Global Macro Monitor

The Treasury released the latest budget data last week, indicating a 12-month rolling deficit of $1.7 trillion, equivalent to our estimated 5.86% of GDP.

The deficit-to-GDP ratio is trending positively, showing a decrease in the deficit relative to GDP. This improvement is largely due to budget revenues growing more than twice as fast as expenditures and a continued wind-down of the COVID-19 deficits. 

Interest payments on the national debt have increased by over 35% year over year, surpassing the U.S. government’s spending on military programs.

It’s not likely anytime soon the Treasury will hit the 3 percent of GDP deficit levels seen at the end of the Obama administration.  Unless, of course, the markets force the issue. 

Note, a typo in the above table: FY ‘22 should read FY ‘23.

This chart really fits our zeitgeist of shorter attention spans and what used to be a 280-character culture. 

President Biden has fully recovered from the downturn in his election prospects, as observed in the prediction markets after the Special Counsel described him as a “sympathetic, well-meaning, elderly man with a poor memory.”

The rebound coincides with the recent poll in Pennsylvania giving him a 10-point lead over the former president,

The good news for President Joe Biden comes in the form of a two-horse race against former President Donald Trump. After landing within the margin of error against the 45th president in February, the 46th president has more than doubled the 4.0% margin of error (MOE) in this survey with a 48-38% percent advantage. An additional 13% favored “someone else,” while just 1% indicated that they did not know. – PoliticsPA

However, when third-party candidates are considered, Biden’s lead narrows to within the margin of error.

We have no doubt the former president will try to conflate today’s market volatility, which we expect to continue, with Biden’s rising poll numbers – “the market is tanking because it’s anticipating a Biden victory in November” – for example. 

We also expect geopolitical events to continue to heat up, as the markets began to price in today.   

Rising gas prices are political death, so look for the shenanigans by the bad actors in foreign lands who would like to see Trump win to continue. 

Gold Price

In our March 9th post,  What’s Up With the Gold Price?, we dismissed the notion the rise in the gold price could be solely attributed to expected Fed rate cuts and offered up the following,  

Nobody knows for sure, but our best guess is it’s a safe haven play with expected domestic and geopolitical instability to increase as the year progresses.   Stay frosty, folks.  

Today, the market woke up. 

In my early teens, I befriended a Cy Young Award-winning pitcher from the Dodgers who eschewed the celebrity culture of autograph signing. He would often advise young fans to seek autographs from their teachers instead, arguing that educators play a more pivotal role in their lives than sports figures. He wasn’t very popular because of that stance, but his perspective was profoundly insightful.

The question arises: who holds greater significance in our society, a teacher who instructs first-graders in reading or a social media influencer? Educators, especially those teaching fundamental skills like reading, contribute extensively to society beyond the immediate impact on each student. They provide numerous positive externalities that enhance our communal life. The value of a well-educated population is a public good, an essential element for the foundation of a functional society.

The Economic Policy Institute, a left-leaning think tank, calls this difference the “teacher pay penalty.” EPI calculated that, in 2022, teachers earned only 74 cents on the dollar compared with comparably educated professionals. The right-leaning Hoover Institution reached a similar conclusion in its 2020 report on educator compensation, showing that, even adjusting for factors such as talent and experience, “teachers are paid 22 percent less than they would be if they were in jobs in the U.S. economy outside of teaching.” – Washington Post

This is a must-view, folks.

One of the most important Collective Illusions we’ve ever discovered has to do with the way that people define a successful life. It turns out the vast majority of the American public believes that most people in the country care about wealth, status, and power when, in fact, the opposite is true. The vast majority of the American public is focused on a more personal fulfillment orientation but our kids are paying an incredible price because they do not understand that this is an illusion.  They try to chase fame because they believe that’s what other people will recognize as success.