Creating Richer Lives

The stock market is sitting near a record high, so why doesn't it feel that way? This week, a weak jobs report and a cooler inflation number changed the conversation about the Fed, and something strange is happening underneath the surface of the market. Karl explains what it is, introduces a gauge most investors have never heard of, and looks at whether October's reputation in midterm election years holds up. Is the market flashing a warning, or did the correction already happen while nobody was looking?

The Fed just raised rates for the first time since 2023, but that's only half the story. Karl explains why mortgage rates are climbing even faster than the Fed is moving, what the Treasury is doing to try to calm the bond market, and why the 30-year Treasury just hit a level we haven't seen since 2004. Along the way, he shares a simple way to look at bonds that shows just how much has changed since 2020, and what it could mean for savers, borrowers, and investors.

A year ago the Fed was cutting rates. This week it raised them. So is inflation real, or is it just oil? Karl digs into the Fed's credibility, why stocks have often shrugged off the first rate hike, and the one Treasury yield that seems to see the Fed coming before the Fed does. Plus, a viral resignation has the biggest AI labs talking about slowing down. Is it conscience, or is it a moat?

A $5,000 check for every American adult sounds great. So why not $50,000? Why not a million?

The proposed "Trump Dividend" has put government checks back in the headlines. Karl Eggerss looks at what happened the last few times Washington sent Americans money, why more money doesn't always make us richer, and who quietly ends up paying the bill. Plus, what to do if a check ever lands in your account.

This isn't a political episode. It's the math, the history, and what it means for your money.

In the early 1980s, homebuilders started mailing two by fours to the Federal Reserve. Car dealers mailed in keys to cars nobody could finance. Farmers drove their tractors to Washington and parked them in a circle around the Fed building.

The chairman had a security detail and death threats. He was an economist.

In this episode of the History of Money series, Karl Eggerss goes back to 1979 through 1982, when Paul Volcker took interest rates to roughly 20 percent, pushed 30 year mortgage rates past 18 percent, and drove unemployment to levels this country had not seen since the Great Depression. On purpose.

Karl explains what made it necessary: Fifteen years of inflation that had stopped being a price problem and become a belief problem, where workers, businesses and consumers all started behaving as though prices would keep rising, which made it true. Killing that did not require changing the money supply. It required changing what a hundred and twenty million people expected.

It worked. Inflation went from about 15 percent to about 3, and it stayed there for forty years. The stock market bottomed in August of 1982 and began the greatest bull run of the century, three years after a famous magazine cover declared stocks dead.

But Karl does not tell it as a hero story. Millions lost jobs. Farm families lost land their grandparents had worked. The savings and loan crisis traces directly back to this period, and so does Latin America's lost decade. And economists still argue about whether it could have been done with far less pain.

Plus the takeaway most investors miss: Why a CD paying 15 percent in 1980 was a worse deal than one paying 2 percent today, and why the number on your statement has never been your actual return.

A post was written on the internet this week warning that Wall Street is quietly building the same kind of products that blew up the housing market in 2008. It had real numbers in it. It was a scary post. And likely it was read by a lot of people. So I went and looked at what's actually being built.

The short version: it isn't 2008. But the reason why is a lot more interesting than the headline, and there's one piece of this that nobody is talking about that flips the whole story on its head. There's also a part where this cycle does rhyme with the last one, and it's not where you'd expect.

If you've read one of these posts lately, this episode's for you.

Long rates hit their highest level since 2007, the national debt topped $40 trillion, and Treasury Secretary Scott Bessent announced he's doubling long-dated bond buybacks. Karl breaks down what that move actually is (hint: it isn't QE), why it looks a lot like 2011's Operation Twist, and why the 10-year is higher now than before the announcement. Plus: gold's rebound, Bitcoin's big week, and why earnings growth is the one thing holding this market up. He closes with a reminder that risk management still matters, even when it feels unnecessary.

Imagine waking up tomorrow and every bank in America is closed. Not just yours. All of them. No withdrawals, no cash, no way to make payroll. And nobody can tell you when it ends.

That happened. In March of 1933, every bank in the country was shut down for about a week. And when they reopened, Americans lined up not to pull their money out, but to put it back in.

In this episode of the History of Money series, Karl Eggerss explains what was actually breaking. Why the banks, not the 1929 crash, are what made the Great Depression great. Why your money has never sat in a vault, and why that isn't a scandal but the entire business model. How a bank run traps everyone into destroying a bank that would otherwise have been fine. And what happened on the Sunday night when a president got on the radio and, instead of telling 60 million frightened people to trust him, explained to them exactly how banking works.

Out of that week came the FDIC, which Franklin Roosevelt himself initially opposed, along with most of the banking industry. Their objection was that guaranteeing deposits would let reckless banks compete on equal footing with careful ones. That argument never went away, and the bank failures of 2023 brought it right back.

Karl closes with the practical part: what FDIC insurance actually covers, what it doesn't, and why the phrase "per ownership category" means many people are leaving protection on the table without knowing it.

October 19, 1987. The Dow fell 22.6% in a single day. It's still the worst day in the history of the American stock market, nearly double the worst day of the 1929 crash. And here's the part almost nobody remembers: the market finished that year up.

In this first episode of the History of Money series, Karl Eggerss walks through what actually happened on Black Monday. Why an expensive market, rising interest rates, and a currency fight set the stage. How a strategy called "portfolio insurance", sold to pension funds as a way to protect against losses, became the thing that turned a correction into a collapse. What the Federal Reserve did on Tuesday morning, when the real danger wasn't falling prices but a financial system that was close to seizing up entirely. And why an investor who simply did nothing that day was made whole within a couple of years.

But this isn't a tidy story, and Karl doesn't tell it that way. Plenty of people were genuinely ruined in 1987, almost all of them investors who had borrowed money. The circuit breakers created afterward are still debated today. And the underlying condition that caused the crash, automated selling that feeds on itself, arguably exists in greater volume now than it did then.

A look at the difference between a bad day and a bad outcome.

The richest man in the world, Elon Musk, just told The Economist that money won't matter a decade from now. Not that it'll look different, but that it won't matter. And he laid out the mechanism: AI and robots producing more goods and services than humans can possibly consume, governments simply issuing money to people, and deflation instead of inflation because output grows faster than the money supply.

In this episode, Karl Eggerss takes the argument seriously rather than dismissing it. Also, he finds that part of it is textbook-correct and part of it falls apart the moment you push on it.

What we get into:

• Why technology really is deflationary, and the history that proves it
• The one thing robots can't manufacture — and why it breaks the whole prediction
• Baumol's cost disease, explained with a string quartet
• Why abundance is a production question and universal income is a distribution question
• What Keynes got right in 1930, and what he got completely wrong
• Five practical adjustments for planning in a split-price economy

The most likely version of the next decade isn't "money stops mattering." It's that ordinary goods keep getting cheaper while the scarce things like land, care, healthcare, time keep getting more expensive. That distinction changes how you plan.