- "Government is not the solution. Government is the problem."
- Ronald Reagan
- "Doing the same thing over and over again and seeking a new outcome is insanity."
- Albert Einstein
This is where we are in 2021. President Biden believes government and its money, resources and power will solve any crisis, especially economic. The only thing that this thinking has provided is increasing debt, a lower standard of living and a devalued currency. This president is not alone. Every president after FDR has turned to this playbook when the economy turned south. There are two exceptions. President Eisenhower sought to balance the government. His term had a short recession, but the economy recovered on its own. We paid down our debt and the dollar had strong purchasing power. President Kennedy had stable prices in his abbreviated time. He, too, also had a balanced budget in one of his three years. His tax cut plan, enacted by Johnson took the economy to prosperity. One could argue about many other factors during every administration from climate to civil rights, but we are addressing the economy in this part of our work.
Stock Market says...
that the Biden administration is trying to be all things to all things. He won't make any waves. His cabinet reflects this: old cronies and lifelong bureaucrats. There will not be a "breakup" of big technology. Google is leading the charge higher and it is taking the market with it. The market is also saying that China will be our trading partner despite not fulfilling its agreed terms with the deal it signed with President Trump. China will renegotiate. Biden will claim a new, better deal. What he will get is the same old same old policy from China. Albert "E" should have dipped his toe in politics because his comment is "right on!" Of course, I am using it as a reflection to bureaucratic answers for the economy. Big Pharma will ride the virus to record earnings. Big Oil has hit a roadblock, but when prices rise, the restrictions will fade. Small business and large businesses are getting "free" money. Relief checks are coming. Evictions and foreclosures are on pause. No one looks ahead to when this ends or the money is spent? Alternative energy should benefit, but our Congress is a group of puppets. They will tow the party line and both parties are bought and paid for. They are in some unseen, rich assholes pocket. This is why real change is slow. It is not gridlock, but a democracy that does the bidding of the super rich and not the people. Like we said in our last piece, a stimulus economy is not an economic economy.
What we see...
a rude awakening! Our Economic Evangelist wrote that the continual unemployment will soon factor into the markets equation. He said that the holiday hires would be dropped by the end of January. Here are the numbers so far: December 31st. = 787,000 claims; January 6th. = 803,000; January 14th. = 965,000; January 21st. = 900,000 claims. Total = 3,455.000. This is reality! When you combine the labor picture with the pandemic, it gets ugly, fast. Even if we could maintain one million vaccinations per day, it will take a year to cover the nation. Keep in mind that we have not reached this average and now, we have new strains from mutations to worry about along with bottlenecks in production and distribution. Then, there is this. Consider the stock. GameStop (GME)? It was $5 back in September. Rumors of bankruptcy circulated. It closed last Friday at $65.01. It was up 51% for the day. It has 141% shorts. NOTE: On Monday, it rocketed again to $159. Then, BOOM! fell to $78. On Tuesday, it flew up to $147. This is a dangerous market.
Continuing, does Tesla (TSLA) make any money? How about Shopify (SHOP)? How about Bitcoin? Enough said!
Last Agreement...with Russia?
Time is up. The nuclear pact to curtail nuclear proliferation. Biden, in seeking to please all, will try to extend the pact. This is a good thing, but what about North Korea, China, India, Pakistan, Israel and Iran?
Flying Taxi?
It could be coming and soon. A new German startup, Lilium is developing an all-electric transport. It already has two European hubs and Orlando, Florida in the US. They will have competition from Volocopter. This firm is seeking to build an all-electric taxi. Have a good week. Peace.
