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Demographic Trends: The Case Against Negative Interest Rates

Japan has a 2.2% unemployment rate, yet, for 30 years, they have not had any significant economic growth, due to their demographic structure. Today, the developed world has Japan’s 1990s demographic features, with falling fertility rates, rising dependency ratios (retirees/working aged), and, ultimately, declining populations. Under these conditions, aggregate GDP growth will be harder and harder to achieve. QE’s “Wealth Effect” All the central banks of developed economies have adopted the Fed’s …Read More

Markets Have Recovered, But Charts Look Like Niagara Falls

In January, the equities markets bounced from significantly oversold conditions at the end of December, on the hopes that a) the Fed stopped it tightening cycle in time, and b) the halt to the government shut-down occurred in time to avoid negative Q1 GDP growth. As I have stated in prior blogs, “hope” is not a good investment strategy. But wait! The “hope” regarding the Fed doesn’t even make sense. …Read More