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The Investor’s Podcast: ESG Investing, The Death of 60/40 and More

I joined The Investor’s Podcast again this week to discuss a wide range of topics. The YouTube chapters in the interview are linked below and you can listen to the full audio here.

I caught some flak for my comments on ESG investing and whether Central Banks should have a climate change mandate. I didn’t answer this as clearly as I’d wished, but my general comments were accurate in my view. In short, the Fed (and other Central Banks) operate with very blunt instruments. Fighting climate change requires a more targeted and precise policy approach. This is better suited, in my opinion, with regulations and fiscal policy. The Fed could nudge firms in the right direction there, but I think it would be a mistake for the Fed to start using traditional monetary policy tools with a goal on targeting ESG and climate change. These tools are too blunt and Monetary Policy is not the right lever to pull there. I hope that clarifies some.

Please enjoy the interview.

00:00:38 – What the difference is between CPI and PCE

00:08:23 – Whether central bankers should be elected? 

00:15:24 – What the velocity of money is, and how it impacts inflation?

00:20:23 – What it means for inflation and the US dollar that the world is decoupling 

00:25:26 – What a balance sheet recession is and why it is important to understand investors

00:31:49 – Whether the 60/40 portfolio is still working

00:39:06 – Which longer cycle we are missing in the financial markets 

00:40:45 – Whether the next 40 years of stock market performance will look like the previous 40 years

00:46:28 – Whether central banks fight global warming? 

00:54:43 – Which portfolio to build for independence and sleeping well at night

01:05:44 – Which bias does the new generation of investors have