Incredible!
1. The dollar is very strong. The world is scared and is buying dollars. This is good news for us.
2. The global economy is sliding.
3. Financial risk is rising.
4. Commodities (including gold and crude oil) are declining because of weaker global demand.
5. Inflation is declining.
6. Interest rates of high-grade borrowers are stable to lower.
7. Equities are sinking.
8. Equities have gone nowhere since 1998.
9. Fear has reached extreme levels.
10. The world is not ending (I am pretty sure about this).
Bottom line. The markets work. Social engineering created the housing bubble by convincing us that everyone should own a home. Lending standards had to be relaxed to make it possible. Regulators looked the other way. It could not work. And it did not.
Now the markets are forcing the government to become the landlord of last resort and our banker and our retirement financier and our medical insurer. There is a huge transfer of power and wealth taking place from us to Washington.
This is a major historic change for our country. We are creating a new class of citizens -- the bureaucrats who will be empowered to regulate, regulate, and then regulate. Countries going this route have shown much lower growth rates in business activity. Is it going to happen to us too? Are the markets discounting this shift of power?
More, much more when you subscribe to The Peter Dag Portfolio by going to https://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
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