Alfonso Peccatiello on credit sugar rushes and the macro end game

Paul Buitink interviews independent macro analyst and former ING asset manager Alfonso Peccatiello in the beautiful Italian restaurant Le Due Sicilie in Amsterdam. Alfonso now runs the newsletter The Macro Compass.

They discuss a range of topics from bond yields and inflation, to the (Dutch) real estate market and the way society is addicted to credit sugar rushes leading to ever bigger debt crises. Alfonso reflects on the impossibility of central bank policy and the environment of the rising debt mountain that can only be serviced with lower real yields. He also lays out the different end game scenario's including gold and bitcoin.

If there is one book he advises you to read about the financial system it's The New Economics, A Manifesto, by Steve Keen.

Follow Alfonso here:

Follow Paul here:

[alanmrsic]

On the productivity side, let's compare Government Budget in Italy averaged -3.63 percent of GDP from 1995 until 2021, reaching an all time high of -1.30 percent of GDP in 2007 and a record low of -9.50 percent of GDP in 2020. VS Government Budget in Netherlands averaged -1.78 percent of GDP from 1995 until 2021, reaching an all time high of 1.70 percent of GDP in 2019 and a record low of -8.70 percent of GDP in 1995. Again, great interview, thanks for sharing your knowledge, I enjoyed it very much!

[alanmrsic]

Nowadays, our asset-prices based economy can only flourish in an increasing prices environment, right! The financial economy has marginalized the so called real economy. What could be a potential catalyst to turn this around?

[detectiveofmoneypolitics]

Still watching Frank G Melbourne Australia 🇦🇺 ❤️

[sportsander]

Great interview! And I am going to check that restaurant:-)

[alanmrsic]

Fiscal spending part is very much a sweet one. Oké, great stuff, Italy has a huge public/government debt 155.3% of GDP, while private debt very low, got it! But oké, who is going to buy your government bonds in that case, perhaps the ECB bought 134.7 billion euros ($160 billion) worth of government bonds. The single most important argument for appointing the ECB as a lender of last resort in the government bond markets is to prevent countries from being pushed into this sort of bad equilibrium—a self-fulfilling debt crisis. Source: Paul De Grauwe 18 August 2011. We are still kicking the same can down the road. Japanification :-)

[alanmrsic]

What about financial engineering, what part of the real estate economy does it actually play?

[alanmrsic]

Great stuff, magnificent guest, super interview!

[mikevanweerlee]

Great setting + Great guest + Great interviewer = Super Video

[KabbalahredemptionBlogspot]

Never realized how low wages are one of the sugar rushes driving asset values. On the other end of this data point are people who can't make ends meet while working 2 full time jobs.

[WillieWortel]

Altijd geweldig om naar Alfonso te luisteren (ondanks het Italiaanse ritme ;) En ook Paul bedankt want jullie gaan toch nét even dieper dan de gemiddelde podcasts en dat heb ik nodig om e.e.a. te begrijpen

[ricardoafonso]

Good stuff guys .. I also wonder about the same, how far up can bonds go before it cracks. Will try out the restaurant next Friday!

[alanmrsic]

Why would someone want to hedge against the interest rate risk, while Interest rate is a 100% monitary policy made by central banks. Why don't hold Central Banks government bonds in stead of GOLD reserve? I think this whole idea is a product of keynesian economics. Let's start Hayek style & milton friedman, this has nothing with culture to do, but with policy, let's go austrian school of economics :-)