The Earth is Not a RulerSubmitted by RetireWiseCFP on October 12th, 2021
The Earth is Not a Ruler. It is a Curve. Years ago, after I truly assimilated this, the world opened up for me. The wisdom and effectiveness of my strategic advice and the quality of my investment decisions became world class.
Where are we now?
It’s the Economy, Stupid, Part Deux is upon us. The economy is running hot with inflation that has been in check since President Carter. The new administration seems hell-bent on forgetting their #1 job—to take care of the economy. Both sides seem to have forgotten this basic bargain between the American people and Washington, D.C. They passed bills that paid people not to work, and now everyone is shocked, shocked that companies cannot find workers. And when they do, they have to pay a lot more than they had budgeted. Because higher input cost is experienced at the base of the economy, we get inflation.
Where do we go from here?
The economy is sound, people are returning to work, and there seem to be plenty of job opportunities at higher pay. Now is the not the time for the government to mess this up by spending excessively or shutting down. As I wrote in my last letter, conditions are ripe for another paradigm shift in this country, Green Economy is poised to be the core economy of the future globally. It is the opportunity of the next decade.
On fixed income and alternatives:
Unfortunately, it seems the knife is out for the Sheriff. The Chairman of the Federal Reserve System, Jerome Powell, seems to have no friends. President Trump, who nominated him, was in a bloody battle to disgrace him so he, Mr. Trump, could win the election. A few days ago, Senator Elizabeth Warren attacked him with a vicious, personal Trump-like blow. This is precisely the Washington, D.C. body blow that most people never recover from.
In my last letter, I wrote "…. I have concluded that Bitcoin is here to stay…—ransomware hackers, North Korea, etc.—use it as their currency of choice. Bitcoin's lack of transparency scares governments." Various financial intermediaries are working on a variety of vehicles that may (I repeat may) make Bitcoin and other cryptos investible for fiduciaries like me. Stay tuned. My father taught me, "Tell the world what you are going to do, but first do it."
A lot of the positive actions that could define the new administration are stalling. I am NOT about to call a strikeout because I know the world is not a ruler: success or failure is not a straight line. Success may be just around the curve. The compromise that will promote the NEXT BIG economic locomotive for this country—infrastructure; clean energy as a business, not a fad; autonomous driving; an economy fully open after COVID; etc.—is just around the corner. Dear friends, you know me: I believe in America, and I think only fools bet against America. I bet our most significant opportunity as investors is just around the curve.