Global CIO Outlook

Guggenheim Global Chief Investment Officer Scott Minerd offers insights on macroeconomic trends and the potential impacts on global investment opportunities.

The Sustainable Development Quotient

Scott Minerd discusses the importance of transitioning sustainable development into an institutional asset class.

January 03, 2013

Restricted Room For Higher Rates

Interest rates should rise through 2013, however, the level to which they can increase will be limited by the Federal Reserve’s ongoing attempt to stimulate activity in the housing market.

December 04, 2012

The Keynesian Depression

The Great Depression brought about the Keynesian Revolution, complete with new analytical tools and economic programs that have been relied upon for decades. Over the years, the accumulation of these policy actions has reduced the flexibility to deal with crises and nations have now exceeded their ability to finance themselves without relying on their central banks as lenders of last resort. Increasingly large doses of monetary policy are required just to keep the economy expanding at a subpar pace. Some have referred to this as reaching the Keynesian endpoint.

October 10, 2012

Return to Bretton Woods

The gold-convertible U.S. dollar became the global reserve currency under the Bretton Woods monetary system that lasted from 1944-1971. This arrangement ended because foreign central banks accumulated excessive reserves of U.S. Treasuries, threatening price stability and the purchasing power of the dollar. Today, central banks are once again stockpiling massive Treasury reserves in an attempt to manage their currency values and gain advantages in export markets. We have, effectively, returned to Bretton Woods. The trouble is that the arrangement is as unsustainable today as it was during the middle of the last century.

August 22, 2012

The Faustian Bargain

Since 2008, governments that have relied upon quantitative easing instead of undertaking structural reforms have arguably entered into a Faustian bargain of epic proportions. What are the potential consequences of global central banks printing trillions of dollars, euros, pounds, francs, and yen in an attempt to provide short-term fixes for their nations’ long-term economic problems?

March 07, 2012

Winning the War in Europe

In centuries past, there have been many wars fought to bring Europe under one economic and political union. Today, in many ways, Europe is engaged in another war – a war to preserve the hard-fought gains of monetary and fiscal union built over the past five decades. Just as past European conflicts resulted in grave economic costs and massive amounts of debt, this fight has taken a similar path. How long will it take to resolve? The interwar period from 1918 to 1939 may offer some insight.

December 31, 2011

The Triumph of Optimism

Are the dark clouds finally breaking? There is positive economic momentum in the United States, progress in Europe, and global policy accommodations being implemented that are pro-cyclical and supportive of longer-term economic growth. Over the course of history there is a certain triumph of optimism. From an investor’s perspective, the best time to be an optimist is when there is a parade of pessimism marching down Main Street.

November 03, 2011

Return of the Phillips Curve

Worried about millions of Americans out of work, some members of the Federal Reserve’s policy committee say they’re willing to tolerate higher inflation. The idea that rising prices can reduce unemployment is rooted in the Phillips Curve, a half-century old economic theory. History shows the trade-off can hold, but only temporarily and only if expectations of inflation are well anchored.

September 01, 2011

Keep Calm, Carry On

Financial markets have been unnerved by Europe's sovereign debt crisis, a slowdown in global economic growth, and political rancor; but for far-sighted investors, today's market turmoil presents a rare opportunity. The torrent of liquidity unleashed by major central banks should be a boon for asset prices in the medium-term. Fundamentals, at least in the U.S., also remain far healthier than the market's recent slump implies.

July 27, 2011

Europe’s Cognitive Dissonance

European policymakers have had a hard time accepting the reality of the region’s debt crisis. Bailouts and belt tightening have merely postponed the inevitable: a restructuring of sovereign debts and harmonization of fiscal policies.

May 19, 2011

The Case for More Monetary Elixir

The surprise in 2011 may be lower rates as Treasuries and fixed income securities rally in the midst of growing uncertainty. Further down the road, if price pressures moderate, employment remains slow to recover, and fiscal headwinds mount, then Fed Chairman Ben Bernanke may fire up the printing presses once again.