Blake Hampton

Yeah I just thought about it for more than 2 seconds, and $36 trillion is an insane amount. That was way wrong.

I don't know how accurate this figure is, but GuruFocus says the total liabilities for the S&P 500 total about $36 trillion. https://www.gurufocus.com/economic_indicators/5751/sp-500-total-liabilities

Well, I measure productivity increases in GDP, and debt to GDP has been growing at a rapid clip for a while now. I would say that, over time, and adjusted for increases in productivity, there is a direct 1:1 correlation between inflation and the money supply. The problem that the United States is in is that the amount of borrowing is getting to a dangerous point. I believe that debt markets can break in a way that directly leads to inflation. If Treausry market liquidity is expected and it dries up, and the government is still continuing to run these large deficits, the only person who can step in to fill that void is the Federal Reserve. They accomplish this by printing money. 2020 and 2008 were not the same. 2008 was about easing, 2020 was a liquidity crisis. We almost had another on April 9th.

I think a lot of that debt hasn’t rolled over yet at these higher rates. Large-cap equity has some of the best financing terms in the world, and they’re generally smart enough to take advantage of that. Likewise, the market is just dumb enough to finance them for long stretches at low rates.

I don’t understand how deflationary forces could ever be big enough to offset these levels of deficits and monetary expansion. As Paul Volcker said in his book, serious deflationary events only happen when you’re facing a systemic collapse in the financial system. I think that it’s entirely possible that this could happen, but I also think there are too many safeguards in place to let it truly collapse. The U.S. government can always save the day with more money printing.

Now, we have a president who is destroying what little faith the world still had in us, even though we rely on that same world to absorb our debt. How exciting.

I would say that both the president and Congress don't care about responsible fiscal policy at all, so maybe taxes and spending don't go anywhere. This still has its own set of consequences. "Money doesn't grow on trees."

1.) The deficit is on track to surpass well over $2 trillion this year. Our country must raise taxes and cut spending if they ever hope to get control of this, and corporate taxes are a large part of that. It's simply unsustainable and our country hasn't had to pay for it yet. 2.) Financing deficits through debt is only a more convoluted way of printing money. When you finance a fiscal deficit through issuance of Treasury bills, you're effectively printing a cash equivalent to finance the overconsumption of your country. The way that we ultimately pay for these deficits will be inflation, and inflation and interest rates are tied together in a huge way. Inflation, in effect, can become a discount rate for bond securities. This is a big reason why interest rates actually rise during inflationary periods. Why would you lay out your cash for a security yielding 5%, when you can take that same money and go buy goods and services increasing at a rate of 10%? Now the Fed can decide to cap yields, but if the Treasury doesn't get Fiscal policy in order, this simply results in more inflation.

It's probably better than owning cash.

People buying stocks at 100x earnings will say it's normal.

The market is currently selling at 4.4x book, with an average 25-year ROE of 13.3%. I’d make a strong bet that both corporate taxes and interest expenses will be significantly higher, on average, over the next 25 years than they were over the last. Given that, the ROE is likely overstated. It’s not pricing in anything, it's a bubble.

Trump Is Laying the Groundwork to Blame Powell for Any Downturn - WSJ

I fear ChatGPT confirmation bias.

I don't understand why the world has to fight. Globalization has benefited everyone, even if parts of it have been unfair at times. I get that leaders need to be tough and show strength, but there is zero reason to be an asshole who isolates themself from everyone. If I were president, I’d be best friends with all these other countries—Canada, Mexico, countries in Europe, even China. I understand taking a tougher stance on trade, but what’s happening right now is literally madness. We have a president creating tax policy on his own, using emergency powers, that's going to affect the lives of billions. It’s also triggering a chain reaction of events that could be devastating to the United States. It infuriates me how incompetent the leadership of my country is, and I think this is headed toward a bad end. The saddest part is that the people who'll suffer the most will have had the least responsibility in causing it. It’s sickening.

We're cutting off aid to Sudan, possibly leading to the starvation of hundreds of thousands of people, maybe even millions, only to have the budget deficit keep growing because we refuse to touch entitlement spending. And at the same time, we're cutting even more taxes. What the actual fuck. This is the fiscal folly Buffett was talking about in his shareholder letter.

I just learned that technically "petrodollars" are "U.S. dollars paid to an oil-exporting country," not the fact that oil is actually priced in dollars.

The point I'm trying to make is that oil is priced in dollars. People talk about gold being "base money," and that's sort of how I see crude.

Petrodollar. Only problem with oil is it doesn't store well (above ground).

Welcome to the arena.

< 27% normal or underweight

No you're right.

I’m not a huge fan of gold, but central banks around the world are buying record amounts of it. I think you’d be better off with certain types of equities or real estate, but I also think that central bankers are generally pretty smart when it comes to money. Bitcoin is a hard pass though.

"Biting the hand that funds"

Some of them almost sound excited. I don’t understand why anyone would welcome that kind of hell.

If the administration gets its way in massively devaluing our currency, the American people will eat them alive. These are big problems.