This episode of The Investor's Podcast interviews Lyn Alden about fiscal dominance, a macroeconomic theme impacting financial markets. The discussion covers the concept of fiscal dominance, contrasting it with monetary dominance, and explains why the S&P 500 remains high despite higher interest rates. Alden suggests that large monetized fiscal deficits are a key driver of inflation, impacting asset prices, and that the current environment is more akin to the 1940s than the 1970s. The interview also touches upon the implications of the US issuing more short-term debt and the role of liquidity in shaping market trends, recommending a three-pillar portfolio (equities, bonds, and hard assets) for diversification. Listeners gain insights into navigating the current economic climate and understanding the impact of fiscal policy on investment strategies.
