- Yesterday is already a dream, and tomorrow is only a vision; but today, well lived, makes every yesterday a dream of happiness and every tomorrow a vision of hope.
- from the Sanskrit
Every once in awhile we reach a unique point in data. We are at one of those moments. The end of this month will also be the end of the year and decade for our economy and stock market. Think back to 2010? We were getting out of the recession, but no one ever talks about the cost. Keynesian influence in government policy is almost taken for granted. It is now the playbook. When your economy slows, the government provides stimulus to take up the slack. However, we at Evolution remind you that accumulative debt is its own problem. The theory does not explain how the debt is to be repaid. Economist say that we are entering the longest sustained economy and yet, our debt never gets repaid or lowered? This is unsustainable. There are signs everywhere, but our so-called leaders always wait until the crisis is at hand to counter the effects. They are not leaders or good Americans. Their ego to maintain power will be demonstrated as they add personal projects to any bill that is slated for in this example, debt crisis.
Back in 2014 Sebastian correctly predicted our national debt would soon pass $20 trillion. When Trump won the election in 2016, Sebastian said our debt would hit $25 trillion by the end of his term. This bold call is on track. People get use to seeing certain numbers expressed in billions and now, in trillions that they take this data as something that is normal. It is not!
If you are late with your credit card payment, you get hit with fees and a possible rate increase as you become a credit risk. If 90-days pass with no car payment, the repo man will confiscate your vehicle. Debt has consequences. Our nation has been blessed by having our currency being the world's reserve money. We have abused this credit. Many in the world are seeking to end our reign as the world's principal currency. China's ego wants this position. They have enacted many policies to achieve this position. For example, the most important commodity is oil. China will pay you in gold rather than the only other accepted denomination, the dollar. Nations buy US dollars just have to money to transact an oil exchange. This is changing. The US Federal Reserve has kept the lid on this possible problem by buying US Treasuries. This process has acted as a buffer to the dollar. However, if our interest rates continue to fall, other currencies will rise as the gap between the dollar and their currency closes. Keep an eye on the exchange rates in 2020. Our debt will be our biggest problem some day soon.
Stock Market
It is at record highs, however the evaluations are at highs too. The market expected some kind of truce with China over the tariff tensions. It did not receive a deal, but it has acted as if it did. This "phase one" solution is only buying time. JFL predicted that if Trumps wins reelection, the whole tariff situation will return with no talks as the real reasons for the tariffs, theft of intellectual property, Chinese tariffs and barriers to trade will be points that China will not change their position. This is why they passed the "352" act. This states that China will only use Chinese products after five years. In addition, the new NAFTA deal will begin to show its colors. The only info on it at the moment is that there will be no tariffs on the internet by any of the three countries. The rest of the deal will not stop our outsourcing. The US needs to protect our workers. We need more tariffs, not less. Finally, by the end of January the UK will leave the EU. I'll believe it when I see it. If it happens, you can expect a sharp rise in gold and market corrections around the world.
Crazy Stats
The Fed had to recently inject $365 billion into the overnight market to keep short rates from rising. I believe something else is lurking under the cover of night and shady book keeping.
800 trucking companies failed in the US in 2019. This is a record that broke the record of 2018. If the economy is doing so well, how can this be? If oil prices have been stable, what happens if they spike again?
60% of CFOs say that they see unemployment rising in 2020 along with inflation. I read this as more outsourcing and more lies about inflation from the Fed and government.
77% of all Christmas gifts will end up as returns! This translates into $95 billion. This is not a healthy sign.
In housing renting will still dominate. The occupancy rate for renting single family homes is 96%. There are over 100 million renters. This is 36% of all households.
The sad state of US trade. We lost another $50 billion in October and this is considered a good month in trade. We lose in dollars one-half trillion each year in trade and our so-called leaders just play, "The beat goes on..."
9300 stores closed in the US in 2019. This is a sad record, but hides real unemployment and debt repayment by these retail outlets.
Census Bureau says 38 million in the US are in poverty. 44% of US workers are low-wage earners.
68 million receive social security checks each month which is larger than the populations of France, Italy, UK, and Canada. This is all negative for our economy.
2020: Year for lawyers
California is the world's fifth leading economy and I predict it goes downhill from here. They just passed "AB-5" act. This law states that certain jobs will no longer be classified as self-employment. Companies like Uber, Lyft and others will have to pay salaries to all help. Workers don't realize that this is good for them. They get no social security credit as self-employment. They are fighting this act, but the only winners will be the lawyers. Lawyers have other opportunities all across the nation. California also passed the privacy act for the internet. The big players oppose and lawyers will win again. The law says even if the company is based in another state as long as one customer is in California, it had better declare what it does with your data. Fines are coming. Lawyers win again! By the way, many other states are looking to follow California's lead.
Finally,
Coke had an "Aha!" moment. Their new product in 2020 is Selzer water. I think it will be a hit.
If that doesn't touch your senses, how about this: HAPPY NEW YEAR - Let's give peace a chance!
