Tariffs

“Can you say:  Balanced budget?  Imagine what that would do for the U.S. economy and markets.”

Bulletin /

Optimism is rising: The U.S. economy and markets are going to continue to improve because Trump’s pro-growth, America-First administrative agenda – which will include tax cuts, deregulation, decreased trade deficits, and, most importantly, reduced government spending – promises to be extremely effective. Investors know it. Confidence has skyrocketed among corporate executives, small businesses, households, students, and… even farmers.

“Can you say:  Balanced budget?  Imagine what that would do for the U.S. economy and markets.” Read More »

Perry Capital is very optimistic about the U.S. Economy & Markets. That includes stocks, bonds, and the Dollar. You should be, too.

Bulletin /

The promise of a smaller government is what won the election. Reckless government spending, rising deficits, and rising debt levels were inevitably followed by price increases. This is why the new administration’s conservative government agenda was voted into power. It’s always about economics.

Perry Capital is very optimistic about the U.S. Economy & Markets. That includes stocks, bonds, and the Dollar. You should be, too. Read More »

The Democratic Party lost the election because of deteriorating economic conditions.

Bulletin /

Voters understood that the previous administration’s policies were slowing growth and inflating the economy. They knew their personal economic prospects were deteriorating and that increased indebtedness, aggressive government spending, and the money printed to pay for it were the cause of their livelihoods’ destruction. They also knew that another four years of the same policies would inevitably result in higher taxation.

The Democratic Party lost the election because of deteriorating economic conditions. Read More »

“Grub first, then ethics.”

Newsletter /

The Democratic Party lost the election because of deteriorating economic conditions. The majority of voters are not better off than they were four years ago.
The electorate understood that policies implemented by the previous administration were slowing growth and inflating the economy. Voters knew their personal economic prospects were deteriorating and that increased indebtedness, aggressive government spending, and the money printed to pay for it were the cause of their livelihoods’ destruction. They also knew that another four years of the same policies would inevitably result in higher taxation.

“Grub first, then ethics.” Read More »

“You cannot escape the responsibility of tomorrow by evading it today.”

Newsletter /

The economy continues to expand and consistently exceed expectations across most data series. Yet confidence surveys continue to languish well below pre-pandemic levels; at the same time, investor bullishness has rarely been higher. This is unusual and should reconcile itself to some consistency. I would expect confidence to rise. Yet truthfully, it is fiscal dominance –¬ more so than monetary dominance ¬– that is the more significant issue. The debt ceiling is currently suspended. In January 2025, however, it will automatically come back into effect. This means that the U.S. Treasury will not be able to issue more debt until Congress raises or suspends the ceiling again. However, they still have spending obligations and are running structural deficits due to the policies Congress has implemented for decades. Thus, government spending could potentially be forced downward – depending on whether conservatives or liberals control Congress. If that happens, it would be a net positive for the economy.

“You cannot escape the responsibility of tomorrow by evading it today.” Read More »

“In the annual public surveys about trust and reputation, journalists and the media have regularly fallen near the very bottom, often just above Congress.”

Newsletter /

The economy continues to expand and consistently exceed expectations across most data series. Yet confidence surveys continue to languish well below pre-pandemic levels; at the same time, investor bullishness has rarely been higher. This is unusual and should reconcile itself to some consistency. I would expect confidence to rise. Yet truthfully, it is fiscal dominance –¬ more so than monetary dominance ¬– that is the more significant issue. The debt ceiling is currently suspended. In January 2025, however, it will automatically come back into effect. This means that the U.S. Treasury will not be able to issue more debt until Congress raises or suspends the ceiling again. However, they still have spending obligations and are running structural deficits due to the policies Congress has implemented for decades. Thus, government spending could potentially be forced downward – depending on whether conservatives or liberals control Congress. If that happens, it would be a net positive for the economy.

“In the annual public surveys about trust and reputation, journalists and the media have regularly fallen near the very bottom, often just above Congress.” Read More »

“Prejudice is a great time saver. You can form opinions without having to get the facts.”

Newsletter /

All three key US equity indices made all-time new highs for the week on the notion that economic data was softer. We saw:
1. A slowdown in housing activity. (Existing home sales were down -1.9 %, and New Home Sales were down -4.7%, albeit from near-record high levels.)
2. Languishing consumer sentiment surveys (which were at 100 pre-pandemic and bottoming at 50 in 2022) have slipped from 80 in Q1/24 and are down to around 68-69.)
3. Slightly lower inflation expectations (1 year from now nudged lower to 3.3%.)
4. But, most interesting is a notable pick-up in U.S. service activity (the PMI services survey jumped to 54.8 from 51.3), which is where the bulk of the inflationary pressure is causing the greatest damage to households and businesses.

“Prejudice is a great time saver. You can form opinions without having to get the facts.” Read More »

“Any great power that spends more on debt service than on defense will not stay great for long.”

Newsletter /

Investors pushed U.S. Equities to all-time highs last week. This is an extraordinary momentum rally that appears to be attracting increasing amounts of investor capital in a sign that the economy can keep its momentum up to, and perhaps beyond, the election. This is a logical assumption based on the realization that the U.S. government is addicted to spending (there is no mention of cutting it by either party.) The rising cost of debt service seems almost an afterthought, and if the debt burden gets high enough to slow the economy, the Fed will increase stimulus. Higher bond yields do not appear to be part of any in-depth analysis. Except mine.

“Any great power that spends more on debt service than on defense will not stay great for long.” Read More »