Dear Reader,
Happy Friday.
Today is Friday, January 23rd.
We've spent a lot of time recently talking about geopolitics — China, defense spending, Greenland, NATO — but over the past few days, something else has quietly moved to center stage.
The Supreme Court.
Specifically, a case that goes straight to the heart of whether the Federal Reserve remains independent… or whether that independence starts to crack.
This matters far more than most people realize.
The Fed was designed to be independent for a reason. Congress structured it that way deliberately, because history shows that politicians simply cannot be trusted to run monetary policy. Politicians think in election cycles. Economists think in decades. Those two mindsets do not mix well.
This week, oral arguments began at the Supreme Court, and as always, you can learn a lot by listening to the questions justices ask — not just the arguments themselves.
Justice Brett Kavanaugh, a Trump appointee, made what I thought was one of the most important points. He emphasized the long history — and the economic logic — behind shielding monetary policy from direct White House control.
In plain English, he warned that allowing broad, unchecked firing power over the Federal Reserve would weaken — if not shatter — its independence.
And here's the key part: once that tool exists, it doesn't belong to one president.
It passes to the next one.
Kavanaugh explicitly raised the risk that a future Democratic president could use the same power to remove Fed officials appointed by Trump. His message was simple, and it's one I've been repeating to you for months:
Think big picture.
What goes around, comes around.
Once these tools are unleashed, both sides will use them.
This isn't about liking or disliking Trump. You might agree with his policies. You might not. That's beside the point.
The real issue is protecting the institution itself.
Because if you want a reminder of why politicians should never control monetary policy, just look at what they've done with fiscal policy.
They can't even keep that house in order.
As we talked about yesterday, the U.S. has printed so much money that the dollar has quietly lost purchasing power year after year. That's why you're seeing record highs everywhere — stocks, gold, silver, copper, housing.
The measuring stick is shrinking.
Remember, not everything that goes up is a win.
In periods like this, rising prices often say more about the currency than the asset itself.
That's why we designed a systematic way to identify only the strongest stocks after they've proven themselves, rather than chasing every bubble out there.
In a world where money loses value and true value plays are getting harder and harder to find, it's easier to rely on the same strategy that's led me to 30+ years of successful investing.
And now, I'm sharing it with you here>>>
Listen, the consequences are stacking up fast.
Here's a number that should stop you in your tracks:
26% of all U.S. federal debt matures within the next 12 months.
That's one of the largest rollover walls we've faced this century.
And who's buying that debt?
Increasingly… the Fed itself.
This is the part people don't like to talk about. The Treasury issues the bonds. Demand isn't there at the levels needed. Global buyers hesitate. Domestic institutions hesitate.
So the Fed steps in.
The government is effectively buying its own debt.
And we're supposed to hand more control over monetary policy to the same political system that created this mess?
Let me put this in even clearer terms.
There's roughly $10 trillion in U.S. debt that needs to be refinanced soon. Much of that debt was issued when interest rates were near zero. It's now rolling over at rates closer to 3.75%.
That alone is going to wreak havoc on the federal budget.
This is exactly why the Fed is boxed in. And it's ironic — people yell that the Fed is too powerful, when in reality what they want is for the Fed to quietly absorb government debt and keep rates low so politicians don't have to deal with the consequences of their own spending.
But the Fed understands something politicians don't want to admit.
If it overtly plays that role, global investors will walk away from U.S. bonds. That might solve a short-term political problem — but it creates a much bigger long-term crisis.
And this brings us back to leadership.
A good leader sees a short-term problem and applies a short-term fix, even if it causes damage later.
A great leader solves the short-term problem without destroying the long-term foundation.
That's the tension we're watching play out right now — in real time — at the Supreme Court, at the Fed, and across global markets.
It's a fascinating moment. A dangerous one too.
And as investors, our job isn't to cheer or boo. It's to understand what's happening beneath the surface — before the consequences show up in prices.
That's all I have for today.
Have a wonderful weekend.
I'll see you Monday.
Tidak ada komentar:
Posting Komentar