t far off. Various agencies and entities were absorbing all kinds of risky assets to stabilize an overleveraged system. It was ugly but worked, more or less…. with a heavy dose […]

Thoughts from the Front Line - Thanksgiving brings to mind not only turkeys, family, and friends, but also should help us recall the remarkable ideas and philosophies that helped shape, and indeed were, the foundation for the United States of America as a Republic. In that spirit, we will forgo for this week the series we have been exploring on cycles […]

Thoughts from the Front Line - If you get beyond the political rhetoric [and assembled a group to solve Social Security] it would take them 15 minutes. It would take them 15 minutes only because 10 minutes was used for pleasantries. —Alan Greenspan, Speech to the Commercial Finance Association on October 26, 2006 The federal government starts a new fiscal year every […]

Thoughts from the Front Line - Exploring federal budget data is a journey through endless rabbit holes, some of which are eerily close to Alice in Wonderland insanity. Countless variables interact in unexpected ways. Seemingly small changes can cascade into billions of dollars within a few years. Exploring federal budget data is a journey through endless rabbit holes, some of which are eerily […]

Thoughts from the Front Line - Identifying problems is great. Identifying solutions is even better, especially when the politicians who are supposed to be solving our big problems don’t even try. In last week’s Debt Catharsis letter, I offered some ideas to start fixing the federal debt problem. To be clear, those ideas won’t balance the budget and in many ways are woefully inadequate. But […]

Thoughts from the Front Line - The ancient Greeks had a word κάθαρσις, which in English we now spell as “catharsis,” although it’s pronounced basically the same. It originally referred to purifying religious ceremonies, medical treatments, and so on. Aristotle was the first we know to have used the word in a non-physical sense. He compared the emotions felt by spectators […]

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, […]