A Natural Way of Seeing Things
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 12 August 2022
⏱️ 13 minutes
🧾️ Download transcript
Summary
I kind of like this week's Dividend Cafe. We are going to do a very quick look into how the Fed fuels Japanification, but more specifically, how low-interest rates hurt growth. It is one thing (and a more severe one at that) that monetary policymakers generally view artificially low rates as a really good thing to fuel economic growth, but at this stage in my life and career, there is little I can do about that. It is another thing altogether that so many investors think is a great thing. Today I want to do a quick lesson on why it is not just wrong but a dangerous fallacy, that is, wait for it, undermining economic growth.
Speaking of growth, many want to know when the Emerging Markets will deliver it. I think you will benefit from that lesson today as well. Unfortunately, the EM gain is likely to be Europe's pain, so get ready for a case of hot-cold.
And finally, I want to add to last week's talk about "gross domestic product" in how we think about economic growth. You may find it illuminating.
Jump on into the Dividend Cafe.
Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the Dividing Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. |
| 0:12.8 | Well, hello and welcome to another Dividendin Cafe. I'm actually back in the exact same spot I was a week ago Friday, but I've barely been here all week. |
| 0:23.5 | Spent a lot of the last week, well, a couple days out in the Hamptons, and then went to Portland, |
| 0:29.4 | Maine with my wife. |
| 0:30.2 | We picked up our son, a lot of back and forth. |
| 0:33.0 | I'm now in the city. |
| 0:34.0 | I'm now in the city. |
| 0:35.7 | I'm going to record this podcast and video quickly, |
| 0:39.5 | and then head off for a day of work and then head back to California on Sunday. |
| 0:45.1 | I am kind of excited, though, about today's Dividend & Cafe. |
| 0:49.9 | I want to talk to you about something that I don't talk about a lot. |
| 1:01.4 | Now, in an indirect way, I do, this subject about Japanification and about downward pressure on growth is probably the thing I talk about the most. |
| 1:04.7 | If it isn't, it should be. |
| 1:06.8 | It's a massive topic, and those of you who listen to Divida Cafe frequently know it is one. |
| 1:12.7 | I talk about a lot, but my primary focus on it is, understandably so. |
| 1:18.7 | The role that excessive indebtedness has played in creating it. |
| 1:24.2 | And though this topic today is very much related to that and intersects with it and |
| 1:31.7 | unfortunately feeds off of it, I want to focus today on particularly the monetary side of |
| 1:40.4 | downward pressure on growth. I've addressed in the past how financial repression is created by |
| 1:46.4 | the Fed, low interest rates, and particularly the quantitative easing we've had since the great |
| 1:52.1 | financial crisis, the effects that those things have had. But in general, the low interest rate |
| 2:00.0 | phenomenon is completely misunderstood in its impact on growth. |
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