When it comes to the liquidity problems, the "plumbing risks" article does not address the growing elephant in the room, Private Equity, nor does it address Trump's plans to put U.S. pensions at greater risk.
"When considering the economic activity of Private Equity-backed businesses and related consumer spending, the total contribution has already exceeded $4.7 trillion."
The amount of private debt assets under management (AUM) in North America has now eclipsed $1 trillion.
(Additionally) "The Trump administration has taken its first official step to open Americans’ savings pots to private equity, cryptocurrencies and other alternative investments.
The US labour department on Tuesday rescinded 2021 guidance issued under the Biden administration that had chilled would-be investing by 401k plan sponsors in the leveraged buyout industry.
The move is a critical step in President Donald Trump’s push to open 401ks — the term for US retirement savings accounts — to private investment firms who see the system as a crucial market to draw in assets, particularly as large pensions and endowments pull back.
The private equity industry has estimated that accessing 401k plans could deliver hundreds of billions of dollars in new industry assets."
If there is one thing we know, it's that Private Equity allows no mark-to-market. If you don't believe this, then just check out the pension funds that made the mistake of investing in Private Equity firms like Opendoor single family housing and are now losing money hand over fist. .
Thanks Alf! Sorry if this is a silly question, but where is the money creation happening? If the commercial bank is helping fund the deficit by buying a Treasury at auction, surely they're just losing some reserves and gaining a Treasury of the same value so their net assets stay the same? If the bank bought a Treasury in the secondary market, I guess they could fund this by deposit creation which would be "money printing" similar to loan creation. But where is the money printing happening if the bank buys a Treasury at auction and sends some reserves to the TGA to pay for it? Again, sorry I'm missing something obvious.
Thanks for the information, it’s a bit over my head, but I really appreciate your content!
When it comes to the liquidity problems, the "plumbing risks" article does not address the growing elephant in the room, Private Equity, nor does it address Trump's plans to put U.S. pensions at greater risk.
"When considering the economic activity of Private Equity-backed businesses and related consumer spending, the total contribution has already exceeded $4.7 trillion."
The amount of private debt assets under management (AUM) in North America has now eclipsed $1 trillion.
(Additionally) "The Trump administration has taken its first official step to open Americans’ savings pots to private equity, cryptocurrencies and other alternative investments.
The US labour department on Tuesday rescinded 2021 guidance issued under the Biden administration that had chilled would-be investing by 401k plan sponsors in the leveraged buyout industry.
The move is a critical step in President Donald Trump’s push to open 401ks — the term for US retirement savings accounts — to private investment firms who see the system as a crucial market to draw in assets, particularly as large pensions and endowments pull back.
The private equity industry has estimated that accessing 401k plans could deliver hundreds of billions of dollars in new industry assets."
If there is one thing we know, it's that Private Equity allows no mark-to-market. If you don't believe this, then just check out the pension funds that made the mistake of investing in Private Equity firms like Opendoor single family housing and are now losing money hand over fist. .
Thank you
Thanks Alf! Sorry if this is a silly question, but where is the money creation happening? If the commercial bank is helping fund the deficit by buying a Treasury at auction, surely they're just losing some reserves and gaining a Treasury of the same value so their net assets stay the same? If the bank bought a Treasury in the secondary market, I guess they could fund this by deposit creation which would be "money printing" similar to loan creation. But where is the money printing happening if the bank buys a Treasury at auction and sends some reserves to the TGA to pay for it? Again, sorry I'm missing something obvious.
So……gold?
Thank you to keep us thinking
With equity prices at all time highs a late September to mid-October cycle low might be projected
Excellent article.
Not sure I agree on the effect of less government handout.