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Michael Howell of Crossborder Capital and George Robertson of The Monetary Fronteir have two things in common: they both correctly predicted the renewed bull market in stocks and they both have been guests on The Forward Guidance podcast. That is where the similarities end, as Michael and George have entirely different explanations for what is driving the surge in equity prices. While Michael is renowned for his models on Global Liquidity and closely tracks the changes in central bank balance sheets (most notably the Fed’s), George dismisses the Fed entirely and thinks that monetary authorities have effectively zero influence on the economy and stock market. What ensues is a heated debate not just about what is driving the stock market and economy but about the very nature of money and credit creation itself. Recorded on April 10, 2024.
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George’s Substack https://themonetaryfrontier.substack.com/
Michael’s Book https://www.amazon.com/Capital-Wars-Rise-Global-Liquidity/dp/3030392872
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Timestamps:
(00:00) Introduction
(00:32) Jack's Intro
(02:28) Michael's Opening Statement
(06:09) George's Opening Statement
(18:17) The Draining of The Fed's Reverse Repo (RRP) Facility
(24:59) VanEck Ad
(26:03)
(28:38) The Portfolio Rebalancing Theory (I.E. How Quantitative Easing (QE) Theoretically Works)
(45:21) Duration Impact of U.S. Treasury Issuing Longer-Maturity Paper
(51:39) Spread Between Agency Mortgage-Backed Securities (MBS) Yield And 10-Year Treasury Yield
(01:12:09) There's A Distortion In The Yield Curve, That's For Sure"
(01:17:47) Beyond The Fed's Balance Sheet
(01:23:18) Jack's Comment On Cause And Effect
(01:25:07) Views On Markets: George And Michael Remain Very Bullish
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.
