From the Desk of Joe Rollins
I guess you could classify me as one of those forecasters above. I am not sure whether it is the former or the latter, but in either case, the end result is the same. There is an old saying that the reason economists have jobs is because they tend to make weather forecasters look good. In fact, neither one of them are fully accurate in their projections. Certainly, no one knows what the next four years will bring under the new presidency, but I have some thoughts I would like to pass along.
One of the major concerns regarding the U.S. nowadays is its Federal deficit. Currently, the national debt exceeds $31 trillion and has grown exponentially over the last few years. I get the sense from many people that they do not believe this number is controllable and that we could ever work our way out of this mess. There is a way it can be done, and certainly I do not think the debt is unmanageable. I hope to explain this further in this posting.
I recently traveled to New York City, namely, to see new Broadway plays. My daughter and I have a long-term affection for Broadway musicals. We try to go to New York each year and catch whatever is new. My love of Broadway goes back to my childhood, which I would also like to discuss.
There has been a lot written about fracking in the current election. I would like to try and explain why fracking is so important and so valuable to the U.S. Those who want to eliminate fracking clearly do not understand the interaction between our ability to frack in this country and our 100% self-reliance on produced energy in the United States. Hopefully, I can illustrate how the elimination of fracking would be an economic disaster in the United States.
With all the major market indexes hitting all-time highs in November, I received many calls regarding stock prices. I would be the first to tell you that stock prices are priced to perfection, but that does not mean they will not go higher. There is a great deal that you need to understand about future stock pricing and exactly why new highs are not necessarily bad.
The most important thing I want to emphasize in this posting is what we have learned over the last few years. If you study economics long enough, you realize that every year is a learning process. They may teach you long-term trends that have happened in the past, but none of that will mean anything if economic circumstances change. I have learned a lot over the last four years that has led to us having great financial results for our clients. But I have also learned that mainstream economists are more often wrong than they are correct. I find that if you follow these so-called experts on Wall Street, you almost assuredly have to evaluate their advice with a “grain of salt.” I think I can illustrate that in this posting.
Before covering all those terribly interesting ideas, I need to report the performance for the month of October. I think it can clearly be said that October was a nothingburger. Virtually nothing was going on, and that is fully reasonable given the circumstances. Given that the election was on November 5th, right after the end of the month, you would expect the markets to be cautious. In addition, the Federal Reserve was due to meet on November 6th, so you had a double whammy that would affect the news that could affect the market dramatically. It appears that for the month of October, virtually everyone was sitting on their hands, waiting for the news to occur. However, we cannot ignore those results and need to report on them.
For the month of October, the Standard and Poor’s Index of 500 Stocks lost 0.9% and is up 21% for the year through October. As I would like to point out, the 10-year return for this Index is 13% per year. The NASDAQ Composite was down 0.5% for the month of October and is up 21.3% for the year-to-date through the end of October. The 10-year return for this Index is 15.7% annually. The Dow Jones Industrial Average was down 1.3% during the month of October and is up 12.5% for the year through October. The 10-year return on this Index is 11.7%.
For the month of October, the Bond Index was very volatile with the anticipation that the Federal Reserve might increase interest rates rather than cut them. As we now know, that did not happen, but that did not keep the bond index from reacting to those rumors. For the month of October, the Bloomberg Barclays Aggregate Bond Index was down 2.5%. For the year-to-date, that Index is up 1.9%, and the 10-year average of this Index was 1.5% annually. As I have pointed out endlessly in these postings, the major market indexes have had double-digit returns for the last 10 years. However, the Bond Index has had a dismal 1.5% annual rate over the last decade.
When I was very young, my father was required to attend a conference in Boston for one of the civic organizations for which he was President. You can imagine the excitement of packing up the family and driving from Tennessee all the way to Boston. Since it was winter and close to the Christmas season, we took the opportunity to stop in New York City to see the sights. My father had friends there who had bought Broadway tickets for us to see Mary Martin in the play South Pacific. I am not sure what the date was, sometime in the early 1950’s, but I was sold. I became a fan of Broadway musicals from that day forward and have seen or attended Broadway musicals around the world.
We recently went to New York City to catch some new plays and see what was interesting. We could see five Broadway plays in three days by attending the matinees. Not only do I have a great interest in Broadway musicals, but my daughter enjoys the music and collects all the posters and cast recordings of those plays. However, one of the things that I have noticed by going to New York City on a regular basis is the deterioration of the city itself. Due to so many employees not going to their offices for work, the lunch business has almost evaporated in Manhattan.
The city seems dirtier than ever, and what has happened to Times Square is embarrassing. It is true that every night, Times Square receives thousands upon thousands of tourists, but the influx of people begging and seeking money for pictures is embarrassing. You cannot help but think the city would do more to clean itself up, but unfortunately, they are not interested in improvement. New York City is currently the center of great Broadway musicals. No other city rivals it, and we will continue to visit it as long as possible. It is just unfortunate that the city seems to be trending in a downward direction when it has so much greatness to offer.
I am often approached about what the U.S. could do about the huge deficit that the Federal government runs up every year. This year, it looks like the deficit will be somewhere around $1.8 trillion. The current debt now exceeds the GDP by roughly 15%. That certainly is a negative trend after 100 years of the national debt being less than the GDP. However, I am not as pessimistic as many when it comes to solving the deficit issue. One of the things that we have learned over the last four years is that the expansion of Federal and state government employees is no substitute for workers in the private sector. The government does not create innovation or expand the technology dominance in the United States. What it does is burden the U.S. citizens with extra taxes, and the inefficiencies of the government are legendary.
But I wonder if you realize how fast the government has grown during the last administration. From December 2020 to March 2024, which were all dominated by the current administration, the Environmental Protection Agency has grown by 9.4%. The agriculture department has grown by 9.6%, and the Department of Housing and Urban Development has grown up by 10.7%. I am not sure what exactly these agencies do, but I can assure you they probably just write rules and regulations that make our lives more complex. But these are not the only agencies that grew, as the Energy Department grew 14.8%, the State Department grew 18.4%, and the Health and Human Services grew 18.4%. It is hard for me to even venture a guess as to exactly what these agencies do and why the need to grow these agencies at such an alarming rate was required. Meanwhile, employment was down by 1.2% for the Department of Defense. As you can tell, employment throughout most of the government was up double digits but our security was down.
There was great outrage when Elon Musk indicated that he would cut $2 trillion out of the Federal budget. Obviously, that would be virtually impossible, given that it would require cuts in Medicare and Social Security. However, as you can see from the growth of the government, there is room for the U.S. government to severely cut back employment. If you did nothing more than require Federal employees to come to the office five days a week, you would probably eliminate a good many. This issue could be resolved simply by freezing employment in the government. If you let natural retirements take place and do not replace those jobs, you would materially reduce the number of people on the Federal payroll over a four-year period. I think realistically if the new administration could cut Federal employees back to the level during 2020, that would make a major improvement on the cost of government. I understand that cutting 10% of the Federal workforce would save close to $4 billion a year, which should be meaningful to all who really care.
The one way that the Federal budget can be solved and balanced in the future is not only by cutting expenses but by increasing economic growth. Everyone I have talked to discusses the fact that all the major market indexes are at all-time highs and that, assuredly, we are due a pullback. With the market trading at roughly 22 times forward earnings, that would certainly seem to be above the long-term trend at 19 times. However, if you consider that earnings are expected to grow 15% in 2025 and 13% in 2026, the current evaluation does not seem to be as onerous. But I have higher expectations.
If you are not excited about the policies of the new administration, you just do not realize the benefits that the U.S. economy could have from a less administrative burden, lower taxes and a growth-oriented Federal government. I cannot speak to the social aspect or the faults of the current President, but I can tell you that with a smaller government and less administrative burden, the economy could expand even further than where it sits today. This is not just a promise, it is exactly what happened during his first term. Non-economists just do not understand the benefits of a lower corporate tax rate. Even though corporations are demonized during the election, corporations are the employers that keep the U.S. growing.
If you increase the corporate tax rate, foreign companies are not likely to want to move to the United States to employ our people. If you lower the tax rate below the rate of other countries, companies from around the world will seek opportunities in the U.S. to employ people. If you combine that with the less administrative burden and reduce the meddling that the Federal government has in private businesses, almost assuredly the GDP is going to pick up. I am optimistic that we are going to see an expanding U.S. economy which will produce higher profits, which in the end will create more tax dollars to fund the deficit.
It is a combination of lower spending and higher growth that will bring the deficit under control. For those that fear the national debt, that is misplaced. We are a country that can print money and as long as we can do so, debt is not a problem. However, currently the interest to carry the debt is now greater than the entire budget for the Defense Department. This continuing growth of debt and higher interest rates will be devastating to the economy in a decade or two. Now is the time to attack spending by the Federal government, reduce taxes which will increase earnings and employ more people in the private sector, which hopefully will raise more tax dollars to pay down the deficit. There is no question in my mind that this is the right move at the current time.
Many people were surprised at the election and its current winners. I luckily projected the winner because I read extensively on the consumer and the effect that wages have on consumer purchases or nonpurchases. There is one fact that defines the entire election. For the period from January 2017 through December 2020, the level of prices and wages grew nearly 7% during that time frame. That was the time frame of the first Trump presidency. During the Biden administration, average level of prices and wages went down 0.5% and during the height of the inflation, was downed as much as 3.8%. What you saw during the last four years was a decline in the ability of the average person to purchase groceries and, after inflation, saw their wages actually fall.
There were many foolish proposals during the election that were not attainable. Trump wanted to exclude tips from being taxable income. All I could think about was that we would quit charging clients for our services and request tips instead. A democratic candidate proposed reducing grocery costs by eliminating price gouging. Another absurd proposal that was not attainable. Anyway, many promises were made, but I doubt very seriously whether many of them will be sustainable.
What we have learned over the last four years is extremely important. You may recall that at the beginning of 2021 the new administration passed a $1.9 trillion special Bill to pass out money to the American public and a lot of political cronies. Much of this money was used to bail out inept pension funds that could not make money investing. A great deal of the money went back to cities that were inept at running their operations and suffered during Covid. The remainder of the money was given to the public, which we now know in many cases went in the hands of foreigners, scam organizers and people that just cheated the system. What we know implicitly about this incredible mistake by the Federal government, it created its extraordinarily high inflation that took years to tank.
Realizing that this entire $1.9 trillion was manufactured money and an increased deficit, when you pour that much money into the economy over a short period of time, you are going to create shortfalls. All of us knew and heard about the supply chain shortages during late 2021 and 2022. What we did not realize was that it was not a supply shortage, but a demand acceleration created by these excess funds. What we learned emphatically is that governmental money funneled in the economy likely does more damage than it does good. The net effect of this change was extraordinarily high inflation that reached a 9% level in 2022. The Federal Reserve at the beginning indicated that the inflation was transitory and would not last. They were clearly wrong. What we learned is you cannot dump this amount of money into an economy, which at the time did not really need it, and not expect it to have adverse effects when it comes to increased inflation.
At the beginning of 2022, all the so-called experts on Wall Street indicated that due to the increase in interest rates by the Federal Reserve we clearly would have recession in 2022 and 2023. They indicated that with the inverse yield curve they had the strongest argument ever of upcoming recession. I argued in these postings that they were incorrect. The economy was weak, yet it was positive and there was certainly no indication it was going to flip over and be negative. However, the so-called experts convinced the public and the market went down dramatically in 2022, even though no recession ever appeared. I was right and they were wrong, but the markets did not believe me. Yes, 2022 was a difficult year for us all given the incorrect advice we received from Wall Street at the price action of stocks, which was nothing but negative.
In 2023 and now in 2024 the markets have been up substantially. It is likely that there will be a 40% gain after those two years if we end the year where we are today. When you consider that the market was down 20% in 2022 but maybe up 40% in the two intervening years, it tells you that the economy never actually contracted. I do not anticipate the economy contracting for the next several years, but you just never know.
Elon Musk made news recently when he indicated that there would be hard times coming. If in fact he follows through with his proposal to significantly reduce the size of government that means millions of Federal employees will be looking for jobs. Fortunately, these people are educated and are likely to quickly fill positions in the private sector. I do not think that will create economic disaster. I recently read an article that indicated that if the government removed undocumented migrants from the U.S., it would create a falling of $70-$80 billion in tax payments and as low as $30 billion payable to Social Security. Right now, tax revenues to the Treasury are close to $5 trillion. While these amounts are large and absolute numbers, as a percentage to the tax revenues of the Federal government, it hardly rates as a rounding error. The removal of undocumented immigrants, while maybe personally revolting, is lawfully required. Those that are in this country illegally need to be excluded and let them apply for legal entry, as with all non-U.S. citizens seeking residency in the United States.
The liberal media is now falling all over themselves, trying to explain the loss in the election and what everyone did wrong. The polls projecting a 50-50 election were not even close. The election swung to the former President winning all seven of the battleground states without much opposition. There is a mandate from the American population for a new President and a new financial model. Hopefully, it means less government, less administration and the ability of American entrepreneurship to grow corporate America, legally employ people from around the world, and to innovate and create future wealth for all U.S. citizens. I will look back a few years from now on this posting and give you an update as to where we are going with those political realities.
What we also learned is that inflation impacts so much of our life that we do not even realize. Even though we had the $1.9 trillion windfall from the government, the inflation that it created was devastating to the economy. To slow down the rate of inflation, the Federal Reserve had to dramatically increase interest rates. This increase in interest rates reduced the number of homes built and also placed havoc on the real estate market. Now we have a shortage of new homes because so many potential buyers can no longer afford the payments of the higher interest rates. It all goes back to the major mistake of assuming by the government that you could create economic expansion and wealth by giving governmental money to the average person. The fallacy in that argument was that it was not money created from the growth of the economy, but rather borrowed.
At some point that borrowed money must be repaid, and the cost of repaying it would be a reduction of the economy since you would be taking money out of the economy with higher taxes in order to pay off prior debt. My anticipation is that if you could grow the economy you could catch up with the deficits.
If you think that is a pipe dream, go back and review what happened under Bill Clinton's Presidency. Even though the country was in a deficit situation at the end of the Iraq conquest at the beginning of the 1990’s, over the short life of Bill Clinton's presidency, the Federal budget turned positive. It was not so much what the government did, but during that time frame the economy grew, and when the economy grew it created more taxes for the government. At one point in the Clinton administration, there was real concern in where the money would be spent if it created surpluses in the budget forever.
The U.S. now is energy independent and that is positive. Things are about to get better under an administration that is anti-fossil fuels. For reasons nobody totally understands, the current President stopped exporting liquefied natural gas out of the Gulf coast. The sad part about that is parts of Asia and Europe depend on exports of this gas to keep them going during the wintertime. I fully expect a lifting of that Presidential order in the first week of the new presidency.
Also, there was much conversation during the election about not eliminating fracking. It is hard to conceive that educated people are even discussing this matter. It is now estimated by S&P Global that more than 70% of its oil and more than 80% of its natural gas in the United States is produced through fracking. If you eliminated fracking from this process, that would mean that we would have to import virtually all the oil and natural gases that we use in this country. What has been proven over the last couple of decades is that alternative energy sources are neither adequate nor dependable. We have found that wind cannot meet the demands of utilities for alternative fuels, and the only reliable one is solar, and it is just in infancy. It would not surprise me to see that all wind would be eliminated over the next decade, given its unreliability and cost to maintain being in excess of the revenue generated.
But the one thing that a lot of people were missing in this argument was the political effect importing oil to the United States would have in the world arena. Russia was completely wrong about what the effect of cutting off the oil supply to Europe would be. Russia thought that Europe would fall into line when all its natural resources would cut off, and they would have to come hand in hat back to Russia to buy the energy to keep them going. Fortunately, Norway and the United States jumped in to supply liquefied natural gas to Europe and subsequently to Asia to beat that demand. If we were unable to provide for our own natural resources, would we again have to depend upon Saudi Arabia and the terrorist countries of Russia and Iran. The fact is that we are energy independent due to fracking, and to have a discussion of eliminating that ability is irresponsible for anyone who knows the facts.
Even though all the major markets are at an all-time high, I expect that the market will continue to rise, but it will be volatile. The fundamentals are in place for a continuing increase, but a pullback is always possible. The one fact that you can depend on is we watch it closely and will anticipate movement if economic circumstances should change. If you have concerns or would like to discuss it in greater detail, please schedule a meeting or give us a call.
As always, the foregoing includes my opinions, assumptions, and forecasts. It is perfectly possible that I am wrong.
Best Regards,
Joe Rollins
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| "The magic of pasta lies in its ability to bring people together around the table." |
One of the major concerns regarding the U.S. nowadays is its Federal deficit. Currently, the national debt exceeds $31 trillion and has grown exponentially over the last few years. I get the sense from many people that they do not believe this number is controllable and that we could ever work our way out of this mess. There is a way it can be done, and certainly I do not think the debt is unmanageable. I hope to explain this further in this posting.
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| Rachel Keller’s adorable “Millie” Mouse. “Remember, you’re the one who can fill the world with sunshine.” |
There has been a lot written about fracking in the current election. I would like to try and explain why fracking is so important and so valuable to the U.S. Those who want to eliminate fracking clearly do not understand the interaction between our ability to frack in this country and our 100% self-reliance on produced energy in the United States. Hopefully, I can illustrate how the elimination of fracking would be an economic disaster in the United States.
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| Game face on ✓ Let’s go, Ava! |
The most important thing I want to emphasize in this posting is what we have learned over the last few years. If you study economics long enough, you realize that every year is a learning process. They may teach you long-term trends that have happened in the past, but none of that will mean anything if economic circumstances change. I have learned a lot over the last four years that has led to us having great financial results for our clients. But I have also learned that mainstream economists are more often wrong than they are correct. I find that if you follow these so-called experts on Wall Street, you almost assuredly have to evaluate their advice with a “grain of salt.” I think I can illustrate that in this posting.
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| Evan and Alexis looking stunning at a friend’s wedding in Huntsville |
For the month of October, the Standard and Poor’s Index of 500 Stocks lost 0.9% and is up 21% for the year through October. As I would like to point out, the 10-year return for this Index is 13% per year. The NASDAQ Composite was down 0.5% for the month of October and is up 21.3% for the year-to-date through the end of October. The 10-year return for this Index is 15.7% annually. The Dow Jones Industrial Average was down 1.3% during the month of October and is up 12.5% for the year through October. The 10-year return on this Index is 11.7%.
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| Marti and Mitch celebrating Homecoming at LaGrange College. These twins are “two”rrific! |
When I was very young, my father was required to attend a conference in Boston for one of the civic organizations for which he was President. You can imagine the excitement of packing up the family and driving from Tennessee all the way to Boston. Since it was winter and close to the Christmas season, we took the opportunity to stop in New York City to see the sights. My father had friends there who had bought Broadway tickets for us to see Mary Martin in the play South Pacific. I am not sure what the date was, sometime in the early 1950’s, but I was sold. I became a fan of Broadway musicals from that day forward and have seen or attended Broadway musicals around the world.
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| The cutest orange M&M and Harry Potter to hit the streets on Halloween! |
The city seems dirtier than ever, and what has happened to Times Square is embarrassing. It is true that every night, Times Square receives thousands upon thousands of tourists, but the influx of people begging and seeking money for pictures is embarrassing. You cannot help but think the city would do more to clean itself up, but unfortunately, they are not interested in improvement. New York City is currently the center of great Broadway musicals. No other city rivals it, and we will continue to visit it as long as possible. It is just unfortunate that the city seems to be trending in a downward direction when it has so much greatness to offer.
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| This will be the last time Kasten asks Josh to pick up spare ribs on the way home |
But I wonder if you realize how fast the government has grown during the last administration. From December 2020 to March 2024, which were all dominated by the current administration, the Environmental Protection Agency has grown by 9.4%. The agriculture department has grown by 9.6%, and the Department of Housing and Urban Development has grown up by 10.7%. I am not sure what exactly these agencies do, but I can assure you they probably just write rules and regulations that make our lives more complex. But these are not the only agencies that grew, as the Energy Department grew 14.8%, the State Department grew 18.4%, and the Health and Human Services grew 18.4%. It is hard for me to even venture a guess as to exactly what these agencies do and why the need to grow these agencies at such an alarming rate was required. Meanwhile, employment was down by 1.2% for the Department of Defense. As you can tell, employment throughout most of the government was up double digits but our security was down.
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| Reid and Caroline hanging out with the Hulk at the Baha Mar Casino in Nassau |
The one way that the Federal budget can be solved and balanced in the future is not only by cutting expenses but by increasing economic growth. Everyone I have talked to discusses the fact that all the major market indexes are at all-time highs and that, assuredly, we are due a pullback. With the market trading at roughly 22 times forward earnings, that would certainly seem to be above the long-term trend at 19 times. However, if you consider that earnings are expected to grow 15% in 2025 and 13% in 2026, the current evaluation does not seem to be as onerous. But I have higher expectations.
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| Whole Lotta Love! Michael and Aunt Mia in their matching tees. Happy Birthday, Michael! |
If you increase the corporate tax rate, foreign companies are not likely to want to move to the United States to employ our people. If you lower the tax rate below the rate of other countries, companies from around the world will seek opportunities in the U.S. to employ people. If you combine that with the less administrative burden and reduce the meddling that the Federal government has in private businesses, almost assuredly the GDP is going to pick up. I am optimistic that we are going to see an expanding U.S. economy which will produce higher profits, which in the end will create more tax dollars to fund the deficit.
It is a combination of lower spending and higher growth that will bring the deficit under control. For those that fear the national debt, that is misplaced. We are a country that can print money and as long as we can do so, debt is not a problem. However, currently the interest to carry the debt is now greater than the entire budget for the Defense Department. This continuing growth of debt and higher interest rates will be devastating to the economy in a decade or two. Now is the time to attack spending by the Federal government, reduce taxes which will increase earnings and employ more people in the private sector, which hopefully will raise more tax dollars to pay down the deficit. There is no question in my mind that this is the right move at the current time.
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| Throwback from the 80s when Joe used to take the staff to Mexico. Alas… |
There were many foolish proposals during the election that were not attainable. Trump wanted to exclude tips from being taxable income. All I could think about was that we would quit charging clients for our services and request tips instead. A democratic candidate proposed reducing grocery costs by eliminating price gouging. Another absurd proposal that was not attainable. Anyway, many promises were made, but I doubt very seriously whether many of them will be sustainable.
What we have learned over the last four years is extremely important. You may recall that at the beginning of 2021 the new administration passed a $1.9 trillion special Bill to pass out money to the American public and a lot of political cronies. Much of this money was used to bail out inept pension funds that could not make money investing. A great deal of the money went back to cities that were inept at running their operations and suffered during Covid. The remainder of the money was given to the public, which we now know in many cases went in the hands of foreigners, scam organizers and people that just cheated the system. What we know implicitly about this incredible mistake by the Federal government, it created its extraordinarily high inflation that took years to tank.
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| Bill Bewley immersing himself in Italy’s culinary traditions with a pasta making class |
At the beginning of 2022, all the so-called experts on Wall Street indicated that due to the increase in interest rates by the Federal Reserve we clearly would have recession in 2022 and 2023. They indicated that with the inverse yield curve they had the strongest argument ever of upcoming recession. I argued in these postings that they were incorrect. The economy was weak, yet it was positive and there was certainly no indication it was going to flip over and be negative. However, the so-called experts convinced the public and the market went down dramatically in 2022, even though no recession ever appeared. I was right and they were wrong, but the markets did not believe me. Yes, 2022 was a difficult year for us all given the incorrect advice we received from Wall Street at the price action of stocks, which was nothing but negative.
In 2023 and now in 2024 the markets have been up substantially. It is likely that there will be a 40% gain after those two years if we end the year where we are today. When you consider that the market was down 20% in 2022 but maybe up 40% in the two intervening years, it tells you that the economy never actually contracted. I do not anticipate the economy contracting for the next several years, but you just never know.
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| “A lioness does not need to roar to keep the crowd in awe.” - South Africa 2023 |
The liberal media is now falling all over themselves, trying to explain the loss in the election and what everyone did wrong. The polls projecting a 50-50 election were not even close. The election swung to the former President winning all seven of the battleground states without much opposition. There is a mandate from the American population for a new President and a new financial model. Hopefully, it means less government, less administration and the ability of American entrepreneurship to grow corporate America, legally employ people from around the world, and to innovate and create future wealth for all U.S. citizens. I will look back a few years from now on this posting and give you an update as to where we are going with those political realities.
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| Food tastes better when you eat it with family (or even just in Italy, period). Ava, Savvy, Dakota, Josh and Carter |
At some point that borrowed money must be repaid, and the cost of repaying it would be a reduction of the economy since you would be taking money out of the economy with higher taxes in order to pay off prior debt. My anticipation is that if you could grow the economy you could catch up with the deficits.
If you think that is a pipe dream, go back and review what happened under Bill Clinton's Presidency. Even though the country was in a deficit situation at the end of the Iraq conquest at the beginning of the 1990’s, over the short life of Bill Clinton's presidency, the Federal budget turned positive. It was not so much what the government did, but during that time frame the economy grew, and when the economy grew it created more taxes for the government. At one point in the Clinton administration, there was real concern in where the money would be spent if it created surpluses in the budget forever.
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| Cherish your yesterdays, dream your tomorrows and live your todays! Randy and Kathy Wittman |
Also, there was much conversation during the election about not eliminating fracking. It is hard to conceive that educated people are even discussing this matter. It is now estimated by S&P Global that more than 70% of its oil and more than 80% of its natural gas in the United States is produced through fracking. If you eliminated fracking from this process, that would mean that we would have to import virtually all the oil and natural gases that we use in this country. What has been proven over the last couple of decades is that alternative energy sources are neither adequate nor dependable. We have found that wind cannot meet the demands of utilities for alternative fuels, and the only reliable one is solar, and it is just in infancy. It would not surprise me to see that all wind would be eliminated over the next decade, given its unreliability and cost to maintain being in excess of the revenue generated.
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| Our cute, no longer so little Ava catching a Falcons game with big brother, Josh. |
Even though all the major markets are at an all-time high, I expect that the market will continue to rise, but it will be volatile. The fundamentals are in place for a continuing increase, but a pullback is always possible. The one fact that you can depend on is we watch it closely and will anticipate movement if economic circumstances should change. If you have concerns or would like to discuss it in greater detail, please schedule a meeting or give us a call.
As always, the foregoing includes my opinions, assumptions, and forecasts. It is perfectly possible that I am wrong.
Best Regards,
Joe Rollins
All investments carry a risk of loss, including the possible loss of principal. There is no assurance that any investment will be profitable.
This commentary contains forward-looking statements, which are provided to allow clients and potential clients the opportunity to understand our beliefs and opinions in respect of the future. These statements are not guarantees, and undue reliance should not be placed on them. Forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual results in future periods to differ materially from our expectations. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
