Increased government deficit spending will increase imports, expanding the trade deficit, because anything that increases spending and incomes in the economy will result in some additional spending on imports. But, lo and behold, saving and investment balance out automatically—largely through changes in profits—not just in a theoretical closed economy but also in a real one conducting trade with the rest of the world.

There is little discussion of the real constraint on monetary policy: oversized global balance sheets and the consequent dependence of global stability on low interest rates. Sufficient increases in either short- or long-term interest rates would lead to financial instability, and 2018 is likely to bring more of each.

In this bulletin from early 2018, we wrote that considering current interest rates, growth, and their outlooks, the dollar looked oversold versus many global currencies.

These two articles examine key reasons for the underperformance of hedge funds in this latest cycle, and why some hedge fund strategies may be able to take advantage of better opportunities ahead.

A slew of recent data continue to paint a rosy picture of the euro area economy, and we expect sustained momentum over the next couple of quarters. Yet intra-euro-area economic disparities could create future challenges for the ECB.

Expect expanding Fed concerns about the economy's imminent danger of overheating. The front end of the Treasury yield curve is likely to steepen and the dollar to strengthen.

Thoughts on being long equities in a time of high asset valuations, enormous corporate leverage, and dependence on unusually low interest rates. Figuring out when enough dominoes have been knocked over to assure a general collapse may be tricky.

By many measures, Japan's economy is showing the most sustained, robust growth since its bubble burst in the early 1990s. As long as global conditions remain benign, Japan Inc. appears poised to accelerate.

There is a brewing confluence of bearish short-term developments and long-term forces for the Canadian dollar.

The global reflation story is an important force in the U.S. bull stock market. But that does not mean that it must be true.