CURRENT ECONOMIC ANALYSIS: STRATEGIES FOR SUCCESS IN 2018
TOPICS TO BE COVERED
•What are the effects of Trump’s policies on your retirement portfolio?
•The Debt Explosion
•Comparison of the best performing asset classes since 2000.
HOW WILL TRUMP BRING JOBS BACK TO AMERICA?
EXPLAINING A STRONG DOLLAR VS. A WEAK DOLLAR
America has had a strong dollar since the Clinton administration
•Foreign countries buying American goods will pay a higher price
•Imports to America are cheaper
•70% of everything American’s consume is imported—so we see deflation in prices (Our dollar buys more)
•The inverse is also true---American good are more expensive overseas.
CHOICES HAVE CONSEQUENCES
With a strong U.S. Dollar, American jobs will go overseas as they will follow manufacturing and go to the producing countries of the world.
HERE’S THE REALITY
•The inverse is also true---American goods are MORE expensive overseas
•As we IMPORT cheaper stuff we EXPORT jobs.
A GLOBALIST AGENDA OR A CONSUMER FOCUS?
A strong dollar is one way to boost the rest of the world while bringing America down.
Because we purchase more foreign goods
When we do that we export jobs to other countries to build all the stuff we are buying.
A CLASH OF WORLDVIEWS
The Trump administration represents a paradigm shift in U.S. Dollar policy that has dominated US policy since the Clinton administration.
THE SWINGING PENDULUM
Trump wants to MAKE AMERICA GREAT AGAIN.
How does he want to accomplish this?
•Bring JOBS back to America
•He doesn’t want Americans or ANYONE for that matter buying Chinese, Indian, Mexican or European goods. He wants EVERYONE to buy American.
A CLASH OF WORLDVIEWS
To bring jobs back to America he needs to get the rest of the world buying our stuff.
Through a WEAK DOLLAR policy!
•Then imports will be more expensive and,
•Exports will be cheaper!
A WEAK DOLLAR BRINGS INFLATION
HOW DO POLICY MAKERS SLOW DOWN INFLATION?
By raising interest rates
If the cost of borrowing goes up with higher interest rates, people will borrow less and thus spend less.
CAN A PRESIDENT CHANGE ALL OF THIS?
Of course! Because past Presidential administrations caused this mess, present and future Presidential administrations can fix it—IF they are willing, as the fix will be painful.
SO AGAIN. . .HOW DO POLICY MAKERS SLOW DOWN INFLATION?
•By raising interest rates to slow down borrowing.
•When rates are higher and people are handcuffed by debt, they slow down their spending as their debt service increases.
•When they slow down their spending, businesses get hurt, stock valuations come down, people get laid off.So, the exact policy that will bring jobs back to America, create economic growth, and make America great again will create a symptomatic effect of cooling down the economy that it just heated up.UNLESS. . . People get out of debt!
WHAT COMES WITH A WEAK DOLLAR?
So, the exact policy that will bring jobs back to America, create economic growth, and make America great again will create a symptomatic effect of cooling down the economy that it just heated up.
People get out of debt!
WELFARE HAS BECOME A LIFESTYLE RATHER THAN A TEMPORARY SOLUTION
ANALYZING THE U.S. FEDERAL BUDGET
DEBT SERVICE ON THE NATIONAL DEBT
With rates under 2.0% we are paying $318B a year in INTEREST on the national debt.
The national debt keeps increasing, BUT EVEN IF IT STAYED THE SAME look what happens:
4% = $636B
6% = $950B
8% = $1.27T
15% = $2.38T (1983 LEVELS)
HOW DO DIFFERENT INVESTMENT CLASSES RESPOND TO A WEAK DOLLAR?
•BONDS: They will come down in value as interest rates go up. Get out now!
•REAL ESTATE: Short term UP. Medium and long term will come down.
•GOLD AND SILVER: Will go up as tangible assets will go up with the inflationary pressures. Additionally, gold and silver act as a safe haven investment when other assets are crumbling.
•STOCKS: Short term UP! Medium and long term will come down.
A YEARLY LOOK AT THE DATA FROM THIS RESEARCH
INVESTMENT RETURNS THIS CENTURY
As these trends continue, expect to see much higher prices in tangible assets and more losses in stock, bonds, real estate and CDs. This should continue UNTIL the fundamentals of the markets change, signaling a shift in the trends.
The choice all of the sudden seems easy when we sift through all of the disinformation, and try to deprogram ourselves from what we THOUGHT were safe investments our whole lives.THERE IS NO SUCH THING AS A BAD INVESTMENT, THERE IS JUST BAD TIMING FOR INVESTMENTS!