Investing Education
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Understanding the U.S. debt and liquidity crunch
Roger Montgomery
June 25, 2026
A layman’s guide to CrossBorder Capital’s latest financial outlook.
The core problem: A tsunami of government debt
Macroeconomic research house CrossBorder Capital’s Michael Howell recently summarised the dilemma confronting the U.S. Federal Reserve under newly appointed Chair Kevin Warsh.
For most, the use of proprietary indicators and the esoteric interpretations is likely to be skimmed over, but sometimes a bit of additional attention pays dividends. Right now might be one of those junctures.
The U.S. government funds its budget shortfalls by issuing bonds – essentially IOUs to investors. To keep this system running smoothly, two things are required: balance-sheet capacity (the financial ability of large institutions to buy and hold these bonds) and market liquidity (the amount of readily available cash circulating to trade them). continue…
by Roger Montgomery Posted in Economics, Editor's Pick, Insightful Insights, Investing Education.
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MEDIA
ABC Newcastle Mornings – From Budget Tips to AI Risks
Roger Montgomery
June 24, 2026
I recently joined ABC Newcastle Mornings with Kylie Morris to discuss why households may benefit from reviewing their spending habits, including a simple exercise of separating expenses into “wants” and “needs” to identify potential savings and build a financial buffer.
We also explored how interest rates can act like gravity on asset prices, with higher rates reducing the present value of future cash flows – potentially weighing on shares and other investments.
Finally, we touched on the implications of the artificial intelligence (AI) boom for investors and superannuation (with specific reference to the recent SpaceX IPO), including concerns around supply chain fragility, resource consumption and the growing integration of AI into critical systems.Tune in from 37:30 here: ABC Newcastle Mornings continue…
by Roger Montgomery Posted in Consumer discretionary, Economics, Investing Education, Market commentary, Radio.
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Navigating the new tax landscape – The shift from capital growth to income yield and the case for private credit
Roger Montgomery
June 22, 2026
The Federal Labor Government’s 2026-27 Budget tax reform package represents the most sweeping overhaul of Australia’s investment tax landscape in nearly three decades. By winding back the traditional pillars of wealth creation – specifically the 50 per cent Capital Gains Tax (CGT) discount and negative gearing on established residential property – the government has fundamentally altered the math of investing.
While today’s major policy concessions (including exemptions for testamentary trusts and a step back from sweeping ministerial discretionary powers) provide some targeted relief, the core framework remains intact.
The clear takeaway for investors is a systemic structural shift: the traditional focus on heavily leveraged capital growth has been severely compromised, making high-yielding income generation far more appealing. continue…
by Roger Montgomery Posted in Aura Group, Economics, Editor's Pick, Feature Article, Insightful Insights, Investing Education, Popular, Property.
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What could a crash look like?
Roger Montgomery
June 12, 2026
The defining irony of today’s stock market has got to be the yawning chasm between asset prices and their intrinsic values. As equity indices scale ever higher peaks, and as hyper-parabolic Price-to-Earnings (P/E) and Price-to-Sales (P/S) ratios are normalised, the underlying truths don’t seem to have changed. Eventually even this bubble must bust.
U.S.-based senior economist at the Centre for Economic and Policy Research (CEPR) in Washington, DC, and author of the ‘AI Bubble Monitor’, and U.S.-based antitrust and policy analyst Matt Stoller reckon this dynamic can be attributed to something Stoller calls the “Number Go Up Rule”– a systematic rewiring of institutional incentives to ensure corporate valuations ascend at all costs, and frequently favouring speculative mania over fundamentally productive or socially additive enterprises. continue…
by Roger Montgomery Posted in Economics, Editor's Pick, Global markets, Insightful Insights, Investing Education, Market commentary, Popular.
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MEDIA
The Australian – AI optimists face a reality check as surging bond yields signal market trouble
Roger Montgomery
June 3, 2026
Bullish investors believe AI is a new, infinite fourth factor of a nation’s production and wealth creation. In the past, we had labour, capital and land as production inputs, all of which were, of course, finite. Land provided the raw materials, labour the muscle and the mind to transform them, and capital was the tool.
Enter AI. The transformative aspect of this fourth ingredient is that, unlike the physical limitations of land or the finite hours of the human workforce, data is a resource that is functionally unlimited. And, importantly, it’s the only factor of production that actually grows more abundant the more we use it.
continue…
This article was first published in The Australian on 27 May 2026.by Roger Montgomery Posted in Editor's Pick, Global markets, In the Press, Insightful Insights, Investing Education, Market commentary, Market Valuation, Popular, Technology & Telecommunications.
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WHITEPAPER
THE PROPERTY RUG PULL
Discover how proposed changes to negative gearing, Capital Gains Tax and holiday home tax rules could reshape property investing, and why investors may consider private credit as property returns become less certain and tax advantages diminish.
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Same data, different conclusions – Inflation commentary 28 May 2026
Roger Montgomery
May 28, 2026
Inflation seems to be the topic du joúr. Perhaps surprisingly, however, is the variety of opinions, even on the same day.
Economists, strategists and analysts don’t seem to be able to agree on anything regarding inflation (except for the current number), even on the same day (in this case, today the 28th of May 2026) – even when presented with the same data.Here is just a small selection of comments about inflation that arrived in my inbox this morning, and as you will see, facts are open to interpretation. continue…
by Roger Montgomery Posted in Economics, Insightful Insights, Investing Education, Market commentary.
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MEDIA
Ausbiz – Global equities may be closer to a peak than many investors expect
Roger Montgomery
May 28, 2026
I joined Juliette Saly on Ausbiz today to discuss why global equity markets may be closer to a peak than many investors expect. We explored the historical link between oil-price spikes and weaker share markets, why even strong artificial intelligence (AI) –driven earnings growth may not protect valuations in a higher-rate environment, and how the excitement surrounding SpaceX is pushing many listed “proxy” space stocks into hyper-exponential territory untethered from fundamentals.
You can watch via Ausbiz here: Global equities may be closer to a peak than many investors expectby Roger Montgomery Posted in Investing Education, Market commentary, Market Valuation, Technology & Telecommunications, TV Appearances.
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The AI bubble debate – Lessons from the Dotcom boom
Roger Montgomery
May 28, 2026
In this week’s video insight, I explore the growing debate around whether AI stocks are in a bubble by revisiting a strikingly familiar research note published during the DotCom era in 1999. At the time, investors were told there were “good reasons to pay through the nose” for leading technology stocks because their growth and disruptive potential made “this time different.” Drawing on my own experience working through the DotCom bubble, I reflect on how speculative excess can continue far longer than expected before eventually unwinding, often with devastating consequences for investors. While today’s artificial intelligence (AI) leaders may have strong fundamentals, history reminds us that every bubble comes with a compelling narrative that sounds convincing in the moment. continue…
by Roger Montgomery Posted in Economics, Investing Education, Market commentary, Video Insights.
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Consumer confidence hits a record low (while the NASDAQ Index hits a record high)
David Buckland
May 27, 2026
Australia and the United States (U.S.) currently have one thing in common.
Consumer confidence is in a world of pain.
In the U.S., the Consumer Sentiment Index (CSI) has fallen to the lowest level ever recorded since the University of Michigan began tracking the data in 1952.
The Index, see Graph 1. and Table 1. below, hit 44.8 in May 2026, as Americans fear inflation, rising fuel costs, economic instability associated with the Iran War and the worry artificial intelligence (AI) will take white collar jobs.
When I look at the U.S. inflation rate – which was 3.8 per cent for the year to April 2026 – and the U.S. Federal Funds Rate at 3.75 per cent, I again point out a significant anomaly. continue…
by David Buckland Posted in Economics, Global markets, Insightful Insights, Investing Education, Market commentary.
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The hidden cracks beneath the rally – we can only know that which can be measured
Roger Montgomery
May 25, 2026
On December 11, 1974, influential Austrian-born British economist and philosopher, Friedrich von Hayek, best known as a champion of free-market capitalism and classical liberalism, and a fierce critic of socialism and state intervention, delivered “The Pretence of Knowledge” as his Nobel Memorial Lecture. It was later published as an essay and remains one of his most famous critiques of central planning and hubris in economics. continue…
by Roger Montgomery Posted in Economics, Global markets, Insightful Insights, Investing Education, Market commentary.
There’s a battle playing out right now between Wall Street’s most bullish artificial intelligence (AI) optimists and the bond market traders quietly sounding the alarm. The outcome of that contest will matter enormously to investors with skin in the game.