On top of all the insanity of 2020, Bitcoin went from a low of $3,915 in March to a new high of $24,300 this week. Much of this rise in the price of bitcoin has been driven by speculation that cryptocurrencies are poised to supplement gold as the quintessential countercyclical asset. For thousands of years, gold has played the role of the safe-haven asset, a place where cash escapes to in times of uncertainty. Used in this way, it enables investors to diversify their holdings and prepare for market downturns, a trade that worked well in 2020.

The assignment of…

Regardless of who wins the upcoming election, the U.S. cannot afford another four years of political dysfunction. This last round of stimulus talks is just the latest demonstration of how bipartisanship is hurting us. As households and businesses continue to struggle with the economic fallout of Covid-19, our political leaders have failed to pass a second much-needed stimulus bill that has been on the table since May.

The U.S. government is built on the idea of checks and balances, and despite common perception, partisanship is the rule rather than the exception. However, it is clear that we cannot address our…

Photo by Josh Appel on Unsplash

Since the beginning of the year, the Federal Reserve has poured over $2.9 trillion worth of freshly minted dollars (mostly using the 0’s and 1’s of a computer) into the U.S. economy. Inevitably, as soon as the Fed fires up the printing press, fear of inflation, loosely defined as a general rise in the prices of goods and services, creeps into the hearts of many.

Others immediately point to the Great Recession and the then unprecedented amounts of monetary stimulus in 2008–2014 and dire predictions of a second Zimbabwe that never materialized. …

The U.S. government debt is on the minds of many, including President Trump’s, who recently released a proposed budget for the federal government. If his first term spelled tax cuts for corporations and the ultra-wealthy, his proposed agenda going forward marks a steep cut in social safety nets, medicare, and medicaid, while increasing military spending and NASA’s budget.

Given that the House is controlled by the Democrats and bipartisanship would be needed to pass the budget in the Senate, it’s safe to assume the final budget will look nothing like the one currently on the table. …

Beyond Meat’s IPO this past May was the most successful public offering in nearly two decades. Since, the company that brands itself as the ‘Future of Protein’ grew its revenue by 142%. Together with its rival Impossible Foods, the company’s products have gone from boutique restaurants to mainstream fast food chains.

Despite these achievements, meat alternatives such as Beyond Meat and Impossible Foods are far from displacing meat, and serious questions remain about their ability to have a meaningful and long lasting impact on food systems.

The first set of concerns relates to the health risks of meat alternatives. Many…

The question ‘how is the U.S. economy doing?’ is an objective and non-partisan one, right? Wrong. A recent study by Pew Research suggests that how we view the economy is deeply connected to our political opinion and is often unrelated to how the economy is actually doing.

As the chart below shows, who holds the presidency has a far greater effect on how we view the economy than GDP growth. This is true for Republicans under the Clinton and Obama administrations, as well as for Democrats during both the Bush and the Trump administrations.

With Wednesday’s Fed rate cut and the European Central Bank’s massive stimulus package, low interest rates seem to be here to stay. For the millennial generation that entered adult life around the Great Recession, low interest rates appear to be the norm, but this is hardly the case. The Fed’s effective rate going back to 1955 (Chart 1) illustrates how unusual the times we live in are.

Chart 1 — U.S. Federal Funds Effective Rate from 1955 till September 20th, 2019. The FOMC resumed rate hikes in December 2015, after maintaining the Fed funds rate at around 0 percent for seven years following the last recession; then in July 2019, the FOMC announced the first rate cut in over a decade, hoping to mitigate the impact of global slowdown on the US economy, and curb market volatility.

While it’s impossible to predict what will happen to interest rates next, an analysis of historical rates suggests a few clues. Up until 1998, the Fed often made minute changes to its effective…

Originally published on June 7, 2019 at https://www.vodiacapital.com.

Federal Reserve Chairman Jerome Powell announced on Tuesday that in face of the trade uncertainty, the Federal Reserve would “act as appropriate to sustain the expansion”. Investors interpreted this as an indication that a rate cut by the end of the summer is likely, sending short term interest rates plummeting, and stocks soaring. Such is the power of even seemingly innocuous statements by the Fed Chairman.

The only part of the 2018 tax cuts that made sense to me was the reduction in the corporate tax rates. At the time, I believed that in an increasingly interconnected and highly mobile world, the impact of taxes on businesses, and especially on their investment decisions, should not be ignored. Clearly, I thought, the previous federal statutory tax rate of 35%, when compared to an OECD average of 27%, was not conducive to economic growth or investment and should be reduced.

The data, however, does not support this conclusion. When looking at corporate taxes paid relative to GDP, U.S…

Talking about money is hard. Talking about aging is even harder. Mix the two, and things get really messy. But, while medical practices continue to improve, physical and mental deterioration, and death, remain inevitable. These steps will help aging individuals and their families navigate the financial decisions that come with aging.

1. Communicate early and often

Conversations about care, finances, and end of life are difficult conversations, and they do not get easier with time. Like any uncomfortable task, the more you practice, the better you become. Start discussing these topics as early as possible, even if these topics do…

Avi Deutsch

I am a Principal at Vodia Capital where I help investors achieve their financial goals by aligning their investments with their values.

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