Every two or three weeks, I see another article published on how Warren Buffett’s holding company, Berkshire Hathaway, is underperforming the S&P 500 and how his cash pile of over $128B is a giant waste – since it could be making his shareholders a fortune, had it been invested in this late-stage bubble surge.
In 2019, the Federal Reserve’s stimulus packages – which SHOCKED the markets, since they represented a full U-turn in terms of policy, compared to the aggressive tightening in 2018 – were one of the primary reasons that the stock market soared by so much.
Behind closed doors, FED Chair Jerome Powell has very different thoughts and holds quite contrasting points of view regarding how the Federal Reserve is handling monetary policy, from the ones he lets out to the media.
Today, there is over $17T invested in bonds that guarantee a loss, if held to maturity. Think of the madness: You invest $101 today and in 2030 you will receive back $100. While the rate of inflation has been around 1.5% and GDP growth has been 2%-2.5% in the passing decade, owning bonds hasn’t been a bad choice or a lousy decision.
On Monday, Trump and Mnuchin met with FED Chairman Powell at the White House. They discussed many topics, but from the looks of it, nothing major came out of it.