Global Macro Monitor

Prior probability, in Bayesian statistics, is the probability of an event before new data is collected. This is the best rational assessment of the probability of an outcome based on the current knowledge before an experiment is performed. Prior probability can be compared with posterior probability. – Investopedia

This week’s cover of the Economist confirms our priors that immigration will determine the November election, which we posted last week, ” This Will Determine The November Election. ” The Iowa and New Hampshire exit polls reinforced this prediction.

According to exit polls, the No. 1 issue for voters in Iowa and in New Hampshire was immigration. – Spectrum News

Though much of the immigration issue is, in effect, a refugee crisis, you haven’t seen nothin’ yet as climate change begins to accelerate and gain it’s mojo. We suspect we will even see it within the U.S. border.

I know firsthand, for I am a climate refugee.  

Donald Trump’s mother came from Tong (population 500), a remote Scottish settlement that was once in Viking territory. His grandfather came from Kallstadt (population 1,200), a Bavarian village that produced the Heinz family. Joe Biden’s ancestors came from Ireland and England. In America, everyone is from somewhere else—even Native Americans, though they have been there much longer than anyone. Such is the country’s appeal that 160m adults around the world say they would move there, too, if only they had the chance. That is many millions more than most Americans are willing to allow in.

This mismatch is at the heart of the issue that could cost President Biden the election. In 2016 Mr Trump rode “border chaos” all the way to the Republican nomination and then on to the presidency. At the time, he campaigned as if record numbers of migrants were coming across the border illegally. That was not true then, but it is now.  –Economist

COTD:  Cover of the Day

Any guesses?   

It’s not Juan Peron, who was reelected in a special election in 1973 after serving as president of Argentina from 1946 to 1955 before being overthrown by an “army-navy revolt led by democratically inspired officers who reflected growing popular discontent with inflation, corruption, demagoguery, and oppression.”   

Nevertheless, whatever and whoever, inflation will rule over the medium to long term. Do the math, folks. 

These are the conditions under which Latin American populists bully their central banks to keep rates low, a practice _______ dabbled in last time. The Fed is supposed to be independent, but Mr _____ will have a chance to nominate a stooge as chair in May 2026 and a pliant Senate could indulge him. The risk of more inflation would surge, perhaps exacerbated by more tariffs, which would also slow growth.  –  Economist

Not a bad cursory review of what will drive the price of money over the next decade, something we have been focused on for years.  The video is steeped in the old economic orthodoxy but provides just a faint shadow of the reality to come — think Plato’s Allegory of the Cave.