Uncle Sam Won’t Go Broke: The Misguided Sovereign Debt Hysteria

by David Levy and Srinivas Thiruvadanthai

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.
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The Contained Depression

by David Levy

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.
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India: Inflation Still Too Hot, Growth Still Too Cold-and Getting Colder

June 2013, by Robert C. King

There is no prospect over the next 12 months for an attractive combination of inflation and economic growth in India, warranting caution for international investors.
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TIPS Market: Paying Too Much For Insurance

May 2013, by Srinivas Thiruvadanthai

U.S. and global economic conditions remain disinflationary, and paying close to 1% to protect against a nonexistent threat of rising inflation over the next several years is buying unnecessary insurance.
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Profit Margins Are Plump: Understanding Why, and How They Will Change

February 2013, by Srinivas Thiruvadanthai and Kevin Feltes

Many think of profit margins for the aggregate economy as they may think about margins for an individual firm – erroneous reasoning that can get investors into serious trouble. The soundest way to think about the determinants of profit margins is to look at the profit sources.
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Long-Term Treasury Bond Fundamentals Remain Strong

November 2012, by David Levy

Recent spikes in Treasury bond yields have evoked talk about a “bursting bond bubble.” Notwithstanding, the major long-term Treasury yield trend is still downward.
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Emerging Markets Face Stiff Headwinds

September 2012, by Srinivas Thiruvadanthai

While most analysts recognize the short-term pitfalls facing emerging markets, they fail to see the structural transitions that many EMs are undergoing. Because of these difficult transitions, emerging market assets are likely to be disappointing and volatile over not only the next few months, but also the next several years.
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The Exaggerated Importance of Quantitative Easing

July 2011, by David Levy and Srinivas Thiruvadanthai

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.
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