John Mauldin

  • World War D—Deflation

    The flippant answer to all those questions is “Yes.” And that can be the correct answer as well, but it depends on what your time frame is and what tools you use to measure the markets and inflation. One of the newer members of the Mauldin Economics team is Jawad Mian, who writes a powerful global macro letter from his base in Dubai. He has been making the case for the “end of the deflation trade” (or more properly the return of a reflationary period) and the knock-on effects that would cause. Longtime readers know that I am in the secular deflation camp and ask me why there’s such a seeming difference my views and Jawad’s.

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    Posted to Thoughts From The Frontline by John Mauldin on 05-29-2015
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  • The Third and Final Transformation of Monetary Policy

    The law of unintended consequences is becoming ever more prominent in the economic sphere, as the world becomes exponentially more complex with every passing year. Just as a network grows in complexity and value as the number of connections in that network grows, the global economy becomes more complex, interesting, and hard to manage as the number of individuals, businesses, governmental bodies, and other institutions swells, all of them interconnected by contracts and security instruments, as well as by financial and information flows.

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    Posted to Thoughts From The Frontline by John Mauldin on 04-29-2015
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  • Hoisington Quarterly Review and Outlook: First Quarter 2015

    I think it was almost two years ago that I was in Cyprus. Cyprus had just come through its crisis and was still in shell shock. I was there to get a feel for what it was like, and a number of my readers had courteously arranged for me to meet with all sorts of people and do a few presentations. A local group arranged for me to speak at the lecture hall of the Central Bank of Cyprus in Nicosia.

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    Posted to John Mauldin's Outside the Box by John Mauldin on 04-29-2015
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  • Living in a Free-Lunch World

    The world has been on a debt binge, increasing total global debt more in the last seven years following the financial crisis than in the remarkable global boom of the previous seven years (2000-2007)! This explosion of debt has occurred in all 22 “advanced” economies, often increasing the debt level by more than 50% of GDP. Consumer debt has increased in all but four countries: the US, the UK, Spain, and Ireland (what these four have in common: housing bubbles). Alarmingly, China’s debt has quadrupled since 2007. The recent report from the McKinsey Institute, cited above, says that six countries have reached levels of unsustainable debt that will require nonconventional methods to reduce it (methods otherwise known as defaulting, monetization; whatever you want to call those measures, they amount to real pain for the debtors, who are in many cases those least able to bear that pain).

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    Posted to Thoughts From The Frontline by John Mauldin on 03-30-2015
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  • US Dollar: American Phoenix

    Lastweek the FOMC essentially removed forward guidance and placed all options back on the table, and at the end of the day they’ve opened the door for further tightening. As Yellen recently explained in advance, the removal of the word patience from the Fed’s guidance amounts to fair warning to the rest of the world’s central banks: an interest rate hike is on the horizon. Govern your actions accordingly. (My personal guess, for those interested, is September, with the Fed proceeding exceedingly slowly and cautiously thereafter.)

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    Posted to John Mauldin's Outside the Box by John Mauldin on 03-26-2015
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  • Never Smile at a Crocodile

    As I sit here on Friday morning, beginning this week’s letter, nonfarm payrolls have just come in at a blockbuster 295,000 new jobs, and unemployment is said to be down to 5.5%. GDP is bumping along in the 2%-plus range, right in the middle of my predicted Muddle Through Economy for the decade. US stocks are hitting all-time nominal highs; the dollar is soaring (especially after the jobs announcement); and of course, in response, the Dow Jones is down 100 points as I write because all that good news increases the pressure for a June rate hike. Art Cashin pointed out that, with this data, if the FOMC does not remove the word patient from its March statement, they will begin to lose credibility. The potential for a rate increase in June is back on the table, but unless we get another few payrolls like this one, the rather dovish FOMC is still likely to wait until at least September. Who knows where rates will be end of the day, though? Anyway, what’s to worry?

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    Posted to Thoughts From The Frontline by John Mauldin on 03-11-2015
  • The Kingdom of Denmark

    In Thoughts from the Frontline, I am in the middle of writing a series on debt. I realized on Sunday that the second installment wasn’t ready for prime time, so I will work on it some more and send it out (hopefully) this coming weekend. In the meantime, in keeping with the theme of debt, for today’s Outside the Box we have the following issue of The Credit Strategist from the ever-insightful Michael Lewitt. Michael starts out musing on debt and then shares a number of useful thoughts on a variety of market topics, with his usual panache.

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    Posted to John Mauldin's Outside the Box by John Mauldin on 03-05-2015
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  • Shovelin’ Schmitt Against the Tide

    There is an obsession in the marketplace over the date when the Fed will once again begin to raise rates. As if another 25 basis points is going to change the economics on tens of trillions of dollars of investments. But as we reflect on the issue more deeply, it becomes obvious that a minor bump in the fed funds rate will indeed change a great deal of economics all over the world.

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    Posted to John Mauldin's Outside the Box by John Mauldin on 03-03-2015
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  • Debt Be Not Proud

    Kicking the debt relief can down the road is going to require a great deal of dexterity. The Greeks haven’t helped their cause with their abysmal record of avoiding taxes and their rampant, all-too-easily-observed government corruption, including significant public overemployment.

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    Posted to Thoughts From The Frontline by John Mauldin on 02-25-2015
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  • What Uber Could Teach the American Economy

    The twentieth century was a good time for middle America. A lot of the new manufacturing jobs paid reasonable middle-class wages. Like me, many of you grew up in those middle-class homes (though mine was decidedly on the lower end of the scale). It was a good life and a great time to grow up.

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    Posted to John Mauldin's Outside the Box by John Mauldin on 02-23-2015
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  • The Eurozone: Collateral Damage

    Now we’re watching another Greek drama that could have significant unintended consequences – far beyond anything the market has priced in today. Then again, maybe not. Maybe the market is right this time. When we enter unknown territory, who knows what we will find? Fertile valleys and treasure, or deserts and devastation? Today we look at the situation in Europe and ponder what we don’t know. Greece provides a wonderful learning opportunity.

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    Posted to Thoughts From The Frontline by John Mauldin on 02-09-2015
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  • 2015 Investment Themes

    Gary’s reason #9 for buying Treasurys is that “The odds of a near-term Fed rate hike are receding. He sees any Fed rate increase being pushed out “as the deflationary effects of the oil price plunge sink in and investors – and the Fed – realize that foreign central bank stimuli amount to Fed tightening [in relative terms].”

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    Posted to John Mauldin's Outside the Box by John Mauldin on 02-02-2015
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  • The Cult of Central Banking

    In today’s Outside the Box, good friend Ben Hunt informs us that we have entered the cult phase of the Golden Age of the Central Banker

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    Posted to John Mauldin's Outside the Box by John Mauldin on 01-23-2015
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  • The Swiss Release the Kraken!

    If you want evidence that central bankers play by their own rules, regardless of what they say or what conventional wisdom tells us, last week’s action by the Swiss National Bank should pretty much fill the bill. My friend Anatole Kaletsky, in a CNBC interview not long after the announcement, quipped (with a completely straight face) that just as James Bond has a license to kill, central bankers have a license to lie.

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    Posted to Thoughts From The Frontline by John Mauldin on 01-20-2015
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  • A War Between Two Worlds

    The terrorist attacks in Paris have fixated the world’s attention on the contrast between competing worldviews and what constitutes acceptable behavior in modern society. What are the principles by which society should be organized and run? Who gets to set those rules, and to what standards should others who do not believe in them be held?

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    Posted to John Mauldin's Outside the Box by John Mauldin on 01-16-2015
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