The Ghosts of Versailles

Exactly 100 years after the start of the Paris peace process that formalized the end of World War I, the world is at a historical crossroads again. As in 1919, the temptation to pursue more democracy and deeper international cooperation must be managed carefully, lest tragic unintended consequences follow.

Harold James

paris peace conference

PRINCETON – It has now been just over 100 years since the opening of the Paris Peace Conference, which produced the Treaties of Versailles, Saint-Germain-en-Laye, Neuilly-sur-Seine, Trianon, and Sèvres, bringing an end to World War I. To this day, resentment over the Treaty of Trianon fuels Hungarian nationalism and revisionism, particularly under the current government of Prime Minister Viktor Orbán.

Indeed, the Paris peace process is generally remembered as an example of how well-meaning international cooperation and democracy-promotion can go wrong. Now that we are living through a moment when multilateralism and democracy are again under strain, it is worth asking why efforts to promote the two so often fail.

In 1919, US President Woodrow Wilson’s attempt to forge a lasting peace by destroying the world’s autocracies proved overly high-minded, even as it inaugurated the interventionist consensus that has dominated US foreign-policy thinking ever since. Though US President Donald Trump claims to have abandoned that tradition, he has nonetheless ordered strikes against government military sites in Syria and recognized Venezuela’s opposition leader as the country’s legitimate president.

The Paris process failed because it set expectations too high. The victory of democratic powers did not mean that democratic wishes would be fulfilled, particularly when those wishes would require the losers to pay. Throughout WWI, every side simply assumed that an eventual peace settlement should saddle the vanquished with the material – and even the emotional – costs of the war, all but ensuring an unsatisfactory resolution to the conflict.

Likewise, in 2019, the problems resulting from rapid technological change and globalization might not admit of any widely acceptable solutions. As a result, different countries will produce their own narratives about being cheated by globalization. And, as in 1919, they will invent “villains” to bear the blame. For example, the Trump administration routinely complains about China’s unfair trade practices, Germany’s excessive current-account surplus, aid to developing countries, and so forth. Needless to say, compiling a litany of grievances hardly amounts to a solution.

A second explanation for the failure of the Paris process is that some of those involved – French Prime Minister Georges Clemenceau, British Prime Minister David Lloyd George, and Wilson – were uniquely incompetent or otherwise ill-disposed. Clemenceau was a lifelong nationalist, monomaniacally dedicated to the pursuit of French interests, whereas Lloyd George was the opposite, and thus too pliable and unprincipled for the task at hand. He was prone to attacking others personally, only to forget that he had done so when encountering those people again.

For his part, Wilson’s lofty aspirations far exceeded his acumen for political deal-making, both domestically and internationally. And his mounting health problems certainly didn’t help. Owing to his stratospherically high blood pressure, which went largely untreated, Wilson suffered a major stroke shortly after the Paris proceedings. One obvious lesson from this episode in history is that it is important to monitor the physical and mental health of world leaders, particularly the president of the United States, during periods of consequential decision-making.

When it comes to leaders’ character flaws, 2019 offers just as much fodder as 1919 did. Trump and British Prime Minister Theresa May could not be more different in terms of their personalities, yet both have dispensed with expert advice and done serious damage to their respective countries’ political systems. While French President Emmanuel Macron is often criticized for relative inexperience, German Chancellor Angela Merkel is seen as too experienced at preserving an outdated status quo.

The third reason the Paris process failed is perhaps the most important. The conference’s overly ambitious goals, and the flawed personalities of those pursuing them, were so obvious as to invite a lethal public rebuke. That rebuke came from the British economist John Maynard Keynes, one of the most brilliant minds of the age, in his 1919 book, The Economic Consequences of the Peace.

Keynes’s critique of the Paris process and its participants was devastating, and he knew it. In October and November of 1919, he attended meetings, hosted by the Dutch banker Gerard Vissering, where bankers from the US and various neutral powers developed a sophisticated plan for leveraging private US finance for the reconstruction of Europe. The plan showed great promise, but Keynes could not associate himself with it, because his brilliant polemic had alienated the political leaders who were needed to carry it out. In the end, only a few elements of the plan were adopted, and not until 1924, when it was already too late.

The lesson is that an overwritten critique can be counterproductive. Setting political leaders on the right course of action requires persuasion, not polemics. Hence, when it came time to remake the world in 1944-45, Keynes adopted a very different approach. He elaborated a complex reconstruction plan, but this time he operated behind the scenes. It would not have been difficult to attack British Prime Minister Winston Churchill and US President Franklin D. Roosevelt for their past economic policies, but nor would it have accomplished anything.

True, Churchill and Roosevelt were far better leaders than Lloyd George and Wilson. But even if they had been just as flawed, Keynes had learned the costs of focusing too much on the foibles of bad leaders during bad times. Whether it is 1919 or 2019, obsessing over individual leaders can distract us from working toward the solutions that today’s most pressing problems demand.

Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation. A specialist on German economic history and on globalization, he is a co-author of the new book The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, and Making the European Monetary Union.

Stock Market Recovery Is A Dead Cat Bounce

by: Katchum

- The stock market has recovered markedly in the beginning of 2019.

- Leading indicators suggest the market is wrong.

- Stock buybacks are causing a dead cat bounce.

A few months have passed since the stock market correction in December 2018. Today, the markets have recovered, and it seems nobody is worried anymore (see S&P chart below from Yahoo Finance). However, the numbers are not looking good, so caution is advised if you decide to jump into the stock market.
First of all, the leading economic indicator has hit a new low for the year (See FRED chart below).
We haven't seen such a bad number since 2010. So I expect that the coincident "soft" indicator will follow soon. Let's go over the deteriorating "hard" indicator numbers.
The latest GDP numbers were abysmal. The Atlanta Fed slashed its GDP forecasts for Q4 in half to 1.5%. So we are really approaching a recessionary period here.
Inflation-adjusted retail sales are now negative year over year (see FRED chart below). Retailers like J.C. Penney (NYSE:JCP), Macy's (NYSE:M) and Nordstrom (NYSE:JWN) have been underperforming.
U.S. industrial production has now reverted back into a downtrend (see FRED chart below).
The U.S. trade deficit improved in November 2018, but it is still pointing down (see FRED chart below).
Producer prices are crashing down, which suggests that consumer prices will follow the same path (see FRED chart below).
t is probably too early to tell, but initial jobless claims are now starting to move higher, because real GDP growth is weak (See FRED chart below).
The conclusion is that there are multiple signs that the economy is cooling down: GDP growth is weak, inflation is low, and jobless claims moving higher. All the ingredients for a recession are present. With this in mind, I also suspect that the Federal Reserve will end QE this year.
You might wonder why the stock market is up for the year then? The answer lies in stock buybacks.

All the money that was being repatriated back into the U.S. and all the money from tax cuts have been flowing into stock buybacks since the start of 2018, and this will continue until the end of 2019. We are now halfway. If you're smart, you'll take this opportunity to reduce your risk.

The Instability of Britain

Brexit is less important than the increasing fragility of Britain and the British Isles.

By George Friedman


The Brexit referendum bisected Britain. The vote was designed to demonstrate that Britain did not want to leave the European Union. In fact, had Britain’s political and business elite doubted that the referendum would result in a “remain” verdict, it’s unlikely the vote would ever have been called. But 52 percent of voters wanted to leave the EU; 48 percent wanted to stay. If 2 percent of voters had switched positions, the referendum could just as easily have gone the other way.

Britain was deeply divided, and the elites were oblivious to that division. The critical question was: Did they have any interest in the reality facing most Britons?

Well-credentialed, well-spoken opponents of Brexit were certain that those who voted to leave the EU were uneducated and incapable of understanding the consequences of their vote. Brexit opponents attempted to delegitimize the referendum’s outcome by effectively delegitimizing the democratic process: They argued that just over half of the British public was not qualified to have an opinion – effectively saying that 52 percent of Britain’s voters should have left such serious matters to their betters.

The divide that has emerged in the post-Brexit world threatens to reopen centuries-old uncertainties within the British Isles. The European Union itself was not the source of this divide, but its policies helped drive a deeper wedge.
The Disparity of Free Trade
Free trade is the main problem underpinning Brexit. EU supporters in the United Kingdom prospered under British membership in the bloc. But free trade did not benefit all Britons, and in denigrating Brexit voters, the EU stalwarts failed to acknowledge this. Brexit’s core supporters were in the industrial areas of the United Kingdom, where people had lost jobs as British companies moved their factories to other countries or as Britain could no longer compete in certain industries.

Free trade posed two vital questions in Britain. First, how long does it take to see the benefits of free trade? In the long run, it might have advantages for all nations. But if you’re 50 years old and have lost your job, you may not live long enough to reap the rewards. As John Maynard Keynes put it, “In the long run we are all dead.”

Second, who reaps the benefits of free trade? Although a country’s gross domestic product may rise, the benefits are not evenly distributed. Significant segments of society don’t share in the prosperity and may even suffer deeply while others profit. This appears to have been the reality behind the Brexit vote: Many gained from free trade, and many lost ground.

The latter lost not only economic ground. They also lost the political ability to change the course of events. EU membership created a rigidity in the political system; many rules imposed from Brussels could not be turned down by  Westminster. Hence, Britain lost a great deal of sovereignty. For those prospering under the EU, this was a small price to pay. For those who saw no benefit, the loss of political power rendered them helpless.
Britain’s Divide
This story has been told and told again. The contempt of upper classes for the lower classes was epidemic in Britain until around World War I; thereafter it gave way to a recognition of common citizenship. But the current telling of the story leads to a more important reality. However Brexit shakes out, Britain will remain divided and politically unstable. The bitterness of “remain” voters is striking. To them, this was not merely a policy debate but a question of who ruled Britain. If the withdrawal from the EU hurts their interests, their anger will become a fixed characteristic of the upper classes.

If, on the other hand, Parliament votes to annul the Brexit vote or calls another referendum, a different but substantial part of the British population will become embittered. Either move would signal that the purpose of the first referendum was to affirm the elites’ position on the EU, and that they will keep trying until they win. Pro-EU advocates are certain they would win a second referendum, but nothing can be certain when it comes to matters of public opinion.

Brexit, therefore, is institutionalizing a vast social divide, resurrecting the elites’ contempt for the poor and the poor’s hatred of the rich. Even if another referendum saw one side win by a 70 percent to 30 percent margin, nearly a third of the population would still be profoundly opposed to the outcome. That’s a large slice of the population to leave steeped in anger and alienation.

The British political system is in chaos. The Conservatives historically spoke for one segment of society, Labour for another. It’s no longer clear who is speaking for whom or whether their voices even matter.
Beyond Brexit
Brexit, therefore, has redefined Britain’s internal dynamic at a time when the question of the British Isles is reopening. In Scotland, an extraordinary 45 percent of the population voted to leave the United Kingdom in the 2014 independence referendum. That issue, like Brexit, is not closed. More important, the ever-dangerous Irish question has resurfaced. That question had been settled for a century, but Brexit has posed threats to a tenuous peace. Although the border region has not resorted to violence (save for a couple concerning incidents), historically the relationship between Northern Ireland and the Republic of Ireland, and both their relationships to Britain, has been explosive.

So, as Britain passes through its most intense social crisis in generations, the cohesion of the British Isles is once again in question. It is not inconceivable that the Union Jack could become obsolete, and that Britain’s geography could contract to a size not seen for centuries. And if that happens, the dynamics of the Continent will change.

These are extreme and unlikely evolutions, but five years ago the kind of class contempt and hatred that has emerged in post-Brexit Britain would have been unthinkable. Perhaps the most important point is that the EU issue was the trigger. As the reality of a swelling class divide emerged in Britain, the EU made managing the situation much more difficult.

This situation is not unique to Britain. Class tension and political incoherence have become commonplace on the Continent and in the United States, as well as in Russia, where only 33 percent of people say they trust their president. In some ways, I am reminded of the interwar period of the 1920s and 1930s, when class tensions were profound. But even then, political parties in most countries were stable and predictable. The extension of the uncertainty to the political party system makes Britain’s current situation all the more unsettling.

What Blows Up First? Part 6: “Almost Junk” Bonds

by John Rubino

The key insight of the Austrian School of Economics (maybe the key insight of ALL economics) is that the amount you borrow matters, but so does the use to which you put the money.

A case in point is US corporate debt, which has changed structurally lately in very scary ways.

The short version of the story is that after the US cut interest rates to historically low levels to keep the Great Recession from swapping it’s capital R for a capital D, public companies figured out that they could borrow money for less than their stocks’ dividend yield, use the proceeds to buy back their outstanding shares, and generate free cash flow in the process. And – a nice added perk – the increased demand pushed their share price up and landed their CEOs even bigger year-end bonuses.

So that’s what they did, on an epic scale.

corporate share buybacks almost junk bonds

But – recall the Austrian School insight – the result was soaring debt without any new productive assets to offset the cost.

Generally speaking, debt rising faster than operating income equals diminished creditworthiness. So all that borrowing has produced several trillion dollars of debt that’s just one step above junk. Here’s an excerpt from money manager Louis Gave’s take on the subject.
The Size of Corporate Debt One Rung Above Junk Has Never Been Greater, Warns Louis Gave 
Louis Gave at Gavekal Research says the greatest source of potential instability in the years ahead lies with the massive growth of the U.S. corporate debt market, particularly at the BBB-rated (near junk) level. 
Gave recently told FS Insider that it has far outpaced the economy and could be due for a reset during the next downturn, which is increasingly becoming a concern by other strategists. 
When it comes to potential trouble spots brewing in the financial markets or global economy, Gave said “if you ask a French client, they tend to point a finger at Italy. If you ask Italian clients, they point a finger at Deutsche Bank; and if you ask German clients, they point a finger at France. When I talk to my U.S. clients, most of them point a finger at China, which they see as having unsustainable high levels of debt and is an accident waiting to happen.” 

However, Gave sees an even source of potential problems since, as he points out, the “size of corporate debt one rung above junk has never been greater” (see below). 
almost junk bonds
The challenge today, Gave said, “is that part of the massive growth we’ve seen in the U.S. corporate bond market has really taken place in the BBB space. And so, if you start seeing an economic downturn (and the usual type of downgrades that occur in a downturn), then all of a sudden you have investment grade that becomes non-investment grade.” 
Gave worries this could send shock waves through the financial markets since U.S. corporate debt is widely held by pension funds, investment banks, and large institutions all around the globe. 
“There are real questions about all the energy debt that’s being issued by a lot of negative cash flow companies in the energy space,” he said, which also leads to questions about industrial, auto and real estate debt. 
Gave asked listeners whether all this growth in debt has “funded the purchase of assets that allow the servicing of the debt and then the reimbursement of the debt or has this growth really funded a massive rise in share buybacks and financial engineering?” Gave said if the answer is the latter it would signify that our balance sheets are far more stretched out than they have been in previous cycles.

To sum up, hundreds of US companies are about to find their bond ratings cut to junk. They’ll then have to pay way up to refinance their debts (or in some cases to make payroll), setting off a death spiral that, if the history of past debt binges is any indication, will end with mass bankruptcies.

And as Gave notes, a ton of these bonds reside in the very same pension funds that are already due to implode in the next recession.

Modern Monetary Madness

By John Mauldin


More than 10 years ago some Australian readers begin regaling me with the ideas of economist Bill Mitchell of the University of Newcastle in New South Wales. He was teaching about something he called (and he coined the term) Modern Monetary Theory. I looked into it and fairly quickly dismissed it as silly. Actually printing money as an economic policy? Get serious.

MMT is a revival of an early 1900s idea called chartalism. Now it is influencing the thinking of new socialist-like movements in the US and other places and cited by politicians. MMT is increasingly appearing in mainstream media like this sobering Financial Times article. Since it is increasingly discussed in more public venues, you should know more about it and that will be today’s topic.

Join me in Dallas. Now, on with our letter.

Modern Monetary Madness

Essentially, MMT espouses that the public through the government owns the process of money creation, and that in addition to borrowing and taxing, should simply issue currency as payment for its obligations. This is not the sleight-of-hand that quantitative easing was. This is direct monetization in lieu of borrowing.

If that sounds like printing money, that’s because it is. Upfront and in-your-face as a serious economic proposal. Most of the time when I am talking with my fellow writers and economists, when somebody mentions MMT, everybody smiles, maybe chuckles, and shakes their heads. The problem is, what seems like a joke is actually getting traction.

Let’s get the official definition of MMT from Wikipedia. My comments inserted are in brackets.

 In MMT, "vertical" money (money created by the government and spent in the private sector) enters circulation through government spending. Taxation and its legal tender enable power to discharge debt and establish the fiat money as currency, giving it value by creating demand for it in the form of a private tax obligation that must be met. [And thus higher taxes create more demand for the currency and help to maintain the value thereof.]

In addition, fines, fees and licenses create demand for the currency. An ongoing tax obligation, in concert with private confidence and acceptance of the currency, maintains its value. Because the government can issue its own currency at will, MMT maintains that the level of taxation relative to government spending (the government's deficit spending or budget surplus) is in reality a policy tool that regulates inflation and unemployment, and not a means of funding the government's activities by itself. [The more you want the government to spend, the higher the taxes have to be in order to keep from creating inflation, or so the theory goes.]

Proponents argue that unemployment is caused by lack of demand and lack of demand is caused by insufficient money entering the private sector, a problem the government can solve by creating money and spending it in the private sector. Voilà, demand is created and unemployment goes down. Inflation? That can be controlled by higher taxes. Hey, it’s their theory. Don’t ask me to explain it.

Economists advising major presidential and congressional candidates on the progressive and even “moderate” left are more and more openly talking about MMT and its practical applications.

Pet Economists

I have said before that economists are the modern-day equivalent of shamans and priests. Rather than looking at sheep entrails, economists look at “data” and tell the politician (king, emperor, or chief…) what they want to hear. I have been in more than one meeting where a politician is clearly shopping for a rationale for something that they would like to propose and do. Any serious politician is going to have more than a few economic advisors attached in one form or another to their campaign.

Let me quickly state that I am not disparaging the role of economists when they act as political advisors. I have done that myself. It is actually one of the rationales for the discipline. Indeed, it would be strange if that were not the case.

90% of readers may wonder why we are even talking about this in a serious letter. The rest of you may tell me how I’m wrong and it really will work. Let me hasten to say that 10 years ago it was much less than 1%. And it is beginning to come from readers that I recognize to be fairly serious.

There are multiple and growing motivations and rationales for adopting MMT into your own philosophical base.

Why should this be on your radar? Let me give you just a few scenarios…

Politicians are increasingly talking about “free stuff.” Free college, guaranteed basic income, more total healthcare paid for by the public, basic housing, and more. It is almost like there will be an auction to see who can promise the most free benefits, paid for by taxes on the rich. They will cite economic advisors who say it is completely doable and even necessary for the general welfare.

“The richest country in the history of rich countries can easily afford to spend more on its citizens ensuring basic income and wealth equality.” More or less a direct quote from several interviews. Forget mere income taxes. The new political ante will be a wealth tax.

That means these ideas will be increasingly promoted in the public space. More politicians will argue for increased spending and/or at least different spending priorities. Guns and butter.

Over the next few years this will enter the national mindset. An increasingly large group of voters, especially younger voters, will feel a natural affinity with the idealism. Why shouldn’t a rich nation help those who are less advantaged?

Then somewhere, while we are having this conversation, there will be a recession. Unemployment will rise and deficits increase until we are on our way to a $30-trillion debt in just a few years. This will crowd out private investment, slowing whatever recovery there might be and making us vulnerable to a quick second recession, not unlike the recessions of 1980 and 1982.

But it will also produce the potential for a true “change” election. The frustration noted among Trump voters will still be there, but it will also be shared by many on the left who will see the promises as a way to change things. It is hard to argue in the middle of financial crisis and recession that we don’t need change.

There won’t be a President Warren Harding who essentially decided to do nothing in one of the deepest recessions/depressions in American history in the early 1920s. In that case, severe austerity allowed markets to clear but the recovery gave us the Roaring 1920s. Cause and effect? Numerous scholarly books have been written to suggest that.

But that will not be the case 100 years later as we face the 2020s. There will be an increasing drumbeat for “doing something.” Change will be the mantra.

It is not far-fetched to imagine a White House and Congress beginning to work around the principles of MMT, if not adopt it outright with sharply higher taxes and spending.

Now here’s where it gets a little bit murkier. The Federal Reserve, even if a new president could pack the board with members philosophically attuned to a new president’s desire to increase public spending through monetary creation, does not have the legal authority to directly create money. That is a right reserved strictly for the federal government and specifically the US Treasury. The Treasury can issue all the debt into the private sector it wants. The Federal Reserve can then go into the private market and buy all the debt it wants, adding that debt to its balance sheet. This is called quantitative easing. It is technically not the same thing.

Congress has tried to create agencies which would use the Federal Reserve to directly create money. These agencies and methods have all been ruled overwhelmingly unconstitutional by the Supreme Court. For the Federal Reserve to create money as MMT advocates want, you would have to amend the Federal Reserve Act. Certainly a possibility, but not easy.

Proponents of MMT point to how successful Japan has been in implementing what essentially looks to be the same policy. They have moved 140% of their GDP under the balance sheet of the Bank of Japan—essentially buying every bond available in the private markets. Their balance sheet is growing because they are buying stocks and carrying Japan’s entire annual deficit, which is large.

Why can’t we do the same? Japan and the US are both modern countries and economies. Europe, though not to the extent of Japan, also engaged in a large amount of quantitative easing. If it didn’t cause problems the last time, why not try it again on a larger scale? Especially if there is a crisis?

The explanation for Japan not having inflation or hyperinflation doesn’t fit into a sound bite and MMT proponents can answer it with dismissive sound bites that will be readily consumed and believed by a public wanting change, coupled with automation increasingly taking jobs and depressing wages. It will be a firestorm of political backlash and calls for change.

Do Deficits Matter?

The only way to really tackle the increasing deficits is to:

1.   Reduce Medicare and Medicaid benefits, means-test Social Security and at the same time raise the age of eligibility. But few politicians will run on a platform of cutting Medicare and Social Security, because no matter how they propose it, that will be what it means.

2.   Raise Medicare and Social Security taxes, or simply increase taxes on everyone or at least “the rich.” A lot. The definition of “the rich” would have to be lower than you might think. Most of my readers will be seen as the rich. Whether you feel rich is beside the point. That will still not balance the budget but there’s a high probability that it will send us into yet another recession, bringing calls for more direct spending and some form of money creation as the answer. That’s what MMT says we should do.

Any politician who proposes to limit entitlement spending to balance the budget will be accused of forcing austerity on those least able to afford it. That is not a winning platform. There will be no Clinton/Gingrich compromise. Austerity has no fun and simple sound bites. It requires a certain amount of pain, which is generally not politically popular.

Oh, a segment of the population will embrace such, but we must remember that elections are won on the margin. President Trump won by razor-thin margins in a few Midwest states. A change election in the middle of a recession or its aftermath could not only see those margins evaporate, but bring a wave of progressive and socialist politicians to join AOC and her friends.

Think 1932. The country was in true turmoil and there was a huge shift to the left. FDR didn’t get every policy he wanted, but he got a lot of them. It was truly transformational and has impacted the US for the last 100 years.

What would this look like? How do we get there? We are going to have several sessions at the Strategic Investment Conference to specifically address these issues. Is all this going to happen next year? No, but something along the above line is my base case for the 1920s. That means you need to begin structuring your life and your portfolios to avoid being in a tunnel with an oncoming train.

These are not simple changes, like simple buy and sell instructions, but will require much deeper structural change in not just your portfolios but perhaps your lives. It is something you want to think very seriously about while you have the luxury of time and not wait to the last minute. Waiting too long may mean you won’t be as prepared as you will wish.

Think about how you would deal with taxes 20 or 30% higher (or more!) than today’s, and potentially more. How would that change your lifestyle? What can you do today to deal with whatever may come? It may mean adjusting your lifestyle, saving more and getting out of debt, which takes time. For most families these are not quick decisions. But I think they will become necessary ones, especially if the first wave of a change election happens in 2020. Bluntly, Shane and I have already begun our own changes.

If somehow there is eventually a change back to austerity? Or a crisis forces it? That will mean even more change you need to be prepared for. And unfortunately, it’s not clear what will happen. We will have to get much closer to the actual events and elections to get a feel for the way actual events may develop.

Dallas, Houston, Cleveland a lot, New York, back to Puerto Rico, Austin and Dallas

Shane and I will be traveling to Dallas at the end of this week to begin to get ready to move the rest of our furnishings to Puerto Rico or to a new, smaller apartment that will be our Dallas base. Right now, it appears my Dallas high-rise home will sell within a few weeks. After an Ashford, Inc, board meeting in Athens, Texas I make a quick dash to Houston to meet with my SMH friends and then a meeting with an economics council at Rice University, my alma mater. Then it’s back to Dallas for a few days and then on to Puerto Rico.

Starting in the middle of March, I will be staying in the Cleveland area where I will have two separate cataract surgeries over a few weeks, maybe get a quick visit to New York, eventually back to Puerto Rico and then in early April I have dinners with clients and potential clients in Austin and Dallas. And then thankfully the rest of April looks mostly free of travel.

When I write to you about the potential for needs for lifestyle changes, I am also talking to myself. And taking action. If there is any interest, maybe I will do a private session on what changes I am making at the SIC. But everyone’s life and reality is different. I am still thinking through and making those changes,

It’s time to hit the send button. This has been an interesting letter to write. More speculation than economic rationale, but I can guarantee you this is something I worry about. And I think you should consider what it might mean for you. Have a great week!

Your making his own changes analyst,

John Mauldin
Chairman, Mauldin Economics