| October 17, 2019 No Pullbacks  The Federal Reserve has embarked on QE4—sort of. They are buying Treasury bills. Here we go again. There is a genus of financial commentary that revolves solely around the Fed and its relentless pursuit of credit expansion, and how it will result in inflation. I know, because I used to do this. This made for a good trade, from 2009-2011. Now it is mostly people being angry. But there is still a pretty huge appetite for this angry, anti-Fed commentary, so I will indulge in it, a little. The Fed should not be doing QE4. Something I used to say in The Daily Dirtnap—quantitative easing is not debt monetization. Debt monetization is a matter of intent. If the intent is to keep interest rates low to finance the government, then it is debt monetization. We are getting close. But ostensibly, there are some reasons to be conducting quantitative easing in T-bills. It will steepen the yield curve. Minneapolis Fed President Neel Kashkari went a step further and said that we should be doing yield curve control like Japan, to ensure the yield curve remains steep. Maybe we should let the market determine interest rates? Unfashionable idea, I know. To answer your question, yes, we are all going to hell. It will be because of the Keynesians. Their sack dance continues, because relentless credit expansion has so far ensured that recessions are in short supply. My guess is that we’ve lengthened the cycle and increased the amplitude. If you think inequality (and the political angst that goes with it) is bad now, you ain’t seen nothing yet. This Is Not a Newsletter about Finance No fun being a finance junkie these days. All bad news. And yes, stocks going up is bad news, if they’re going up for the wrong reasons. We live in an economy full of distortions caused by interventions of varying magnitudes. And it is definitely going to get worse. If you sat around and worried about this stuff all the time, you would make yourself miserable. But if you sat around passively and didn’t take any action to protect your assets, that wouldn’t be very smart, either. I suspect many readers of The 10th Man fall into the same camp as me—you have enough wealth to get totally screwed by the authorities, but not enough that you can really protect yourself. You’re not a billionaire. You do things where you can—buy gold or bitcoin—but I can think of a hundred different ways that won’t work out, either. My recommendation is simple. Do not spend too much time thinking about this stuff. Of course, if you were really paranoid, you’d be on the first plane to Singapore with a tube of toothpaste full of diamonds. I really do not want to get to that level of paranoia. It isn’t healthy. Then again, there have been times in history where the people with that level of paranoia were the ones who survived. Things You Should Invest In This is an investment newsletter, so let’s talk about things you should invest in. I will preface this with the fair warning that the following applies to people who have already accumulated wealth. Experiences: Concerts, clubs, hiking trips, winery tours, etc. You should spend money on memorable experiences, then treasure the memories. Fly to Paris for a weekend. Have you ever done that? I have done that. Will never forget it. When your favorite band comes to town, go see them. I know it is past your bedtime. You only get one shot at this. Luxury: Suits, shirts, casual clothes, watches, shoes, cars. I know the 2005 Corolla helps you save money. We do not know what’s going to happen over the next ten years. You might as well enjoy your money now. I’m not kidding. Food and Drink: Nice dinners, fine wines. Nothing like the tactile sensation, however fleeting, of eating really good food. Things you should not invest in: Stocks And Bonds: They give you no enjoyment. Soon, they will be taxed out the wazoo. (Please take me seriously, but not literally. Of course, you will have stocks and bonds. The point here is to think about consumption as an asset class, of sorts.) A lot of people, myself included, spend time trying to think up the optimal asset allocation. Honestly, most assets look bad, and I’m pessimistic enough about the future that it makes me want to enjoy the present. Especially if you’re of an age where you should be decumulating assets anyway. He who dies with the most toys does not win. So my investment “advice” these days is kind of like anti-investment advice. Everything is unattractive, and we’re all going to get hosed by wealth taxes and negative interest rates, so you might as well enjoy yourselves. Start today. If you’re not in the habit of going out to dinner on a Thursday night, do it. And stop by the jewelry store on the way home. I doubt there will be a wealth tax on that. If you disagree with me about any of this, let’s talk about it! Call the Jared Dillian Show on 844-305-7800, weekdays from 6-8pm EST, and let’s have it out. Music And finally, some music for the end of the world, courtesy of me. 
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