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ERROR: type should be string, got "https://seekingalpha.com/article/4426754-investing-with-inflation-150-years-data\n\nSay what you want about Seeking Alpha, but this writer is generally considered the most analytical author there and in no way limits her team's work to Seeking Alpha. I notice some people don't like the website, which is fine, but this woman could write for Forbes or academic journals etc. if she wanted to do so, in my opinion.\n\nThe article looks at inflation, money supply, international responses to inflation, and its effects on different classes of people. It also touches on how different asset classes may play out under different conditions.\n\nOf note is her conclusion that people who scream hyperinflation are farcically wrong, but she also notes when short term heavy inflation rears its head it stays on and doesn't dissipate. Say, if 5% inflation happens one year, it remains, even if it doesn't feature heavier inflation going further. Like many things in investing, the likely outcome is the middle road.\n\nShe also points out how the macro economy may be trending more towards labor over capital. Overall I think such effects would balance out, as better wages and cheaper equities seem great to me personally, although she doesn't delve very far into the thought.\n\nMy portfolio is equity REIT heavy so I especially liked her explanation of how real estate does okay with both higher inflation and higher interest rates, contrary to popular belief. Entry point is key--fixed rate debt is of course the best to have in an inflationary environment. \n\n\"Interest rates: When interest rates rise, it puts downward pressure on most asset prices, as we saw in the inflationary decade of the 1970s. When interest rates remain low, then monetary inflation remains a decent environment for asset prices, as we saw in the inflationary decade of the 1940s from the market bottom in 1942.\"\n\n\"Pendulum swings: Whenever the balance of power favors the wealthy, due to some combination of offshoring, automation, and the political environment, then monetary inflation is more likely to translate into asset price inflation. Whenever the balance of power shifts towards labor, due to labor onshoring, labor organization, and/or populist politics gaining a foothold, then monetary inflation is more likely to translate into consumer price inflation. This is largely correlated to wage increases or lack thereof, as well as being correlated to the size and scope of government transfer payments and tax policy.\"\n\n\"Inflation: During periods of moderate to high inflation, gold and commodities tend to do extremely well. Equities outperform bonds more often than not, but it depends on the type of equities and their starting valuations, and therefore have a huge variance. Real estate does well, mainly because leverage attached to it gets melted away from inflation. Bonds do poorly in inflationary environments.\"\n\n\"Deflationary shock: If temporary deflation is caused by a deflationary shock, such as a recession or depression, bonds are the place to be, and outperform everything else. Gold also generally does fine compared to other assets. Stocks and commodities usually perform very poorly.\"\n\n\"Productive deflation or disinflation: Bonds and stocks do well in goldilocks periods of strong real growth, with low inflation and high productivity gains. Between the two, stocks can do better. Commodities and gold are prone to poor performance in this type of environment.\nMy base case going forward continues to be that with the combination of sizable broad money supply growth, along with public opinion pushing the pendulum back away from globalization, consumer price inflation is likely to be higher in the 2020s decade than in the 2010s decade.\"\n\nThese points may be common knowledge to some, but I found it informative. Consumer price inflation is pretty identical to what we think of as \"inflation,\" so it seems fair to submit inflation will be higher than we are used to but not catastrophic or anything. So, for me, I like to think my REITs, most of which have pretty strong rent escalators linked to CPI (up to 3% annually with base increase no matter what), will do fine over a multi-year period. \n\nI hate precious metals since I don't really think of them as hard assets--it's just a series of price quotes to most people who hold it--there is some correlation to real estate. Consider how the ticker LAND had pretty extreme outperformance compared to its own asset class during 2020 which is still ongoing since that REIT focuses on owning specialty crop farmland with water rights. It outperformed gold swiftly, yet probably appeals to the same kind of buyer and pays cash dividends. \n\nI'd also like to remind people many REITs invest in free-standing properties on a triple net basis and that retail stores are still opening up en masse, largely among discount retailers which easily co-exist with internet commerce in poorer areas (think Dollar General, which works with companies like Instacart). Even with covid there was no retail apocalypse among corporate discount retailers. Most of these lease to REITs and pay a good deal of rent.\n\nIt may also be worthwhile to consider that with higher than usual inflation comes a risk of higher than usual interest rates being implemented, again, not to a catastrophic scare mongering level. Financials that focus on offering floating rate loans may do well over the coming years. Burry recently invested a good deal of money in a multi-cycle weathered business development company, Ares Capital, which would organically benefit from even minor rate hikes.\n\nI think the best thing I pulled from the article is: don't worry so much. Inflation will happen, but it won't be insane. Perhaps focus less on long duration equities, ie. very high multiple tech corporations, and at least consider adding assets that are more down to Earth."

ERROR: type should be string, got "https://www.bloomberg.com/news/articles/2020-10-22/covid-crisis-strengthens-u-s-dollar-s-role-in-global-economy\n\nOverseas borrowers have flocked to the dollar this year at a record pace, with sovereigns from Indonesia to Colombia and companies from Nissan Motor Co. to Manila’s water utility racking up sales of $1.29 trillion.\n\nIt’s a key economic takeaway from the Covid-19 crisis: just as happened in the wake of the global financial meltdown of 2008, the dollar is cementing its role as the world’s dominant currency even as unilateralist policies from President Donald Trump rile allies and rivals alike.\n\n\n“Whenever there is a crisis, companies and countries rush to make sure they have all the funding they need,” said Jim O’Neill, the former Goldman Sachs Group Inc. chief economist who coined the BRIC acronym.\n\n“The dollar markets are the only real source available, so the whole situation builds on itself,” according to O’Neill, who is chair of the international policy group Chatham House.\n\nThe ease of borrowing in dollars across the globe has been key in preventing the health and economic crisis spiraling into a financial one by providing companies and governments cheap access to funds. But it may also be sowing seeds for the next crisis: If the greenback sees a sustained appreciation trend, it will drive up debt-servicing costs, potentially creating, for some, repayment difficulties down the road.\n\nEverybody Loves Dollars\n\nThat’s a particular risk for emerging markets, where external debt including dollar borrowing is climbing at the fastest pace on record, with full-year issuance on track to eclipse $750 billion, according to Bloomberg Intelligence strategist Damian Sassower.\n\nFor now, the dollar’s been moving in the right direction. The Bloomberg dollar index has plunged about 10.5% from its 2020 high reached on March 23.\n\nA lack of global alternatives helps explain some of the dollar’s role. The euro’s status as a reserve currency remains limited, and China’s currency is still subject to capital controls.\n\n\nIt’s also a function of cost. With the Federal Reserve unleashing massive liquidity, and now expected to keep interest rates near zero for years to come, the greenback is all the more attractive as a funding source.\n\nU.S. Treasury yields fell to record lows as Fed cut rates, added stimulus\nEasier Fed policy helped the Philippines sell sovereign dollar debt at its lowest interest rate ever back in April. The dollar is the “universal currency” and the unit of global trade, according to Rosalia de Leon, treasurer of the Philippines, who says her country will continue to rely on the greenback to help fund its budget deficit.\n\nPhilippine and Indonesian companies have each sold more dollar bonds in 2020 than in any past full year.\n\n\n“The domestic financial market is not yet deep” in Indonesia, said Deni Ridwan, director of sovereign bonds at the nation’s Finance Ministry. By selling debt in dollars, Indonesia’s government can avoid crowding out local rupiah issuers, he explained.\n\nFor Nissan, the Japanese carmaker struggling to bounce back from both corporate scandals and the Covid crisis, the broad base of international investors was appealing when it turned to the dollar debt market for the first time in decades. It priced an $8 billion dollar offering in September, one of the largest corporate issues in Asia on record, as well as a 2 billion euro deal ($2.4 billion).\n\nThe total issuance of $1.29 trillion from non-U.S. borrowers this year is up 21% from the same period of 2019, according to data compiled by Bloomberg.\n\n\nThe record boom in offshore dollar bond sales has been echoed on the U.S. domestic front. Behind it all: the Fed not only cut its policy rate near zero in March, it introduced corporate-debt purchase programs that helped ensure the flow of credit even as coronavirus lockdowns walloped the economy.\n\nThe Fed also enlarged and expanded swap lines with monetary authorities around the world to address a sudden shortage of dollars abroad.\n\nFed provision of dollars to other central banks soared in 2020\nThe critical role of the U.S. currency also has a downside, however -- it leaves emerging markets reliant on American policy settings. While it seems distant now, Fed tightening down the road could spur dollar appreciation.\n\n\n“The extensive dependence on the dollar leaves the international financial system hostage to the whims of U.S. policies, especially those of the Federal Reserve,” said Eswar Prasad, who once led the International Monetary Fund’s China team, and is now at Cornell University. “For emerging market economies, in particular, it can create whiplash effects on capital flows and exchange rates.”\n\nWhile other major bond markets are seeing a bumper year too -- Europe’s primary bond market has surpassed 1.5 trillion euros of annual sales for the first time -- when issuers do go offshore to borrow, it’s still likely to be in dollars.\n\nEven as the share of dollar funding relative to the size of the global economy remains below its peak of a decade ago, its slice of international borrowing has climbed to a two-decade high, Bank for International Settlements data show. “It is clearly the dominant international funding currency,” the BIS wrote in a June report."

ERROR: type should be string, got "https://www.wsj.com/articles/federal-reserve-considering-additional-support-for-state-and-local-government-finance-11585335550\n\nFederal Reserve officials are reviewing new ways to support financing for state and local governments, many of which are on the front lines of the coronavirus pandemic and will face huge borrowing needs as revenues plunge, according to people familiar with the matter.\n\nThe economic-rescue legislation Congress approved this week asks the Fed to charge headlong into areas it has long considered taboo—supporting lending to businesses, cities and states. The Fed traditionally avoided intervening directly in credit and fiscal policy, preferring to leave such matters to Congress and the White House.\n\nThat is changing now because of the fast-moving economic crisis—and because Congress has essentially directed the Fed to get more involved by providing $454 billion to the Treasury to cover any losses in new Fed lending programs.\n\nThe Fed has dramatically expanded its balance sheet over the past two weeks, by nearly $942 billion to $5.25 trillion as of Wednesday. The central bank has lent freely to help firms avoid a wave of defaults that could turn a recession into something much worse.\n\nWhat the Federal Reserve Can Do to Fight Recession\nThe coronavirus pandemic is disrupting the global economy. WSJ’s Greg Ip explains what the Federal Reserve can do to stem the damage. Illustration: Carlos Waters/WSJ\n\nOver two weeks, the Fed has unveiled six lending facilities, five of them enjoying a total of $50 billion in support from the Treasury. Those programs have freed up cash for major Wall Street institutions and will backstop money-market funds and markets for commercial debt.\n\nDemocratic lawmakers have made support for city and state borrowing a priority in recent legislative talks, and the latest bill directs the Treasury secretary to seek a Fed lending program for municipal finance.\n\nState and local governments are confronting skyrocketing borrowing costs even as they are straining to pay expenses associated with the spread of the virus. House Speaker Nancy Pelosi told Fed Chairman Jerome Powell last week “to think big and help our states,” she said in an interview on PBS this week. “They are taking a big bite of this wormy apple and they need much more in terms of resources.”\n\nUnder its governing law, the Fed can’t directly buy corporate debt, and it is limited to purchasing municipal debt of six months or less. But it can work around these restrictions by creating lending facilities that lend or purchase debt, subject to approval of the Treasury secretary.\n\nThe Fed has already dipped a toe into muni-debt markets by expanding a money-market lending backstop to include certain types of municipal debt—and by purchasing some highly-rated municipal debt in a facility backing the market for very short-term commercial debt.\n\nAs of Wednesday, short-term interest costs on variable-rate municipal bonds have more than tripled compared with two weeks ago and are now higher than the rates governments typically pay on 30-year bonds, according to an index maintained by the Securities Industry and Financial Markets Association.\n\nMonday’s announcement by the Fed to include more municipal debt in existing lending facilities appears to have made only a small dent, bringing the index, which tracks bonds that adjust their rates weekly according to what investors are willing to pay, to 4.7% down from 5.2% last Wednesday.\n\nInterest rates on other short-term muni debt that spiked last week have fallen after the Fed said Monday it would purchase some municipal variable rate debt. Rates on water, power and sewer bonds issued by New York City and Los Angeles fell back to their typical rates of between 1% and 2% Thursday after hitting nearly 8% on Friday.\n\nKent Hiteshew, who established an office of state and local finance at the Treasury Department in the Obama administration, has been hired by the Fed to advise on muni markets, according to people familiar with the matter.\n\nAmong the questions Fed officials are considering: Whether to expand existing facilities to accommodate other municipal debt or to launch a new facility devoted to state and local finance. Fed officials will have to decide which municipal debt might be eligible for support and on what terms.\n\nThere are limits to how far the Fed can lend using its emergency authorities. Its loans must be well secured, which the Fed typically satisfies by restricting borrowing to highly-rated issuers.\n\n“The states and localities that need the most help are the most risky by definition,” said Ernie Tedeschi, an economist at Evercore ISI, an investment research firm, who previously worked in the Treasury Department during the Obama administration.\n\nThe Fed and Treasury brainstormed ways to support hard-hit state and local treasuries after the 2008 financial crisis, but opted against doing so.\n\nGovernments have been cancelling almost all planned long-term muni deals, borrowing they typically rely on for infrastructure needs and budget management, after investors fled muni mutual funds last week and prices plummeted. There was $761.7 million in total muni issuance last week, according to Refinitiv, compared to around $8 billion during a typical week earlier in the year.\n\nGovernment borrowers include states facing high Medicaid costs, delayed income tax collections and huge drop-offs in sales taxes as commerce has slowed to a standstill—and municipalities that run hospital systems, nursing homes, jails and public-health departments.\n\n\"As our borrowing costs go up, that’s fewer dollars they have to allocate to the crisis,” said Matthew Chase, executive director of the National Association of Counties.\n\nFed officials have long had broader philosophical objections to intervening in financial affairs of subnational entities. The central bank is the fiscal agent of the federal government, and they have viewed state and local finance as the domain of Congress and the Treasury Department.\n\n“The Fed’s response has typically been, ‘Look, if the federal government wants to support state and local finance, they can do that directly,” said Lewis Alexander, who served as an economic adviser at the Treasury Department from 2009-11 and is now chief U.S. economist at Nomura Securities.\n\n“There is a real reluctance to blur the line between the federal government and the state and locals. You start going down that road, it’s hard to know where to stop.”"