Digging Deeper …
by Justin Angell
I’m beginning to believe the greatest threat to the American people and the American way of life is not an enemy either foreign or domestic. I believe the screen time that disseminates disinformation, encourages discontent and generally perpetuates ignorance all boils down to “the algorithms”.
Keeping this in mind, I wanted to talk about and explain the cracks developing in both the American and global economies that I believe may soon affect us all. Unfortunately, as I tried to research, I was bombarded by reams of economic information that supported what I was researching that basically shoved me into an echo chamber. The algorithms sent me information and opinions, then sent me more information to substantiate and corroborate.
Saving time, I’m not going into the detail of what I have sourced, instead I’m going right to the summary.
The world’s financial system with the dollar as the base currency is starting to show cracks and weaknesses resulting from the rampant governments world-wide overspending for decades. The 40 trillion dollars of debt admitted by the United States government doesn’t include unfunded pensions and all future obligations, including social security, military and government pensions etc.
Do you have a pension? Is it funded? Do you have a 401k? Is it invested into the insanely over-priced data center and hyper scalers? If you read this and don’t know where your retirement investments and savings are, you probably need to find out.
Bond markets in the USA and globally are having to absorb fewer buyers, especially for American treasuries.
For decades, the Japanese savers have provided a source of zero interest money (known as the yen carry trade) to stock market investors, sovereign wealth funds, growth companies, etc… But, that gravy train is coming to an end, and with it I am afraid eventually so will the historically cheap interest rates we have enjoyed for decades.
Do you have fixed interest rates?
All this is terrible timing for the treasury and the FED, who is faced with rolling over and refinancing trillions of dollars worth of government debt accumulated over several decades. The bond market is the key, as the bond market goes, so will the rest of the economy.
According to my algorithm’s information, over the next few years, interest will be pushed higher as private companies compete for financing with over-extended governments. In an effort to pay obligations, governments will print increasingly more money, diluting the value of our currencies even more. Inflation is nearly inevitable.
Solid unprintable assets like land, precious metals (maybe Bitcoin, maybe commodities like oil and cattle) should all hold value. We see these investments and everyday expenses today and say “everything is so high”, but what we’re actually seeing in real time is the slow erosion of the value of the money.
Maybe bred cows are actually cheap?
I don’t ever want to be the Debbie downer, Kelly killjoy or the fun sponge, but I also believe we as individuals have time to influence the trajectory of our family’s futures. Many of you, especially young people reading this may be tempted to scoff because you’ve never seen a bad day or a bad year or bad decade. The term “recency bias” is the tendency to overemphasize the importance or recent experiences among other things.
In this case, we basically believe that since it’s never been bad. it’s never going to be bad.
Again, I don’t want to be an alarmist, but I also don’t want to be the guy that knew something, but didn’t say anything.
Take this for what it’s worth — my conscience is now clear.
The good news is even though inevitably there will be some type of financial reset, we should all make it through to the other side.
Today, even though the cattle market is lower, it’s still historically very high. The cow calf man is in the driver seat and should be safe for years, especially if depreciating assets are paid for. Always remember…. we live in the best place in the world at the best time in history.
If this has been thought-provoking, but too superficial, give me a call: If you have complaints, give Jon a call.
Here’s to your success!