A series of continuous policy blunders from a host of characters, even including corporate board rooms are to blame for this U.S. economic debacle. I’ve been writing about impending U.S. economic decline for some time now, it’s not new subject matter. In an unusual situation it’s not been systemic, or organically induced, it was born purely from multiple policy errors! Today, you may find what I have to say about portfolios useful during this very challenging time for investors. Times are tedious, everyone on Wall St. is worried about the impact of runaway inflation on top of supply shocks on top of excessive central bank stimulus programs on top of the double cheese – the largest unnecessary stimulus programs ever to come out of Washington, D.C., on record!; in what appears to be a never-ending stream of drunkenness by the Democrats in power. Why not throw good taxpayer money after bad right? Yea – that really fixes things. LMAO! This host of unsavory characters have built the perfect layered sandwich to be enjoyed and gobbled up whole by inflation; inflation levels we haven’t seen the likes of in this country since Jimmy Carter, another Democrat, a peanut tycoon, was in our highest office. [Jimmy did peanuts before he did politics; notice that once elected anything we received from Jimmy was worth nothing but peanuts. So my advice to Moms out there, don’t let your daughters marry a peanut farmer. They should always go for the guy that grows grapes, walnuts, or almonds – now that’s a righteous gig!]

Runaway inflation and techy growth stocks don’t get along. Their dislike for each other goes way back. See the stock market discounts future earnings using a discount factor that is determined by short-term interest rates plus some inflation expectations. What is then subjected to a discount factor, reducing it into the future, is future corporate earnings. When low interest rates prevail, the discount factor applied is pretty friendly all around. And growth stocks thrive in a cheap-money environment. In fact, they can only thrive in very low interest rate environments due to the limiting effect on discounted future cash flows, or expected earnings. That scenario is dissolving by the day in America as growth stocks and their techy gurus are knee deep in dog doo right now within an inflation scenario that is not going away.

Again, not going away anytime soon as we’re seeing an absence of “demand destruction”. As long as consumer demand remains pretty steady why would an employer necessarily reduce their workforce? So we have this conundrum, how to fight inflation while 12 million active job openings exist across the U.S.? Not going to happen, [something] is not lining up. The Federal Reserve is praying that corporations face demand destruction and massive layoffs across the country can somehow, suddenly create this huge vacuum in consumer spending. Stay with me here, how is that going to happen when the idiot Democrats keep pumping stimulus programs down the mouths of untrained [in economics] citizens? Highly doubtful this goes away anytime soon… best to stay with that ugly Christmas sweater for one more year. I’ll let you know when you can buy a new one, maybe next year[?].

So where are we and what’s next? Well, we’re stuck in the mud here, mired in Washington policy error after policy error which means only one thing – inflation is something we’ll need to live with for the foreseeable future. A scenario that could last for multiple years, but can the stock market survive? Yes, if you mean is there still going to be a Wall St. or will it be torn down for Disney’s latest Transgender Woke Theme Park? Wall St. will stay intact as is, however, some personnel will no doubt be absent over this course. What shouldn’t be expected to stay as is is what financial instruments will be attractive to own going forward. In a world where we finally have institutions paying for deposits and short-term bonds actually paying an attractive rate of interest. I’d say follow the money in the form of cash distributions where ever that may lead you; getting paid for your capital becomes a priority when inflation is eroding your wallet. Growth stocks typically do not pay you to wait in this environment, hence the bleak discounted future cash flow scenario. The NASDAQ Composite is still down around 30% year-to-date. I hope I answered as to why that is. What I have trouble wrapping my head around is how stupid these tech oligarchs were to install Woke Democrats creating their own demise, and self-destructing if you will as they see their fortunes dissolve [in many cases]. I’ll be laughing out loud at their stupidity forever! 🙂