On episode 40 of “In the Know,” (March 10, 2023) ARK CEO/CIO, Cathie Wood, weighs in on M2 growth, the Biden budget proposal, cryptoassets, and why recent banking failures should be a wake-up call for policy makers.
As always, she discusses fiscal policy, monetary policy, market signals, economic indicators, and innovation. We hope you find this monthly series useful, especially during periods of heightened volatility. Stay Healthy. Stay Innovative.
00:45 – Intro
02:55 – Fiscal Policy
08:21 – Monetary Policy
31:04 – Economic Indicators
33:26 – Market Signals
37:57 – Innovation
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The Federal Reserve is one of the most powerful economic institutions in the world, controlling the flow of money in the United States by setting interest rates and implementing monetary policy. Over the past year, the Fed has been at the forefront of efforts to stabilize the US economy in the face of the COVID-19 pandemic, using its toolkit of tools to inject liquidity into the financial system, support lending to small businesses, and keep interest rates low.
However, some investors and economists have been critical of the Fed’s approach, arguing that its policies are inflating asset prices and fueling inflation. In a recent episode of In the Know with Cathie Wood, the founder and CEO of ARK Invest, Wood sat down with author, and commentator Daniel Lacalle to discuss the Fed’s response to the pandemic and its implications for the economy and financial markets.
Lacalle argues that the Fed’s policies are creating an artificial sense of stability in the financial markets, as investors have become accustomed to a constant flow of liquidity and easy credit. But he believes that this illusion of stability will ultimately be shattered, as the economy and financial markets begin to feel the long-term effects of the pandemic.
He also points out that the Fed’s low-interest-rate policies are causing massive distortions in the economy, leading to misallocations of resources and artificially inflating asset prices. As a result, he believes that the economy is more vulnerable to a correction or recession than many investors realize.
Wood, on the other hand, is more optimistic about the Fed’s response to the pandemic, noting that the central bank has been able to prevent a full-blown financial crisis and support economic growth. She notes that the Fed’s policies have been necessary to prevent widespread business closures and job losses and that the benefits of these interventions outweigh the risks.
In the end, the question of whether the Fed is listening is a complex one. While some argue that the central bank is fueling market distortions and inflation, others contend that its policies are necessary to support a fragile economy. As the pandemic continues to evolve, it remains to be seen whether the Fed’s interventions will be enough to keep the US economy afloat or if we will see a painful reckoning in the months and years ahead.
Thanks you for sharing your thoughtful content for putting it out there with the passion that many of us need and strive for. I'm starting to listen to you almost every morning. Your voice and words are calming, clarifying, uplifting and motivating. It feels real and genuine. I am grateful to have your channels as a source for having a better relationship with myself and the world around me?
Are you joking? This is not a systemic problem!? You have ZERO idea what is going to happen. This is a completely different monster which can in fact be systemic. Sheesus.
Thank you Cathie! I so appreciate your insights and clarity. Bless you.
If you wanna be successful, you must take responsibility for your emotions, not place the blame on others. In addition to making you feel more guilty about your faults, pointing the finger at others will only serve to increase your sense of personal accountability. There's always a risk in every investment, yet people still invest and succeed. You must look outward if you wanna be successful in life…
I love you Cathie and I hope to meet you one day in person. Until then keep doing your thang!! See you soon
Bitcoin/ETH gets stress-tested all the time and always bounces back. Maybe people are finally starting to see that.
Do you interest rates will go down?
Deficits have consequences as well.
Thank you Ark team for all
Have you seen what tax cuts have done too the US? They do not work for mist of the population. People sleeping in the streets, uninsured heath care, cut back on food subsidies, corporate welfare, student debt, and a lack of public education. Maybe Mr. Biden i s looking at fixing some of these issues.
Young Cathie Wood was a cutie lol
Taxes have an impact on poor people who have no power to bargin for wages.
Sold arkg at 90: now at 28. Arkk at 150, now 36. If you bet on any of cathie woods ETFs you would have lost almost all of your money and would have added years to your retirement date. Try naming any funds that have lost that much.
Even with all the bailouts in the world cathie woods would lose money
Thank you!! Love you and your team. You are great. I don’t know what to think about ROKU right now but gosh.
If Ark was not stucked with only innovation stocks, their ETFs would be worth so much more. Cathie Wood is a great economist, but she is now glued to a sector of the market. If she applied her knowledge to other sectors’ businesses, Cathie could skyrocket her etfs.
This woman is underrated, sold high and buying low. Fools were laughing then
Hello there… I love this woman.
Failure at SVB is a mismanagement of risk, not the error by FED. "Error by FED" has been Ark's hope for last year,
I appreciate these. Thank you so much!
Humans are corrupt by nature, thats why banks fail all of the time, this is why bitcoin is great- transparent blockchain.
"…across the board." Are you kidding??? All the taxes you mentioned are on the rich, which is about time and supported by the people. Everyone wants to reduce the budget but never by reducing government or taxing the rich? What planet do you come from?? Of course little chance for any of these to go through, unfortunately.
Lol cathy
Thank you Cathie Wood!!!
Cathie I'ma keep it real I feel a little betrayed by you and Ark, it is ultimately my own responsibility but I don't feel you respected or did enough to protect retails investments with your funds.
Tbh those tax increases all sound pretty good.
Very helpful if you include the mark for each chapter.
Love me some Cathie. My words don't matter, but I'm a fan. It's rough going for the market, and even rougher for the sector in question. I'm right there with you Cathie! Thanks!
Last parts crypto “ which is scam” non of gov. ll backed on that one.
Cathie wood is a psychopathic monster. She’s going to bankrupt millions.
This doesnt have anything to do with the fed. Rates should be high. In fact theyre not high enough yet.
SVB collapse was the result of a large"ish" bank completely failing to manage interest rate risk. Any bond portfolio manager worth a shit would hedge that. SVB didnt. And they didnt want regulatory oversight into their finances. Tells you pretty much all you need to know. Neglectful practices backfired.
The only inflation the FED wants to decrease is wage inflation. This seems to be Biden's target as well as he proposes $886,000,000,000.00 for the defense budget. Any social programs will never pass a vote in Congress. The system is rigged and totally corrupt. Who are the folks who will profit from a depression? It is time to eat those folks.
Ha ha ha ha ha ha that ks Cathy for telling people this ha ha ha ha some wanna blame cryptocurrency for this debacle but real people know that this debacle started before the year 1990
forgot about Nevada 🙂
All these created by Biden and fad
Not advice; not a fiduciary; not your daddy. Technical charts indicate a cross back down below the 200SMA, breaking the rising trend line and testing the .50 fib on the SPY – somehow the charts always know. This would be a very good time for Cathie to have created a hedge for her ETF's that can take advantage of the short runs to bolster return. Fundamentally investing in startups is a 1 in 10 exponential return – 90% are going to smell like shrimp left in an ashtray for weeks. You have to be able to run them down for consistent returns. PM me Cathie. I would love to do it for you.
Yeesh Cathie. You drop Art's name on every video. If he had never thought up the Laffer Curve as a way to concentrate wealth for the wealthy we wouldn't be in this mess. As for the taxes – they have as much honesty as a sales clerk saying you look thin in that dress at Nordstrom. This government is a tangled train wreck for two years while the monkeys throw poop at each other. As for the banks and the contagion – you can smell the fear in every person this weekend that has said "We don't expect this to spread" Like they are looking at a match thrown on a pool of gasoline. Every bank has been tilting the stress tests by moving assets to hold to maturity while interest rates and collapsing mortgages are drying up their liquidity. One mild bank run and the whole train wrecks. Gauranteed. Hold on to your cash. Time to short again.
I N N O V A T I O N
Sad that you don't see this is as the Great Reset plan. The pandemic showed WEF that could produce the fear they wanted over the globe. Now they're going for our money. Liz Warren is dancing on the grave of the lesser banks so that her Big Four bankster buddies can feast on the remains. Once they have us panicked (again), they can force us into FedNow/CBDC and don't even have to print fake fiat again. Hope that crypto is the savior it was created for.
Thank you Cathie for explaining the SVB situation. Always appreciate your input.
Cathie. With ALL the respect. It is clear inflation is not solved. Fed Will need to keep going high. Not time for long term cash flow promises stocks. This is obvius.
"March comes in like a lion, and goes out like a lamb…"
Still a -50% left to ARKK from last feb high