Financial Repression Authority with Dr. Lacy H. Hunt, Ph.D.

By: Gordon Long | Tue, Feb 17, 2015
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Lacy H. Hunt, Ph.D.

SPECIAL GUEST : Lacy H. Hunt, Ph.D. is an internationally known economist, is Executive Vice President of Hoisington Investment Management Company, a firm that manages over $5 billion for pension funds, endowments, insurance companies and others.

Lacy Hunt is the author of two books, and numerous articles in leading magazines, periodicals and scholarly journals. Included among the publishers of his articles are. Barron's, The Wall Street Journal, The New York Times, The Christian Science Monitor, the Journal of Finance, the Financial Analysts Journal of Portfolio Management.

Previously, he was Chief U.S. Economist for the HSBC Group, one of the world's largest banks, Executive Vice President and Chief Economist at Fidelity Bank and Vice President for Monetary Economics at Chase Econometrics Associates, Inc. A native of Texas, Dr. Hunt has served as Senior Economist for the Federal Reserve Bank of Dallas.

Lacy Hunt and his partner Van Hoisington were called "The Henry Fords of bond investing" by Forbes Magazine. You can understand why when you listen to Dr Lacy Hunt describe the current global macro environment.


Financial Repression

"A superficial attempt to deal with the excessive indebtedness that grips the global economy .. and in my opinion will not work!"

"Monetary Policy is not the solution here. There are Fiscal Policy solutions but they require shared sacrifice, strong leadership (something we don't have in the US or Europe - no one has) ... basically what w are trying to do is to solve an extremely over-indebted situation domestically and globally by taking on more debt and aggravating the problem "


Deflation

"The current economic maladies and continuing downshift of economic activity has been the over-accumulation of debt. In many cases "Debt funded the purchase of consumable and non-productive assets, which failed to create a future stream of revenue to repay the debt." "The increase since 2008 has been primarily in emerging economies. Since Debt is the acceleration of current spending in lieu of future spending."


Currency Manipulation

  1. Impairs global activity,
  2. Spurs dis-inflationary or deflationary trends and
  3. Engenders instability in world financial markets.


The Currency Wars Of The 1920s & 1930s

Lacy muses on the effects of debt and takes us back to the '20s and '30s, when there were similar problems with debt in countries that had engaged in currency wars for over a decade.

Clearly the policies of yesteryear and the present are forms of "beggar-my-neighbor" policies, which the MIT Dictionary of Modern Economics explains as follows: "Economic measures taken by one country to improve its domestic economic conditions ... have adverse effects on other economies. A country may increase domestic employment by increasing exports or reducing imports by ... devaluing its currency or applying tariffs, quotas, or export subsidies. The benefit which it attains is at the expense of some other country which experiences lower exports or increased imports.... Such a country may then be forced to retaliate by a similar type of measure."

The existence of over-indebtedness, and its resulting restraint on growth and inflation, has forced governments today, as in the past, to attempt to escape these poor economic conditions by spurring their exports or taking market share from other economies. As shown above, it is a fruitless exercise with harmful side effects.

It behooves us to pay attention to Lacy since he has been one of the most accurate forecasters of interest rates for the last 20 to 30 years.

2015 -Parallels to that earlier period.


Interest Rates

"The downward pressure on global economic growth rates will remain in place in 2015. Therefore record low inflation and interest rates will continue to be made around the world in the new year, as governments utilize policies to spur growth at the expense of other regions."

"new lows in yields in 2015 in the intermediate- and long-term maturities of U.S. Treasury securities"


40 Minutes

 


 

Gordon Long

Author: Gordon Long

Gordon T. Long
Publisher - LONGWave

Gordon T. Long

Gordon T. Long has been publically offering his financial and economic writing since 2010, following a career internationally in technology, senior management & investment finance. He brings a unique perspective to macroeconomic analysis because of his broad background, which is not typically found or available to the public.

Mr. Long was a senior group executive with IBM and Motorola for over 20 years. Earlier in his career he was involved in Sales, Marketing & Service of computing and network communications solutions across an extensive array of industries. He subsequently held senior positions, which included: VP & General Manager, Four Phase (Canada); Vice President Operations, Motorola (MISL - Canada); Vice President Engineering & Officer, Motorola (Codex - USA).

After a career with Fortune 500 corporations, he became a senior officer of Cambex, a highly successful high tech start-up and public company (Nasdaq: CBEX), where he spearheaded global expansion as Executive VP & General Manager.

In 1995, he founded the LCM Groupe in Paris, France to specialize in the rapidly emerging Internet Venture Capital and Private Equity industry. A focus in the technology research field of Chaos Theory and Mandelbrot Generators lead in the early 2000's to the development of advanced Technical Analysis and Market Analytics platforms. The LCM Groupe is a recognized source for the most advanced technical analysis techniques employed in market trading pattern recognition.

Mr. Long presently resides in Boston, Massachusetts, continuing the expansion of the LCM Groupe's International Private Equity opportunities in addition to their core financial market trading platforms expertise. GordonTLong.com is a wholly owned operating unit of the LCM Groupe.

Gordon T. Long is a graduate Engineer, University of Waterloo (Canada) in Thermodynamics-Fluid Mechanics (Aerodynamics). On graduation from an intensive 5 year specialized Co-operative Engineering program he pursued graduate business studies at the prestigious Ivy Business School, University of Western Ontario (Canada) on a Northern & Central Gas Corporation Scholarship. He was subsequently selected to attend advanced one year training with the IBM Corporation in New York prior to starting his career with IBM.

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