Unhedged Guns and butter and credit
90 snips
Apr 7, 2026 They compare today’s inflation talk to both the 1970s and the 1960s 'guns and butter' fiscal tradeoffs. Military and consumer spending gets linked to market mania and the fate of long-duration tech stocks. The conversation also digs into stressed consumer credit and rising delinquencies among younger borrowers. Quick takes cover pricey Europe flights and skepticism about AI-enabled glasses.
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Long Duration Assets Vulnerable To Rising Inflation
- If inflation rises like the late 1960s, long-duration assets (long-dated yields and growth/tech stocks) will likely suffer.
- Rising core inflation from under 2% to ~6% between 1965 and 1970 illustrates how fast long-duration real returns can be eroded.
Nifty 50 Parallels With Today's AI Hype
- The late-1960s Nifty 50 hype parallels today's AI-driven concentration in a handful of mega tech stocks.
- Both eras featured expensive 'buy-and-hold forever' stocks like Kodak/Xerox then and the Magnificent Seven now.
1960s Growth Versus Today's Sludgy Labour Market
- A key disanalogy is growth and tight labour markets: 1960s fiscal and war spending drove strong growth and falling unemployment.
- Today growth looks weaker and labour market dynamics are 'sludgy' rather than tightening further.
