Sample of Recent Publications
Uncle Sam Will Not Go Broke: The Misguided Sovereign Debt Hysteria
Skyrocketing U.S. public debt will not lead to default, inflation, necessarily higher taxes, or necessarily slower economic growth in the future, given the unique economic environment. Public debt in the United States, the United Kingdom, and Japan can go much higher than people think--and has before--without causing the dire consequences that many fear.
The Contained Depression
This special memo provides a condensed explanation of our diagnosis of the current, unique period in U.S. economic history and a brief overview of implications for the future.
Low, Low Bond Yields Are Not a Conundrum
Many analysts are puzzled by how low Treasury bond yields have been, particularly in relation to inflation expectations and yields on equities. But the low yields are not a conundrum, and yields are likely to remain low for a long time.
Massive Federal Deficit a Critical Support to Profits
The expansion of the federal deficit has been almost entirely accountable for the rebound in U.S. corporate profits since 2008. As such, the deficit is a critical swing factor for the economic outlook.
Monstrous European Threat
Europe, like the United States, is in a contained depression; its biggest underlying problem is not high sovereign debt but overgrown private balance sheets that must contract. For numerous reasons, Europe may struggle more than the United States to contain its depression, increasing the likelihood of a financial crisis or economic downturn.
The Exaggerated Importance of Quantitative Easing
There is a pervasive belief that quantitative easing has had a significant role in boosting economic performance, raising asset values, increasing headline inflation, and weakening the dollar. The reality is that QE2, given its scale and under the conditions of the contained depression, has had minor and possibly insignificant direct effects.
Widespread Fear of the Wrong Kind of Price Instability
It is not inflation but more disinflation and ultimately deflation that lie ahead in the next decade. A look at numerous arguments and myths about the outlook for inflation.