We Study Billionaires - The Investor’s Podcast Network TIP700: How to Invest during Fiscal Dominance w/ Lyn Alden
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Feb 21, 2025 
Lyn Alden, a macro analyst and author of 'Broken Money,' dives into the concept of fiscal dominance and its significant effect on financial markets. She explains why the S&P 500 thrives despite high interest rates and discusses the outlook for big tech. Alden also reveals how the U.S. will manage large fiscal deficits and shares three major investment trends to watch. With insights on navigating investment strategies in this unique economic landscape, she emphasizes the importance of adaptability and diversification for investors.
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Fiscal Dominance Defined
- Fiscal dominance occurs when monetized fiscal deficits, rather than bank lending, drive money creation.
- This weakens central bank tools designed to control inflation.
Today's Market vs. History
- The current market mirrors the 1940s more than the 1970s due to large monetized fiscal deficits.
- High inflation hasn't hurt stocks as much because interest rates haven't risen enough to combat it.
Big Tech and Fiscal Dominance
- Fiscal dominance contributes to big tech growth by inflating financial assets.
- A global capital influx into US equity markets further fuels this growth.
