We touch on several bases in today’s letter that are not entirely related. We begin with the 800-pound gorilla in the room – the fact that the US national debt topped $20 trillion last week.
The United States is increasingly being provoked toward a war with North Korea by its seemingly insane young leader Kim Jong-un. Not only has Jong-un acquired nuclear bomb capabilities much faster than US intelligence sources had estimated for years, he has also recently developed intercontinental ballistic missiles (ICBMs) capable of reaching US soil.
For most of this year, I’ve had a sense that the American middle class is increasingly growing, and that wages/incomes are increasing more than the Labor Department reports. I have been saving articles upon articles on this subject and was planning to extract the highlights and summarize them for you in the next week or two in these pages.
The Fed remains committed to raising short-term interest rates at least one more time this year, most likely at the September policy meeting as I will discuss below. The Fed also wants to start reducing its massive $4.5 trillion balance sheet this year, but doing so in the past has almost always led to a recession.
On July 12, credit card giant VISA announced that it will soon offer selected retailers $10,000 to stop accepting cash. No one seemed to pay much attention. The announcement received relatively little coverage in the press. Should it have? Yes!
Nearly one-fifth (19%) of Americans age 70 to 74 were still in the workforce as of the end of June, according to the latest jobs report from the Labor Department on July 7. Some are working because they are healthy and enjoy their work. Most, however, are still working because they haven’t saved nearly enough for retirement.
Both the Congressional Budget Office and the White House Office of Management and Budget announced last week that federal spending will top $4 trillion for the first time ever in fiscal 2017, which began on October 1, 2016 and ends on September 30.
The US Department of Labor told us in June that there were apprx. 6.0 million open (unfilled) jobs in America, a record high. The Labor Department also told us that there are apprx. 6.8 million unemployed Americans who are actively looking for work.
As the father of two Millennials (ages 27 and 25), I pay a great deal of attention to articles and studies on this largest generation of 75.4 million Americans. Given the sheer size of this generation and its vast effect on the economy for decades to come, we should all be paying attention to trends within this massive group.
Most investors understand the implications of the Fed raising (or lowering) interest rates. After lowering short-term interest rates to near zero in late 2008, and keeping them there for eight years, the Fed is now committed to “normalizing” short-term rates by raising the key Fed Funds rate multiple times over the next couple of years.