I’ve written 10,817 posts in the last 10 years. About 25% of those posts were about the operational nature of the US monetary system with the intent to explore and explain how the monetary system works. My goal was simple – to explain the monetary system in such a way that people could navigate the ocean of bullshit narratives out there without succumbing to the many biases that plague so many investors. But after 10 years I think it’s safe to say that I have failed on a massive scale.
I was browsing Twitter last night when I ran across this Tweet from a prominent bond manager:
US National Debt just topped $20T, abetted by QE. Now talk of eliminating “debt ceiling”. Exactly what was feared when Fed was created 1913.
— Jeffrey Gundlach (@TruthGundlach) September 12, 2017
“Holy shit!” I said to myself. “Can this be real? Does the world’s most prominent fixed income manager really believe QE funded the national debt, that the removal of the debt ceiling is dangerous, that $20T in debt is dangerous and that the Federal Reserve is a bad thing?”
I have no idea how much of that he really believes and how much of this is just promotional narratives, but the one thing I know is that the thousands of “likes” and “retweets” this Tweet received is evidence that my message has massively failed. Which is crazy because I’ve explained the monetary system in much the same way that someone might describe how a car drives. Not only did I describe how the car drives, but the car drove exactly how I repeatedly said it would. I was massively right about many big predictions – no US insolvency, no hyperinflation, no surging interest rates, no boom in growth and on and on.¹ But still, the political narratives outweigh operational and evidence based facts.
Sometimes I feel like I’m screaming into a hole about these things. Or, as my wife put it “You’re not failing. It’s just that there aren’t very many people who care enough to do the hard work to understand what you’re saying.” Sigh. I won’t stop screaming into this hole, people. I refuse to believe that scary stories will win out over evidence in the long-run.²
¹ – Read some of my failing research. It’s all free. You just have to have an open-mind and a little bit of time. How could you refuse hours of dry, boring material about finance and economics?
- Understanding the Modern Monetary System
- Understanding Money
- The Biggest Myths in Economics
- More Recommended Reading
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.