ReSolve Riffs with Cullen Roche on Decoding MMT: The Good, the Bad and the Ugly
Our guest this week was Cullen Roche, CIO of Disciplined Funds, founder of Orcam Financial Group and author of Pragmatic Capitalism: What Every Investor Needs to Know About Money and Finance. We discussed topics that included:
- Disciplined Funds’ macro-oriented investment approach
- Cullen’s rude awakening – classic economics learned in university is largely at odds with real world economics
- Taking a step back and learning public finances from first principles
- Digging into the mechanics of quantitative easing, fiscal policy and other major interventions
- “If you’re not confused, you don’t understand what’s going on”
- The Kalecki Equation and wealth concentration
- Fiscal Stimulus – how much is too much
- An introduction to Modern Monetary Theory
- The role played by a “currency monopoly”
- From an MMT perspective, unemployment is a failure of government
- Why the median voter is so disappointed with the current system that they will likely swing to one of the extremes – the question is which one?
- The need for productivity improvement to keep up with fiscal outlays
- The Real Estate Conundrum – a depreciating block of wood on an ever-scarcer plot of land
- What percentage of homeowners can withstand rising interest rates?
- The demographic question, Japanification and home prices
- Thinking of portfolio construction in the current environment – core and satellites
- Cullen’s 90/10 Rule – helping investors stick with their structured portfolio allocations by “allowing” them to speculate on a small portion of their assets
This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management.