Blog Posts

Cryptocurrency vs. stocks really has its root in where we are in the global debt cycle, fiscal and monetary policy, money, credit, and the role of the dollar and other reserve currencies going forward.  The short answer in the cryptocurrency vs. stocks debate is that they’re both viable as stores of value to grow and […]

In basic terms, the cross currency basis is a measure of the relative shortage of a certain currency in the market relative to its demand. Cross currency basis swaps (CCBS) reflect this relative shortage and work as a type of currency hedge, or a type of hedge on a broader global portfolio.  The premium or […]

The largest differences in policy are not seen between developing countries, but among emerging countries. This is driving movements in emerging market FX.  Emerging market are running tighter policies Emerging markets as a whole are running much less easy monetary policy, lower budget deficits relative to output, and are generally trying to keep sound currencies […]

The basic idea behind the merging of fiscal and monetary policy is to get the inflation rate up in an economy. The basic premise driving asset allocation in a rising inflation environment is that assets with fixed returns get squeezed and become less attractive. Other types of assets are needed to provide inflation protection. Let’s […]

Could Bitcoin replace the dollar and undermine the United States? Bitcoin could have some role as a store of value and perhaps some type of transactional utility. Some, like Peter Thiel, have asserted that cryptocurrencies are a type of threat to sovereign fiat currencies.  A country will always want to control all the money and […]

Dynamic hedging is a form of risk management related to derivatives risk. It is the process by which a trader hedges a position in light of shifts in underlying variables, such as delta and gamma.  This is done to avoid losses that could potentially occur if the hedge is not put on. For example, if […]

Can bitcoin and cryptocurrency replace bonds? Bitcoin and cryptocurrency have seen large price appreciation and considerations as an alternative store of value. On the other side of the spectrum, bonds are seeing price decreases with very low fixed yields associated with them. Bonds – especially nominal rate bonds – have a lot going against them. […]

  Note: This article was first published on May 13, 2021. The shift from the long low-interest rate era began in late 2021. The Bank of England started raising rates in December 2021, thus becoming the first major developed-market central bank to commence tightening after the Covid19 pandemic. The Federal Reserve followed in March 2022 […]

How much of your portfolio should be in cryptocurrency? In previous articles, we discussed cryptocurrency as an alternative to stocks and gold. To some extent, it could be. The main issue with cryptocurrencies right now is their speculative nature. It means there’s a lot of volatility, often some 10x the level of stocks, depending on […]

Increasingly, decision-making in the markets is done through artificial intelligence (AI), machine learning, and algorithmic decision-making.  Back in the 1990s and even into the 2000s and today, much analysis on financial markets and securities was done on spreadsheet programs like Microsoft Excel. That’s now changing to more complex ways of analyzing the world. The human […]