Rondonomics

In 2019 the Federal Reserve cut interest rates in an effort to stimulate the economy. But it didn't need shoring up. The Fed described it as an "insurance cut." “Members who voted for the policy action sought to better position the overall stance of policy to help counter the effects on the outlook of weak global growth and trade policy uncertainty, insure against any further downside risks from those sources, and promote a faster return of inflation” to the 2% target, according to  minutes  of the July 30-31 Federal Open Market Committee meeting, released Wednesday in Washington. - Bloomberg The Fed has a dual mandate of employment and price stability. Employment has been below 5% for years and inflation has been hovering just at or below the Fed's 2% target for even longer. The S&P 500 has returned 15% annually for the last decade. The business sector is recording record profits. Why did we need any insurance?  Because the stock market went down. A l...

Students of history know all the signs. They can identify historical parallels - the inevitable, timeless forces that drive political polarization, and ultimately the fracturing of society in democracies. Ray Dalio's Bridgewater lays out the archetype for populism, the underling conditions that fuel its rise, and typical sequence of events.... By and large, these populists took advantage of the confluence of several characteristics of the times:  Weak economic conditions, which made people disillusioned with the current ruling parties.  An uneven recovery in which the elite was seen as prospering while the common man was struggling.  Political squabbling/ineffectual policy making, preventing the bold action people saw as necessary. A feeling among a country’s majority that foreigners, or those who didn’t share the same background/ethnicity/religion, were threatening their values and way of life  Where populists achieved some measure of success, they wou...